Biden Raises Phase 1 Commitments with Xi in Virtual Talks

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Pelosi tells Dems they will not depart for Thanksgiving until vote on BBB
 


In Today’s Digital Newspaper


Market Focus:
• Retail sales rose by 1.7% in October, marking solid start to holiday shopping season
• USDA daily export sales:

  — 270,000 MT corn to Mexico during 2021-2022 marketing year
  — 161,000 MT soybeans to unknown destinations during 2021-2022 MY
• China starting to buy U.S. grain sorghum
Announcement about Biden’s pick to chair Federal Reserve could be ‘imminent’
• Business execs: It’s not us, it’s the supply chain
• Farmland values surge alongside strength in agriculture 

• International Energy Agency: end n sight for crude oil’s rally
• Avg. price of gasoline in California hit record $4.682 per gallon Monday
• Indian oil minister discusses impacts of high oil prices
• Gold prices have surged near their highest level in five months
• Bitcoin tumbled up to 10% overnight to below $60,000
• Ag demand update

• Weaker tone for corn, soybeans and wheat overnight
• Consultant maintains South American crop estimates
• SovEcon raises Ukraine’s 2021 corn crop estimate, sees much smaller 2022 wheat crop
• CCI ratings improve for HRW, SRW crops
• A lot of cattle changed hands again last week
• Pork cutout unable to hold Monday morning’s gains 

Policy Focus:
• CBO to release complete cost estimate for BBB by end of Friday
• CBO releases more BBB estimates, including agriculture spending
• White House cautions CBO’s analysis won’t necessarily show BBB fully paid for
• CBO director: IRS proposal yields far less than what White House counting on
• Pelosi: House isn’t leaving for next week’s Thanksgiving recess without passing BBB
• Biden signed BIF into law on Monday afternoon
• Vilsack member of BIF task force to help implement law and avoid waste
• CFAP 2 payments now at $18.8 billion 

Afghanistan:
• Taliban military parade used dozens of captured American-made armored vehicles

Biden Administration Personnel:
• RMA leader named 

China Update:
• Biden and Xi Jinping pledged to avoid conflict, improve co-operation
• Biden, Xi discussed human rights, Taiwan and trade
• Biden talked about Phase 1 commitments in virtual summit with Xi
• No significant breakthroughs in virtual summit
• Communist Party published document that sets up Xi to potentially rule for life 

Trade Policy:
• Mexico and Canada take aim at Biden’s electric vehicle plans
• U.S. ag attaché: Brazil trim to import tariffs could become permanent if Mercosur adopts

Energy & Climate Change:
• Schumer lobbies for SPR release
• Bloomberg: Adjusting RFS could be administration’s quickest tool to lower gas prices


Livestock, Food & Beverage Industry Update:
• Tyson Foods reports jump in sales after sharply raising prices for its beef, chicken & pork
• Rabbis debate plant-based ‘pork’


Coronavirus Update:
• Pfizer agreement to allow broader global access to experimental Covid-19 antiviral pill

Politics & Elections:
• Election Day 2022: 357 days away. Election Day 2024: 1,085 days away
• Beto O’Rourke, a Democrat, is challenging GOP Texas Gov. Greg Abbott
• Vermont Sen. Patrick Leahy, a Democrat, said he won’t run for a ninth term
• Will Sens. Johnson, Thune seek re-election?
• Dem Jackie Speier will not run for re- election to Congress in 2022.
• Rep. Cindy Axne running for re-election, and passing on run for governor
• Wyoming Republican Party will no longer recognize Rep. Liz Cheney

Congress:
• Today’s schedule
• Lawmakers held discussions about short-term gov’t funding through Dec. 17


Other Items of Note:
• NATO warned Russia that it would stand by Ukraine


MARKET FOCUS


Equities today: Global stock markets mostly firmer in overnight trading. The U.S. Dow opened up around 70 points higher and then went up around 150 points, but the Nasdaq opened slightly lower. This morning, Walmart and Home Depot beat expectations for profit and revenue in their latest quarters. Asian equities were mixed as US and Chinese leaders held discussions. Japan’s Nikkei was up 31.32 points, 0.11%, at 29,808.12. Hong Kong’s Hang Seng Index gained 322.87 points, 1.27%, at 25,713.78. However, other markets in the region were lower. European equities are mostly higher in early action with a focus on earnings. The Stoxx 600 was up 0.3% while other markets posted gains of 0.1% to 0.4%. Spanish and Italian shares, however, were narrowly lower.

     U.S. equities yesterday: The Dow ended down 12.86 points, 0.04%, at 36,987.45. The Nasdaq fell 7.11 points, 0.04%, at 15,853.85. The S&P 500 eased 0.05 point, 0.00%, at 4,682.80. Tyson rose about 3.5% Monday after posting a jump in sales for the latest quarter (see related item below), during which it sharply raised prices for its beef, chicken and pork. Oatly’s American depositary receipts fell nearly 21% after the Swedish oat-milk maker warned that production challenges might hold growth below projections. Oatly plans to raise prices in the U.S. and Europe to keep up with costs.

     Stocks

On tap today (see detailed list of events and reports below):

     •  U.S. retail sales for October are expected to rise 1.5% from the prior month. (8:30 a.m. ET) UPDATE: Sales at U.S. retail stores, online sellers, and restaurants rose by a seasonally adjusted 1.7% in October vs the previous month, the Commerce Department said. Consumers continue their stepped-up spending despite continued Covid-19 fears and inflation concerns. Spending rose sharply, by 4%, at online retailers, along with big gains at electronics, appliance and hardware stores. Grocery-store sales rose by 1.1% while restaurant and bar sales were flat. Other gains occurred at gas stations, where sales rose 3.9%, and auto dealerships, with a 1.8% gain.
     • U.S. import prices for October are expected to increase 1% from the prior month. (8:30 a.m. ET)
     • U.S. industrial production for October is expected to increase 0.8% from the prior month. (9:15 a.m. ET)
     • U.S. business inventories for September are expected to grow 0.6% from the prior month. (10 a.m. ET)
     • National Association of Home Builders housing market index is expected to hold at 80 in November, unchanged from one month earlier. (10 a.m. ET)
     • European Central Bank President Christine Lagarde gives an on-stage interview at 11:10 a.m. ET.
     • Federal Reserve: Atlanta’s Raphael Bostic, Kansas City’s Esther George, Minneapolis’s Neel Kashkari and Richmond’s Thomas Barkin on racism and the economy at 12 p.m. ET (livestream); San Francisco's Mary Daly on monetary policy at 12:30 p.m. ET; and Philadelphia’s Patrick Harker at a fintech conference at 2:55 p.m. ET.

An announcement about Biden’s pick to chair the Federal Reserve could be “imminent,” Senate Banking Chairman Sherrod Brown (D-Ohio) said. “I hear it’s imminent,” Brown said yesterday at the Capitol. “I’m not going to speculate who I think it might be now. I assume the decision’s been made and they haven’t announced it, but I don’t even know that,” he said. Other senators and Senate Banking Committee staff were alerted an announcement was coming soon, a congressional official said.

It’s not us, it’s the supply chain. It costs more and takes longer to move goods around the world these days. Not coincidentally, executives have discussed — or, in many cases, complained about — supply chain issues on earnings calls far more frequently than in the past. A New York Times search of transcripts for mentions of “supply chain,” using the Sentieo data service, shows a clear trend:

     Supply chain

Farmland values surge alongside strength in agriculture. The value of all types of farmland was about 15% higher across a major region of U.S. farm country compared to a year ago, according to the Federal Reserve Bank of Kansas City, which oversees Colorado, Kansas, Nebraska, Oklahoma, Wyoming and portions of Missouri and New Mexico. Link for details.

Market perspectives:

     • Outside markets: The U.S. dollar index is firmer ahead of U.S. economic updates, with the euro weaker against the greenback. The yield on the 10-year U.S. Treasury note was firmer, trading around 1.61%, with a mixed tone to global government bond yields. Gold and silver futures were posting gains ahead of a batch of U.S. economic data, with gold around $1,872 per troy ounce and silver around $25.28 per troy ounce.

     • Crude prices are higher ahead of U.S. trading, with U.S. crude trading around $81.40 per barrel and Brent around $82.75 per barrel. Futures were also higher in Asian trading, with U.S. crude up 53 cents at $81.41 pe barrel while Brent crude was up 64 cents at $82.69 per barrel.

     • This morning’s monthly report from the International Energy Agency (IEA) said the end is in sight for the crude oil’s rally, even as some oil traders and producers predict $100 oil. West Texas Intermediate for December delivery is trading just above $81 this morning. Demand growth remains robust, but supply is catching up and changes in oil stockpiles seen in October suggest “the tide might be turning,” according to the IEA’s monthly report. “The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon,” the Paris-based IEA said. “Production in the U.S. is ramping up in tandem with stronger oil prices.”

        Oil production

     • Average price of gasoline in California hit a record $4.682 per gallon Monday, according to the American Automobile Assn. It was the state’s second record-breaking day in a row. Experts are not sure how high pump prices will go. At nearly $60 to fill a 12-gallon tank, some may reconsider their Thanksgiving plans, but most will likely stay the course, said a AAA Southern California spokesman.

     • Indian oil minister discusses impacts of high oil prices. High oil prices and ongoing volatility in energy markets could impact the energy transition, Indian Oil Minister Hardeep Singh Puri told Reuters Monday. As the OPEC+ countries consider whether to boost oil production faster, Puri said he hopes they will avoid a situation “in which the transition is not orderly, stable, and predictable.” Energy affordability is key he stressed. “If energy is not affordable, you're going to have a problem.” While OPEC has the capacity to boost production, he warned that allowing prices to creep to high “for short term gain” could “unleash other forces.” Puri pointed to surging U.S. inflation and adding that if energy prices rise beyond a certain point demand will eventually fall.

     • Gold prices have surged near their highest level in five months, on signs inflation will slow the economy and undercut the stock market’s steady run up. Most-actively traded gold futures inched down 0.1% Monday to $1,866.60 a troy ounce but stayed just below their highest point since mid-June.

        Gold prices

     • Bitcoin tumbled as much as 10% overnight to below $60,000 amid broad losses in the crypto sector. The global crypto market cap fell 7% in the past 24 hours to $2.8 trillion, according to tracker CoinGecko. The retreat comes a week after Bitcoin notched a fresh record high of $68,990.90 on Nov. 10, which also helped other cryptos, like Ether, reach all-time highs.

     • USDA daily export sales:

       — 270,000 MT corn to Mexico during 2021-2022 marketing year

       — 161,000 MT soybeans to unknown destinations during 2021-2022 MY

     • China starting to buy U.S. grain sorghum, possibly 6 unit trains, says one industry analyst.

     • Ag demand: South Korea purchased 68,000 MT of corn — likely to be sourced from South America or South Africa — but passed on a tender to buy 65,000 MT of feed wheat. Japan is seeking 121,805 MT of U.S. and Canadian milling wheat in its regular weekly tender. 

     • NWS weather: A deep low pressure system is bringing potentially damaging winds across the northern Rockies/High Plains today... ...Lake-effect snow/rain downstream of the lower Great Lakes tapers off by tonight before a warm front spreads rain into the area by late Wednesday... ...Increasing chance of rain moving into the mid-Mississippi and Ohio Valley Wednesday night to Thursday morning associated with a cold front.

        NWS
        Wx Today

Items in Pro Farmer's First Thing Today include:

     • Weaker tone for corn, soybeans and wheat overnight
     • Consultant maintains South American crop estimates
     • SovEcon raises Ukraine’s 2021 corn crop estimate, sees much smaller 2022 wheat crop
     • CCI ratings improve for HRW, SRW crops
     • A lot of cattle changed hands again last week
     • Pork cutout unable to hold Monday morning’s gains


POLICY FOCUS


— CBO announced it plans to release a complete cost estimate for the Build Back Better Act, by the end of the day on Friday, Congressional Budget Office (CBO) Director Phill Swagel announced Monday.

     Swagel: “The Congressional Budget Office anticipates publishing a complete cost estimate for H.R. 5376, the Build Back Better Act (Rules Committee Print 117-18 incorporating a manager’s amendment by Congressman Yarmuth), by the end of the day on Friday, November 19. The estimate will be published on CBO’s website.”

     Swagel also provided a schedule for publishing cost estimates from the 13 committee titles that make up BBB. 

     CBO released the Agriculture and Financial Services committee estimates Monday (link). The remaining five will be out by Friday. This includes Education and Labor; Energy and Commerce; Judiciary; Natural Resources; and Ways and Means.

     The moderate Democrats who held up a House vote on the package have agreed to advance it this week, with one major proviso: they want information from the CBO on how much the legislation will cost. That is about to be delivered.

     Comments: This looks like, at the earliest, a House vote on the BBB package could come this Friday, but more likely the weekend. But what if, as many suspect, the CBO estimates vary from prior released White House projections. If so, the BBB vote would be punted until after the Thanksgiving recess, something House Speaker Nancy Pelosi (D-Calif.) is trying to avoid. Of note, Pelosi’s message to her leadership team on Monday night was clear: The House isn’t leaving for next week’s Thanksgiving recess without passing the climate and social spending bill. Among the crucial differences is how much money can be raised from increased tax enforcement. “I think we’re all well aware that there’s going to be a discrepancy around the IRS piece and let’s just reserve judgment until we see the whole package,” Rep. Stephanie Murphy (D-Fla.) said. “I think it’s really important that we don’t draw red lines within the media.” The White House cautioned that CBO’s analysis won’t necessarily show the bill is fully paid for, in part because of the way CBO tallies the savings from a huge IRS policy provision. The White House said that provision would bring in as much as $400 billion. CBO Director Phillip Swagel said on Monday that the IRS proposal would yield far less than what the White House was counting on to help pay for its bill — about $120 billion over a decade versus the $400 billion that the administration is counting on. While a “formal tally is expected to be released on Friday, Swagel’s projection “could pose another setback for Biden’s domestic policy legislation, which is already facing steep hurdles in the House and Senate,” the New York Times reports.

— As expected, Biden signed BIF into law on Monday afternoon. President Biden on Monday signed a $1 trillion bipartisan bill that he said will overhaul the nation’s infrastructure and boost the nation’s economy that has been battered by the Covid-19 pandemic. The president called the legislation as a job creator and an example of him fulfilling a campaign promise to reach across the aisle to get things done.

     The signing ceremony on the White House lawn was attended by more than 800 labor leaders, business executives, governors, mayors and lawmakers. Though the White House invited all 32 Republican lawmakers who voted for the bill, only a fraction attended the ceremony on the White House lawn. Among them was Sen. Rob Portman of Ohio who said he hoped to work with Democrats on other bills that “advance the interests of the American people should be rewarded, not attacked.” Several other Republicans, including Sens. Shelley Moore Capito (W.Va.), Bill Cassidy (La.) and Mitt Romney (Utah) and Rep. Tom Reed (N.Y.), were also in attendance. Several of the Republicans who attended are retiring or are known for crossing party lines.

     The Senate first passed the infrastructure bill in August with a 69-30 vote, with 19 Republicans voting for the measure. The bill finally passed the House earlier this month on a 228 to 206 vote, with 13 Republicans joining with most Democrats in voting “yes.”

     The White House announced that Biden has tapped former New Orleans mayor Mitch Landrieu to serve as senior adviser for coordinating the infrastructure plan’s implementation. Landrieu is a veteran of the city’s Hurricane Katrina recovery. The president signed an executive order on Monday that establishes a task force to help implement the law and avoid waste. The panel is co-chaired by National Economic Council Director Brian Deese and Landrieu. Several members of Biden cabinet will be on the task force, including Transportation Secretary Pete Buttigieg, Energy Secretary Jennifer Granholm, Interior Secretary Deb Haaland, Environmental Protection Agency Administrator Michael Regan, USDA Secretary Tom Vilsack and Commerce Secretary Gina Raimondo.

     The legislation will deliver $550 billion of new federal investments in America's infrastructure over five years, including money for roads, bridges, mass transit, rail, airports, ports and waterways. The package includes a $65 billion investment in improving the nation's broadband infrastructure and invests tens of billions of dollars in improving the electric grid and water systems. Another $7.5 billion would go to building a nationwide network of plug-in electric vehicle chargers, according to the bill text.

     Funding timeline. State transportation agencies will likely see the first infusion of highway funds from the infrastructure package by the beginning of December. That money will come via the regular funding formulas the Transportation Department uses to allocate money to states. The infrastructure legislation included a roughly 30% increase in highway formula funding. Roughly $120 billion of the $550 billion in new spending comes in the form of competitive grants. Many of those grants are intended for big-ticket items such as bridge replacements or new rail lines. Funding announcements for the grants may not come until next summer or fall.

     The BIF will be partially paid for with a variety of revenue streams, including more than $200 billion in repurposed funds originally intended for coronavirus relief but left unused; about $50 billion from delaying a Trump-era rule on Medicare rebates; and $50 billion from certain states returning unused unemployment insurance supplemental funds. An estimated $256 billion in funding will be added to the nation’s debt.

      Signing

     Signing

     BIF needs

— CFAP 2 payments now at $18.8 billion. Total payments approved under the Coronavirus Food Assistance Program 2 (CFAP 2) are now at $18.82 billion as of Nov. 14, with original CFAP 2 payments at $13.99 billion, up slightly from prior figures while top-up payments were largely unchanged at $4.82 billion. Total payments under CFAP 1 are at $11.79 billion, with $10.6 billion in original CFAP 1 payments and $1.19 billion in top-up payments as of Nov. 14, little changed from prior figures.


AFGHANISTAN


— Taliban forces held a military parade in Kabul using dozens of captured American-made armored vehicles and Russian helicopters in a show of strength as the group continues to build a standing army after gaining control of Afghanistan. Most of the weapons and equipment Taliban forces now use were supplied by the U.S. to the Western-backed government in Kabul with the intention of bolstering the fight against the insurgents. Some $28 billion worth of defense articles and services were transferred from the U.S. to the Afghan government from 2002 to 2017.


BIDEN ADMINISTRATION PERSONNEL


— RMA leader named. Marcia Bunger, a South Dakota farmer, was appointed administrator of the Risk Management Agency (RMA), which oversees the federally subsidized crop insurance system. Bunger joins USDA after serving as a County Executive Director for USDA’s Farm Service Agency (FSA) for 18 years. In total, she has over 25 years of experience working for USDA in the Farm Service Agency. Bunger is also the owner and operator of a 2000-acre, family-owned farm. Bunger graduated cum laude and received her bachelor’s degree from Augustana College. She will be the first person who is a member of the Asian American and Pacific Islander community and the first woman to serve as Administrator for RMA. Link to for more details and for other recent USDA announcements.


CHINA UPDATE


— President Biden and Chinese President Xi Jinping used a virtual meeting Monday evening to cool tensions between the two powers as the leaders seek to manage issues they disagree on and identify ways to communicate to avert conflict. The meeting lasted more than three hours, with the White House saying the two discussed a range of topics including Afghanistan, North Korea and Iran, as well as human rights, climate change and concerns over Taiwan. Biden spoke to Xi from the Roosevelt Room of the White House, where he was joined by top officials including Secretary of State Antony Blinken, Treasury Secretary Janet Yellen and National Security Advisor Jake Sullivan. Xi had his own array of advisors with him, as well.

     The discussion didn’t produce any major resolutions, officials said, in line with White House prior statements that sought to manage expectations of the meeting in recent days. State broadcaster China Central Television said Biden offered reassurances that the U.S. would “not support ‘Taiwan independence’” and that it wouldn’t seek to change the Chinese system of government.

      Xi said the new round of rising tensions in the Taiwan Strait were due to island authorities who he said were attempting to “rely on the U.S. to seek independence,” according to a readout by China’s official Xinhua News Agency. “We have the patience and are willing to strive for the prospect of peaceful reunification,” Xinhua quoted Xi as saying. “But if the separatist forces of ‘Taiwan independence’ continue to provoke and cross the red line, we will have no choice but to take drastic measures.”

     On trade and economic issues, Biden called on China during the meeting to fulfill its commitments under a Phase 1 trade deal signed early last year, according to the White House readout. Biden said that he was clear with Xi about the need to protect American workers and industries from what the White House called China’s “unfair trade and economic practices,” fulfilling U.S. business leaders’ hopes that Biden would address broader issues, including China’s industrial subsidies.

     Xi warned against politicizing bilateral trade issues, saying that the U.S. should stop “suppressing” Chinese companies through the lens of national security, according to Xinhua. Xi also added that China will take steps to make it easier for U.S. businesspeople to travel to China during the Covid-19 pandemic to promote U.S.-China trade and help both countries’ economic recovery, said Xinhua.

     No action on tariffs between the two countries. Earlier in the day, White House press secretary Jen Psaki was asked why the White House didn’t expect Biden and Xi to discuss tariffs during their meeting. She said the two could discuss “a range of topics.” But, she added, it’s really under U.S. Trade Rep. Katherine Tai’s purview. Psaki said Biden “entrusts her” to lead the ongoing U.S.-China trade talks. “He’s regularly briefed, and that’s why there’s a lot of other topics that will be discussed," she said.

     Virtual pool
     In a virtual summit, President Biden and President Xi Jinping showed willingness to manage their conflicts, but tensions remain. Pool photo by Sarah Silbiger/EPA, via Shutterstock

— Communist Party published a document that sets up Xi to potentially rule for life. Chinese state media on Friday released a landmark 36,000-word text of a historical resolution passed by leaders last week in Beijing, a document that spans from the ruling party’s turbulent beginnings to Xi’s plan to bolster the country’s stature as a major global power. China had been awaiting the doctrine since the end of a four-day Central Committee gathering, only for it to be released shortly after Xi wrapped up the virtual summit with Biden.


TRADE POLICY


— Mexico and Canada take aim at Biden’s electric vehicle plans; say they breach terms of USMCA pact. While not yet passed into law, President Biden’s Build Back Better (BBB) package contains language of a tax credit of $7,500 for electric vehicles made only in the U.S. from 2026. Another $4,500 of tax credits are available for purchasing electric cars made with union labor. On Friday, Mélanie Joly, Canada’s foreign minister, said she had raised the issue in a meeting with U.S. Secretary of State Antony Blinken. The topic will very likely be on the agenda when leaders from the three countries meet at the White House this week, the Financial Times reported.

     Mary Ng, Canada’s trade minister, has previously written to the Democratic and Republican leaders and to Katherine Tai, US trade representative, and Gina Raimondo, U.S. Commerce secretary, to convey Ottawa’s “very serious concerns” about the EV credits. Ng’s office said that Washington’s proposed measures were “inconsistent” both with its obligations under USMCA, the updated North American trade deal struck between the three countries under Donald Trump, and with the rules of the World Trade Organization. Ng’s letter reminded U.S. officials that Canada was “the only country” in the western hemisphere to have stores of all of the critical minerals needed to build an electric vehicle battery, and that Canada was therefore “necessary for the United States to achieve its electric vehicle objectives in the future”.

     Tatiana Clouthier, Mexico’s economy minister, has sent her own letters to U.S. legislators to ask that the proposals be altered to be brought in line with USMCA.

     Tai has not said whether the U.S. proposals contravened the USMCA trade agreement that she helped broker as the Democrats’ chief trade counsel in the House of Representatives. “I’m aware of concerns that our trading partners have raised, and we care about these concerns,” she said.

— U.S. ag attaché notes Brazil trim to import tariffs could become permanent if Mercosur adopts. Brazil Nov. 5 announced it would lower import tariffs by 10% on 87% of all goods and services through Dec. 31, including ethanol (18% from a prior 20%), beef (9% from a prior 10%), blueberries (9% from a prior 10%) and other products, according to a report from the U.S. ag attaché in Brasilia. In all, the reductions apply to “almost all products except for sensitive and strategic products, such as automobiles and parts, toys and textiles.” Brazil adopted the measures via a clause in the Mercosur trade bloc agreement, citing the “emergency related to the pandemic crisis, to alleviate its negative effects.” The measure could become permanent if other Mercosur countries agree, the said. Brazil and Argentina this year agreed to a 10% reduction in tariffs, but the report noted Argentina “has delayed formal approval.” It is not clear what impact the action has but it could present an opportunity for U.S. ethanol exports amid rising production in the U.S.


ENERGY & CLIMATE CHANGE


— Schumer lobbies for SPR release. Senate Majority Leader Chuck Schumer (D-N.Y.) added his voice to a chorus of Democrats calling on the Biden administration to open the Strategic Petroleum Reserve (SPR) in response to high gas prices. “Let's get the price of gas down right now. And this will do it,” Schumer said in a press conference over the weekend. A group of Senate Democrats, mostly from states in the northeast, which is seeing among the highest gas prices on average, wrote Biden last week and asked him to consider opening the SPR and imposing a ban on U.S. crude oil exports.

— Bloomberg: Adjusting RFS could be administration’s quickest tool to lower gas prices. Reducing Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS) could be the quickest way for the Biden administration to lower gasoline prices, according to a report from Bloomberg. Lowering the obligations for refiners to blend ethanol into the U.S. fuel supply could lower U.S. pump prices “in the double digits” per gallon, according to John Auers with Turner, Mason & Co., an energy consulting firm.

     Reducing the mandates now could also provide benefits as straight gasoline is priced cheaper than ethanol-blended gasoline, the item noted, citing Bloomberg data. However, the action could also backfire on the administration as it would anger biofuel and farming interests and would call into question US commitments to lower carbon emissions, according to Geoff Cooper with the Renewable Fuels Association.

     EPA still has not yet released its RVO levels for 2021 or 2022, with the proposed levels being shown as under review at the Office of Management and Budget (OMB) since Aug. 26. 


LIVESTOCK, FOOD & BEVERAGE INDUSTRY


— Tyson Foods reported a jump in sales after sharply raising prices for its beef, chicken and pork, citing growing costs the company said were likely to persist. Faced with a tight labor market, Tyson has raised wages and added benefits like sick leave for plant workers to help boost staffing. The Arkansas-based meat firm lifted prices across all of its major divisions as cost of cattle jumped by one-fifth year over year in the quarter ended Oct. 2. Tyson’s logistics expenses climbed about 30%, executives said, while the company also has paid more for ingredients and packaging materials. Tyson, which produces roughly 1 of every 5 pounds of chicken, beef and pork in the U.S., and other meatpackers have been struggling to keep up with demand from supermarkets and reopening restaurants. A nationwide labor shortage has left many processing plants understaffed

     Over the most recent quarter, its average beef prices rose by nearly one-third since last year, while pork prices jumped by 38% and chicken about 19%. “The inflation we incur needs to be passed on,” said finance chief Stewart Glendinning. Tyson’s earnings rose to $1.36 billion in the fourth quarter, more than doubling from that period last year, and its beef unit’s operating margins jumped from 9.7% a year ago to 22.9%.

     Meat price changes

— Smithfield to develop preparedness plan for infectious diseases. Smithfield Foods will pay a $13,494 penalty for failing to protect workers from the coronavirus at its South Dakota slaughter plant in 2020 and will develop a company-wide preparedness plan against infectious diseases, the Labor Department said on Monday. Smithfield closed the plant in Sioux Falls for 25 days during a Covid-19 outbreak that infected 1,294 workers and killed four of them.

— Fake pork made from plants is having no luck getting accepted as kosher by Jewish authorities or as halal by Islamic ones. Link for details via the WSJ.


CORONAVIRUS UPDATE


Summary: Global cases of Covid-19 are at 253,994,337 with 5,110,098 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 47,221,647 with 764,265 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 442,005,260 doses administered, 195,275,904 have been fully vaccinated, or 59.49% of the U.S. population

— Pfizer signs license agreement to allow broader global access to its experimental Covid-19 antiviral pill. Pfizer said Tuesday it signed a licensing agreement to allow broader global access to its experimental Covid-19 pill. The agreement with the Medicines Patent Pool, a United Nations-backed public health organization, would allow generic manufacturers to make the pill widely available in 95 low- and middle-income countries covering 53% of the world's population, the company said.


POLITICS & ELECTIONS


— Election Day 2022 is 357 days away. Election Day 2024 is 1,085 days away.

— Leahy to retire from Senate. Sen. Patrick Leahy (D-Vt.) on Monday said he will not seek re-election in November 2022, opening up another seat that Democrats will need to defend if they are to maintain their razor-thin Senate majority. He will retire after serving eight terms, dating back to Watergate. The Burlington Free Press has a roundup of Leahy’s career highlights (link).

     Leahy’s retirement will likely open an opportunity for Rep. Peter Welch (D-Vt.) to run for Senate. While Leahy’s Vermont Senate seat is seen as still leaning Democratic, political volatility in next year’s congressional campaigns could make this race one to watch as Democrats attempt to hold onto their majority.

     The eventual GOP candidate will be key. The state’s incumbent Republican Gov. Phil Scott just coasted to reelection by 41 percentage points in 2020. Scott’s popularity in deep-blue Vermont has some noting an outside shot at a GOP pickup opportunity in New England. However, Scott reiterated that he won’t run (link).

     As for Leahy, he and his staff literally wrote dairy policy in many farm bills. With former House Ag Chairman Collin Peterson (D-Minn.) no longer in Congress, and Leahy’s coming departure, the dairy industry will have lost two very important lawmakers who made sure their interests were served.

     Leahy‘s retirement provides an opening for Vermont to shed its distinction as the only state that’s never sent a woman to Congress. If Rep. Peter Welch (D) runs to succeed Leahy in the Senate, as many expect, the race for Welch’s statewide congressional district in the blue state could include one or more female officeholders. Potential candidates for either include Lt. Gov. Molly Gray (D), state Senate President Pro Tempore Becca Balint (D), and state Sen. Kesha Ram Hinsdale (D).

— Will Sens. Johnson, Thune seek re-election? There are only two other members of the Senate who haven’t disclosed their plans: Sens. Ron Johnson (R-Wis.) and John Thune (R-S.D.). Thune is still considering his 2022 plans, telling the Grand Forks Herald’s that he wants to avoid a divisive campaign season (link). Thune is next in line to be GOP leader after Mitch McConnell (R-Ky.) retires.

— Den Jackie Speier will not run for re- election to Congress in 2022. Rep. Jackie Speier (D-Calif.) announced today that she will not run for re-election in 2022, becoming the latest House Democrat to bow out of Congress ahead of what is expected to be a difficult election year for the party.

— Rep. Cindy Axne (D-Iowa) is running for re-election, and passing on a run for governor, the Des Moines Register wrote (link). Axne announced her plans during an interview on the Iowa PBS show Iowa Press, a day after Rep. Mariannette Miller-Meeks (R-Iowa) said she would run in Iowa-01 rather than run in Axne’s Iowa-03, which she was drawn into this cycle.

— O’Rourke enters Texas gubernatorial race. The Dallas Morning News reports (link) former Rep. Beto O’Rourke (R-Texas) “on Monday launched his campaign for governor by casting himself as a leader who is focused on the critical needs of the state, instead of the ‘extremist’ agenda he says is being advanced by” Gov. Greg Abbott (R-Texas). Unlike in his failed 2018 Senate run, he said he’d use polling this time, hit his opponent earlier and accept unlimited donations.

     A poll by the University of Texas at Austin and The Texas Tribune recently showed O’Rourke running 9 percentage points behind Abbott. The Republican governor is already sitting on a war chest of $55 million in a state where Donald Trump beat Joe Biden by nearly 6 percentage points last year and where the last Democrat to win the governorship was Ann Richards, more than a quarter century ago. The Cook Political Report with Amy Walter said Monday it would keep the Texas governor’s race likely Republican, noting that the environment for Democrats will be much worse in 2022 than when O’Rourke ran against Cruz in 2018.

— Wyoming Republican Party will no longer recognize Rep. Liz Cheney (R-Wyo.) as a member after a 31-29 vote Saturday.


CONGRESS  


— Congress’ schedule: The Senate is in at 10 a.m. ET to consider Biden’s picks for assistant secretary at the Treasury Department and undersecretary of agriculture (Robert Bonnie). The House also meets at 10 a.m. ET, with plans to consider 13 bipartisan veterans-related bills under expedited floor procedure.

— Lawmakers held discussions about a short-term government funding measure that would run through Dec. 17, Sen. Richard Shelby (R-Ala.) said in a hallway interview cited by Bloomberg. Shelby, the top Republican on the Appropriations Committee, said he’s skeptical lawmakers can strike a full-year funding deal by Dec. 17. Government funding is currently set to expire after Dec. 3.


OTHER ITEMS OF NOTE     


— NATO warned Russia that it would stand by Ukraine, noting “a significant, large Russian military build-up” along their border — just as the Russians are helping to foment a migrant crisis at the EU’s Polish border with Belarus. America had cautioned its European allies last week that Vladimir Putin, Russia’s president, may be preparing to send troops into more of eastern Ukraine.


EVENTS AND REPORTS


Tuesday, Nov. 16

· Federal Reserve. Atlanta Fed President Raphael Bostic, Philadelphia Fed President Patrick Harker and San Francisco Fed President Mary Daly to speak.
· EPA farm and ranch panel. Final day of the EPA Farm, Ranch, and Rural Communities Advisory Committee to discuss topics of relevance to agriculture and rural communities, specifically the FRRCC's recommendations on creating a holistic pesticide program for the future and supporting inter-agency environmental benchmarks with interagency partners on the issues of water quality and quantity and food loss and waste.
· Renewable economy in rural America. House Agriculture Commodity Exchanges, Energy, and Credit Subcommittee hearing on "A Look at the Renewable Economy in Rural America."
· Public lands and renewable energy. House Natural Resources Energy and Mineral Resources Subcommittee hearing on "Plugging in Public Lands: Transmission Infrastructure for Renewable Energy."
· Midterm elections. CQ RollCall and FiscalNote virtual discussion on "2022 Midterm Election Preview: The Battle for Control of Congress."
· Energy price trends. Senate Energy and Natural Resources Committee hearing on "Domestic and International Energy Price Trends."
· DHS oversight. Senate Judiciary Committee hearing on "Oversight of the Department of Homeland Security."
· China Belt and Road initiative. International Institute for Strategic Studies discussion on "Western Responses to China's Belt and Road Initiative."
· Social issues and businesses. Fortune CEO Initiative, a forum for global corporate leaders committed to addressing major social problems as part of their core business strategies.
· Cybersecurity in government. SC Media virtual 2021 SC Gov conference with the theme "Enabling a federal cybersecurity reset,” including a session on "Buying power: How feds can drive cyber resiliency” with participation from Ja'Nelle DeVore, acting chief information security officer at USDA.
· Digital mapping. United States Energy Association and the U.S. Agency for International Development's Bureau for Development, Democracy, and Innovation hold a virtual discussion on "Distribution Digital Mapping," focusing on how "mapping of distribution infrastructure can significantly improve network management."
· Climate change and the Arctic. House Foreign Affairs Europe, Energy, the Environment and Cyber Subcommittee hearing on "National Security Implications of Climate Change in the Arctic."
· Trade and climate issues. International Trade Administration teleconference of the Environmental Technologies Trade Advisory Committee, including a review of draft recommendations and conduct subcommittee breakouts under the themes of Trade Policy and Export Competitiveness, Climate Change Mitigation and Resilience Technologies, and Waste Management and Circular Economy.
· COP26 and sustainability. Politico virtual Sustainability Summit on the U.N. Climate Change Conference and "what it will take to go from making pledges to taking action."
· SBA issues. House Small Business Committee hearing on the opportunities and challenges for the Small Business Administration with Administrator Isabel Guzman.
· Ransomware. House Oversight and Reform Committee hearing on "Cracking Down on Ransomware: Strategies for Disrupting Criminal Hackers and Building Resilience Against Cyber Threats."
· Nomination votes. Senate Energy and Natural Resources Committee markup to vote on the nominations of Laura Daniel-Davis to be assistant Interior secretary for land and minerals management; and Sara Bronin to be chairman of the Advisory Council on Historic Preservation.
· Minerals and transportation electrification. Atlantic Council and the National Mining Association virtual discussion on a new report, "The Role of Minerals in U.S. Transportation Electrification Goals."
· Ocean carrier issues. Federal Maritime Commission meeting with a staff briefing on Ocean Carrier Revenue, Service Contract and Spot Pricing and on Ocean Carrier Capacity Analysis and Blank Sailing Trends.
· Commerce nominees. Senate Finance Committee hearing on the nominations of Maria Louise Lago to be Commerce undersecretary for international trade; and Lisa Wang to be an assistant Commerce secretary for enforcement and compliance.
· Clean energy supply chains. House Energy and Commerce Energy Subcommittee and Environment and Climate Change Subcommittee joint hearing on "Securing America's Future: Supply Chain Solutions for a Clean Energy Economy."
· U.S.-UK relations. Heritage Foundation discussion on "the present state of the U.S./UK Special Relationship, the outlook for American leadership on the world stage, the future of the British Monarchy, and the prospects for Great Britain in the Brexit era."
· GOP response to Democratic tax plans. House Ways and Means ranking member Kevin Brady (R-Texas); and Rep. Adrian Smith (R-Neb.) hold a virtual meeting to discuss "Democrats' Made-in-America Tax Sends Jobs Overseas, Slows Growth and Investment."
· Climate and foreign policy. German Marshall Fund of the United States virtual discussion on "Changing Tides: The New Role of Climate Change in Foreign Policy."
· Energy and transportation issues. Surface Transportation Board holds a meeting by teleconference of the Rail Energy Transportation Advisory Committee.

· Economic reports. Retail Sales | Import & Export Prices | Business Inventories | Industrial Production | Housing Market Index   

· Energy reports. IEA monthly Oil Market Report | API U.S. inventory report | Angola preliminary loading program (January)

· USDA reports. ERS: Livestock, Dairy, and Poultry Outlook | Sugar and Sweeteners Outlook 


 

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