Concentration in Meat Processing Industry Focus of Two Hearings Today

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Fed meeting will focus on tapering timeline | Focus on Fed chairman’s presser

 


In Today’s Digital Newspaper


 

Market Focus:
• Fed decision day and presser by chairman Powell… don’t expect much new
• IMF: Global economic diverging based on countries rolling out Covid-19 vaccination
• Home price index shows soaring values, especially in Phoenix
• Airlines grappling with shortages of jet fuel at some smaller airports in Western states
• Commodity adviser and trader Richard Crow sums up weather/crop impact

• Caffein high as coffee prices jump to six-year high
• Toyota suspends production at two Japanese plants on rising Covid-19 cases  
• Ag demand update

Corn and soybeans facing light pressure, spring wheat leading complex higher
• Excessive heat continues for central U.S., with severe weather possible
• Day 1 of spring wheat tour calculates a sub-30 bu. per acre yield
• Bunge also sees profits surge
• Early cash market test at steady to marginally higher prices
• Trend of the hog market is still to the upside

Policy Focus:
• Lawmakers narrow gaps to get to end zone on physical infrastructure measure
• House Ag panel clears reformed WHIP+ measure for 2020 and 2021 ag disasters
• CBO USDA July baseline predicts low farm program outlays amid new farm bill debate

Biden Administration Personnel:
• Senate advances BLM nominee via procedural vote
• Biden announces USDA position
• Biden ‘best friend’ gets EU ambassador position

China Update:
• China building new network of silos for launching nuclear missile

Trade Policy:
• Canada dairy, Mexico biotech issues key concerns after first year of USMCA

Livestock, Food & Beverage Industry Update:
• So, what’s the reason, again, why food prices need to rise?


Coronavirus Update:
• CDC reversing parts of its mask guidance
• Biden considering vaccine mandate for federal workers
• Senate leaders advised that face masks should be used

Politics & Elections:
• Ellzey won a special election runoff in Texas, defeating Trump-endorsed candidate

Congress:
• Big funding boost for Capitol Police and National Guard, security upgrades for Congress
• Bill reintroduced to overhaul U.S. sugar program; measure faces steep hurdles


Other Items of Note:
• Mexico’s Cuba aid
• Biden wants to phase in higher domestic content requirements for federal procurement

 


MARKET FOCUS


 

Equities today: U.S. equities opened slightly higher (Dow up around 50) following megaprofits from S&P 500 heavyweights Apple, Microsoft and Alphabet — Apple posted the biggest spring-quarter profit in its 45-year history, $21.7 billion for the three-month period that ended in June. Facebook reports earnings today, and Amazon is up tomorrow. According to FactSet, analysts expect Facebook to report a profit of $8.8 billion, up 70% from last year, and Amazon to make $6.4 billion, up more than 20% from the year before. Meanwhile, Fed officials are set to accelerate deliberations over how to scale back their easy-money policies, though they look unlikely to initiate any reduction in bond purchases until later this year. In Asia, Japan’s Nikkei 225 fell 1.4%. The Hang Seng Index added 1.5%. The Shanghai Composite Index shed 0.6% for its fourth consecutive day of declines.

     U.S. equities yesterday: The Dow declined 85.79 points, 0.24%, at 335,058.52. The Nasdaq lost 180.14 points, 1.21%, at 14,660.58. The S&P 500 was down 20.84 points, 0.47%, at 4,401.46.

     Stocks

On tap today:

     • U.S. advance economic indicators for June are out at 8:30 a.m. ET.
     • Federal Reserve releases a policy statement at 2 p.m. ET and
     • Chairman Jerome Powell holds a press conference at 2:30 p.m. ET
     • Blinken meets Modi. U.S. Secretary of State Antony Blinken meets with Indian Prime Minister Narendra Modi in New Delhi today, making him the third major U.S. official to visit the country this year after Defense Secretary Lloyd Austin and climate envoy John Kerry.
     • U.S./Russia talks. U.S. Deputy Secretary of State Wendy Sherman, fresh from trips to China and Oman, leads the U.S. delegation in Geneva at today’s U.S.-Russia Strategic Stability Dialogue. Bonnie Jenkins, the undersecretary of state for arms control and international security, joins Sherman following her Senate confirmation last week.

Federal Reserve officials will resume deliberations today about how and when to begin paring their asset purchases amid an economic rebound clouded by supply-chain bottlenecks and rising Covid-19 cases. The central bank at the end of last year said it would continue to purchase $120 billion in Treasurys and mortgage-backed securities monthly until officials deemed they had achieved “substantial further progress” towards their goals of low unemployment and inflation reaching their 2% goal. Reports note that officials are likely to receive a formal staff briefing around when to start paring their monthly purchases of $80 billion in Treasury securities and $40 billion in mortgage securities, and how quickly to reduce, or taper, them.

     Bottom line: With the Delta virus variant raging, the case for delaying an exit from stimulus is clear. The Fed is seen holding rates near zero at the end of their two-day policy meeting on Wednesday, and repeating a vow to keep buying bonds at the current $120 billion monthly pace. Meanwhile, there's more important economic news coming up this week. Gross domestic product for the second quarter will be released tomorrow, as well as weekly jobless claims. On Friday, the Fed will publish the personal consumption expenditure index, which is the central bank's preferred measure for inflation.

     Bond prices

Global growth. The International Monetary Fund cited access to Covid-19 vaccines as the main driver dividing the global economic recovery into “two blocs,” as it launched its World Economic Outlook on Tuesday. The lender kept to its April forecast for global growth of 6% but warned such an expansion would be uneven, as developed countries largely outpaced their developing counterparts. Improved forecasts for advanced economies were offset by downgrades for emerging markets and low-income countries. IMF Chief Economist Gita Gopinath urged multilateral action “to ensure rapid, worldwide access to vaccines, diagnostics and therapeutics,” to avoid the mutation and spread of more contagious Covid-19 variants.

     Vaccines and distribution
     IMF forecasts

Phoenix had the fastest home-price growth in the country for the 24th straight month, at 25.9%, marking the longest any city has held the top spot for annual price growth since the inception of the S&P CoreLogic Case-Shiller National Home Price Index. Home-price growth climbed to a new record in May, as low mortgage interest rates continued to drive robust homebuying demand. The index, which measures average home prices in major metropolitan areas across the nation, rose 16.6% in the year that ended in May, the highest annual rate of price growth since the index began in 1987. The Covid-19 pandemic spurred households to seek out more living space, and interest rates have held near record lows.

     Home prices

Supply chain for jet fuel is looking more fragile. Airline carriers are grappling with shortages of jet fuel at some smaller airports in the western U.S., the Wall Street Journal reports (link), adding a new challenge to an aviation sector that has been whipsawed during the pandemic by tumbling demand that has now turned into a travel boom. The rush by passengers back to airports has collided with a shortage of labor and logistical challenges. So far, airports hurt by the fuel shortage are smaller sites in the West. But executives fear the factors limiting distribution, including a lack of truck drivers to haul the fuel and insufficient pipeline capacity, could spread the problems to other sites. The supply is also being affected by the wildfires rolling across western states, with fuel now being diverted to aircraft involved in fighting the blazes.

Market perspectives:

     • Outside markets: U.S. dollar index is firmer amid a mixed tone of foreign currency rivals against the greenback. Yield on the 10-year U.S. Treasury note has risen to trade just above 1.26%. Gold futures are weaker while silver has edged higher ahead of U.S. market action. Gold is trading around $1,797 per troy ounce and silver around $24.80 per troy ounce.

     • Crude oil futures have continued to be in positive territory as traders await U.S. gov’t inventory figures due later this morning. U.S. crude is trading around $72.15 per barrel and Brent around $74 per barrel. Crude prices rose in Asian action, with U.S. crude up 48 cents at $72.13 per barrel and Brent up 41 cents at $73.93 per barrel.

     • Commodity adviser and trader Richard Crow sums up weather/crop impact: “The weather pattern for the U.S. is one of growing concern.  The present pattern of the extreme heat breaks this weekend and brings seasonal temps.  The moisture for the next 6 days will be vital. Moisture will be scattered. The real concern is all-weather models have the ridge forming back over Neb in the 11-day forecast. The 11-15 has heat and dry weather. For now, 40% of the crop areas may get some moisture this weekend.”

     • Coffee prices jumped to a six-year high as the worst frost to strike Brazil’s coffee-growing region in more than 25 years is set to cut a chunk out of next year’s crop. The cold snap is the second weather shock in recent months to strike farmers in Brazil, the world’s biggest coffee producer. Before the frost came a drought that parched the 2021 crop. There’s not much relief from alternative markets, with a shortage of containers creating difficulties in shipping coffee from Southeast Asia.

        Coffee surges

     • Toyota will suspend production at two Japanese plants as rising coronavirus infections in Southeast Asia disrupt parts supplies.

     • Ag demand: Egypt bought 120,000 MT of wheat from Ukraine and 60,000 MT of wheat from Romania in a tender yesterday. Qatar is seeking 100,000 MT of bagged barley in an international tender. Jordan purchased 60,000 MT of wheat in an international tender

     • NWS weather: There is a Moderate Risk of severe thunderstorms over parts of the Upper Mississippi Valley, Upper Great Lakes, and parts of the Ohio Valley through Thursday morning... ...There is a Slight Risk of excessive rainfall over parts of the Upper Mississippi Valley/Upper Great Lakes through Thursday morning... ...There is a Slight Risk of excessive rainfall over parts of the Southwest Thursday into Friday morning... ...Heat Advisory over parts of the Mississippi Valley and the Plains; Excessive Heat Warning over parts of the Northwest.

        NWS
        Wx Today

Items in Pro Farmer's First Thing Today include:

     • Corn and soybeans facing light pressure, spring wheat leading complex higher
     • Excessive heat continues for central U.S., with severe weather possible
     • Day 1 of spring wheat tour calculates a sub-30 bu. per acre yield
     • Bunge also sees profits surge
     • Early cash market test at steady to marginally higher prices
     • Trend of the hog market is still to the upside

 


POLICY FOCUS


 

— Lawmakers narrow gaps in attempt to get to end zone on physical infrastructure measure. Senators negotiating the terms of a $579 billion infrastructure plan settled some of the issues holding up an agreement. Meanwhile, President Joe Biden also has been engaged as he met yesterday with Sen. Kyrsten Sinema (D-Ariz.), the lead Democratic negotiator in the infrastructure talks as Democrats and Republicans wrangling over funding for mass transit and details about an extension of broadband access.

     A dispute over spending levels on water projects appeared to be resolved, according to Sens. Mitt Romney (R-Utah) and Jon Tester (D-Mont.). “There will always, always be details that have to be worked out, but I’m pretty optimistic at this stage,” said Romney, a member of the bipartisan group. “Nothing’s 100%, but it looks pretty good.”

— House Ag panel clears $8.5 billion reformed WHIP+ bill. The House Agriculture Committee as expected on Tuesday passed HR 267, the 2020 Wildlife and Hurricane Indemnity Programs Plus (WHIP+) Reauthorization Act and the On-Farm Storage Loss Program for 2020 and 2021. The bipartisan vote was unanimous by voice. The bill would provide disaster assistance to a wide range of producers than under current programs. The bill authorizes $8.5 billion in appropriations, but the money must be approved by appropriators, likely in a coming supplemental appropriations bill. Link to section-by-section text.

     Producers would be eligible for up to $250,000 a year in aid in most cases.

     The expanded WHIP+ would cover damage such as the derecho that hit Midwest corn and soybean fields last summer — “the most costly thunderstorm in U.S. history,” according to Rep. Randy Feenstra (R-Iowa) — and smoke tainted wine grapes from wildfires in California. Tainted grapes carry “almost a medicinal taste,” said Rep. Jimmy Panetta (D-Calif.). “Those products are almost impossible to market.”

     The most recent WHIP+ program has significant implementation and funding issues. Lawmakers said aid should reach producers more rapidly because they are using an existing program. “The timing of assistance can be a matter of survival for farmers and ranchers,” said Rep. Alma Adams (D-N.C.). It took a year for federal assistance to reach farmers after Hurricane Florence in 2018, she said.

     Meanwhile, USDA’s Risk Management Agency gave farmers an additional 60 days to pay their insurance premiums without incurring a penalty. “Farmers and ranchers are weathering tough drought conditions this year, and we want to help ease the burden by extending payment deadlines and deferring interest accrual,” said Richard Flournoy, acting RMA administrator.

— CBO USDA July baseline predicts low farm program outlays amid new farm bill debate. U.S. agriculture is forecast to see the smallest level of government outlays over the next 10 years in Fiscal year (FY) 2023, coinciding with the expected process of crafting a new farm bill, according to the July baseline released by the Congressional Budget Office (CBO) (link). FY 2023 starts in October 2022 and will reflect payments on 2022 production.

     Outlays under the Price Loss Coverage (PLC) are forecast to be at $838 million in FY 2023, reflecting lofty prices for 2022 crops that CBO is currently forecasting. For example, CBO forecasts 2022 corn prices to be $5.70 per bushel. In FY 2022, reflecting 2021 production, PLC payments are forecast at $2.38 billion after a $4.95 billion level forecast for FY 2021. Payments under the program start to rebound in FY 2024, rising to $2.33 billion and climb to $4.8 billion in FY 2027. For the balance of the forecast period through FY 2031, payouts under PLC are expected to be at least $4.3 billion per year.

     Agriculture Risk Coverage (ARC) payments are forecast to drop to $43 million for FY 2023 after totaling $70 million for FY 2022. Payments are only seen getting above $1 billion in FY 2027 and FY 2028—both years are seen at $1.25 billion. Payments for the remainder of the forecast period are seen being at least $683 million.

     Total payments under PLC, ARC and other crop-related efforts are also forecast at the smallest level in FY 2023 at $893 million after being at $5.91 billion in FY 2021 and $2.46 billion in FY 2022. Overall payments are forecast at $2.5 billion in FY 2024 and then are seen between $4 billion and $6 billion over the remainder of the forecast period.

     Dairy Margin Coverage (DMC) payments and livestock disaster programs are the largest non-crop or land-related payments in the baseline. DMC payments reflect the forecast lofty crop prices expected by CBO for 2021 and 2022, with FY 2021 DMC payments seen at $852 million and then surge to $1.82 billion in FY 2022. They are forecast to decline to $892 million in FY 2023 and range between $397 million (FY 2030) and $798 million (FY 2024) during the remainder of the forecast period.

     That takes total payments for crops and livestock to a forecast mark of $7.75 billion in FY 2021, falling to $4.92 billion in FY 2022 and $2.33 billion in FY 2023. Payouts rise in FY 2024 to $3.8 billion and range between $5.23 billion (FY 2025) and $7.1 billion (FY 2027) over the forecast period.

     PLC remains the primary choice for corn, wheat farmers. CBO forecasts that for the 2021 marketing year, 94.9% of corn farmers will choose PLC. For 2022, that level falls to 82.1% and then to 74.4% in 2023. For the remainder of the forecast period, the participation rate runs between 64.1% (2027) and 74.4% (2030). ARC-County (ARC-CO) is only seen being the choice for 1.6% of corn farmers for 2022, rising to 14.4% for 2023 and range from 22.1% (2024) to 32.4% (2026) over the baseline period.

     Corn used to produce ethanol is forecast to be from 5.2 billion bushels for the 2021 marketing year and rise from 5.22 billion bushels for 2022 to 5.480 billion for 2031. Corn exports are seen ranging from 2.375 billion bushels to 2.71 billion bushels over the baseline, with feed and residual use expected to rise from 5.7 billion bushels in 2021 to 6.485 billion bushels in 2031.

     Corn prices are forecast at $5.70 for 2022 and then fall to $4.40 in 2023 and remain below $4 per bushel for 2025-2030.

     For wheat, 82% of farmers are seen having chosen PLC for 2021, with a dip to 76.9% in 2022 and then it is forecast to be from 79.5% over the remainder of the baseline period except for 82.1% in 2027. ARC-CO is expected to be chosen by 16% of wheat producers in 2021, rising to 21.1% in 2022, but seen at 18.5% for most of the remainder of the baseline period except for 2027 when it is forecast at 16%.

     CBO forecasts wheat prices at $6.50 for 2021, with $5.50 in 2022 and then running between $5.10 to $5.20 over the remainder of the baseline.

     ARC-CO is seen as the primary choice for soybean producers, with CBO forecast no PLC enrollment in both 2021 and 2022, while 93.8% are seen having chosen ARC; CBO forecasts ARC-Individual Coverage (ARC-IC) at 6.2% over the baseline. PLC is seen at 23.1% for 2023 with 70.7% for ARC-CO. Over the remainder of the baseline, CBO forecasts PLC will range between 23.1% (2030) and 33.3% (2024 and 2026) with ARC-CO at 60.5% (2024 and 2026) to 70.7% (2030).

     Soybean prices are seen at $13.85 in 2021, $11.25 in 2020 and 2022, then ranging between $9.90 and $10.50 for the remainder of the baseline period. CBO expects soybean crush to be 2.225 billion bushels in 2021 and rise from 2.23 billion in 2022 to reach 2.46 billion in 2031. Soybean exports are seen from 2.075 billion bushels to 2038 billion over the baseline.

     For Upland cotton, growers are expected to use the loan program the most of any commodity over the baseline period. But outlays are substantially lower than other program payments in the baseline. Only $4 million is expected in marketing loan program payments for FY 2021, rising to $56 million for FY 2022 and $124 million for FY 2023. The remainder of the baseline is expected to see outlays of $13 million over FY 2026-2031 with none expected for FY 2025 and $20 million for FY 2024.

     PLC is seen generating considerably more payments than the marketing loan program in the baseline, with enrollment at 99.1% over the baseline. That is seen resulting in payments of $978 million for FY 2021, $410 million in FY 2022 and $181 million for FY 2023. For the remainder of the baseline, PLC payments for Upland Cotton range between $318 million (FY 2024) and $722 million (FY 2029). CBO assumes 99.1% participation in PLC over the baseline.

     As for the Conservation Reserve Program (CRP), CBO does not detail acreage levels, but forecasts payments to be $1.919 billion in FY 2022 and slowly rise to $2.595 billion in FY 2031.

     Absent from the CBO baseline are any climate-related payments or any funding for a carbon bank linked to climate change as those are not programs that have a placeholder in the current budget. Those are expected to be a focal point ahead and that is why some lawmakers are focusing on boosting conservation program spending ahead of the next farm bill so that when CBO puts together the baseline to be used to write the next farm bill, there will be spots in the baseline for those programs.
 


BIDEN ADMINISTRATION PERSONNEL


 

— Senate advances BLM nominee via procedural vote. The Senate yesterday voted 50-49 to discharge the nomination of Tracy Stone-Manning from the Senate Energy and Natural Resources Committee. Tuesday’s vote was necessary to bring her nomination to the floor after the Senate Energy Committee deadlocked on her nomination last week. The panel deadlocked last Thursday on Stone-Manning’s nomination as Bureau of Land Management director amid allegations of her involvement in a 1989 tree-spiking incident.

— Biden announces USDA position. Adrienne Wojciechowski was tapped to serve as assistant secretary for congressional relations at USDA. Most recently, Wojciechowski served as a professional staff member on the Senate Ag Appropriations Subcommittee.  

— Biden ‘best friend’ gets EU ambassador position. President Biden will nominate his longtime friend and confidant Mark Gitenstein to serve as ambassador to the European Union, the White House announced Tuesday Gitenstein is a former international trade lawyer and lobbyist at Meyer Brown who served as ambassador to Romania during the Obama administration. Biden has described Gitenstein as his “best personal friend” and was the first call that Biden’s transition chief made on the job.
 


CHINA UPDATE


 

Missile silos: China appears to be building a new network of silos for launching nuclear missiles, researchers say. Link to details via the WSJ.  

 


TRADE POLICY


 

Canada dairy, Mexico biotech issues key concerns after the first year of USMCA. Canada’s inadequate implementation of new market access for U.S. dairy, Mexico’s foot-dragging on ag biotech approvals, and the lack of a chief ag negotiator nominee were some of the key ag-related issues that surfaced during a Senate Finance Committee hearing Tuesday (July 27) held to mark the first anniversary of the U.S.-Mexico-Canada Agreement (USMCA).

     U.S. dairy industry and biotech officials said more aggressive action is needed to make sure Canada and Mexico uphold their commitments under the pact. Witnesses from environmental and labor groups and lawmakers also stressed the need for enforcement in areas including agreed Mexican labor reforms and environmental provisions of the agreement.

  • Canada dairy market access, exports. Canada’s alleged circumvention of new dairy market access commitments under USMCA through its implementation of dairy tariff rate quotas (TRQs) drew concern from lawmakers. Asked by Sen. Mike Crapo (R-Idaho) to detail the issue, Northwest Dairy Association and Darigold Board of Directors Chair Allan Huttema said Canada’s allocation of a majority of the TRQs through dairy processors is thwarting the ability of U.S. dairy exporters to export higher value products to the Canadian market. The Biden administration is pursuing a complaint under USMCA dispute settlement mechanisms, finalizing an action that was signaled by the Trump administration. Besides dairy TRQs, Huttema said another major issue he would like the U.S. Trade Representative (USTR) to tackle Canadian exports of milk protein isolates and skim milk powders. “There are caps put in place, and they are creating products to circumvent that agreement as well,” he detailed, explaining the issue is negatively impacting U.S. exports to other markets.
  • Mexico biotech issues. A concern is Mexico’s lack of action on biotech crop approvals — despite USMCA provisions requiring the approvals process to be science-based. Biotechnology Innovation Organization (BIO) President and CEO Michelle McMurry-Heath said there is no scientific basis for the delays, calling the situation “particularly disturbing to not only our innovative agricultural businesses, but also to the investors that really support their work.” She added that more recent setbacks “started with the new presidential administration in Mexico,” referring to the administration of Mexican President Andrés Manuel López Obrador, but she said U.S. biotech companies have “received mysterious silence from the Mexican regulators” for years since the approval backlog began.

Sen. Chuck Grassley (R-Iowa) said “it looks like Mexico will not work with us in good faith effort to resolve the issue,” both on biotech approvals and “its recent decree to phase out GMO corn.” He asked what enforcement steps need to be taken, prompting McMurry-Heath to respond, “We really think it's time for the USTR to begin taking enforcement action by appointing an agricultural negotiator,” a comment referencing that the Biden administration has yet to offer a chief ag trade negotiator nominee at USTR. McMurry-Heath praise USTR Katherine Tai and USDA Secretary Tom Vilsack for their efforts to engage with Mexico on biotech issues but suggested the U.S. might need to move forward with bringing a dispute over the matter. An enforcement case “at the minimum” would provide biotech companies and users “a framework and a timeline” to resolve both the approval delays and the decree on phasing out GMO corn, she remarked, adding that it is important to address the issue promptly “so this bad problem doesn't go from bad to worse.” McMurry-Heath said the issue of biotech approvals also has ramifications for climate change resilience. “Biotechnology really allows our agricultural innovators to develop new crops that can withstand the global warming that we've seen to date and prevent future global warming going forward,” she said, adding the uncertainty with respect to Mexico and other trade partners is negatively impacting critical research and investment on new products. A parallel was drawn between Mexico’s actions on GMO approvals and those of China. McMurry-Heath told lawmakers that a BIO analysis of China’s approval delays found that they cost the U.S. “nearly 34,000 jobs between 2011 and 2016.” The finding underscores “that these trade agreements have a real-world impact on Americans earning capabilities and job opportunities, not to mention global warming, nutrition and hunger.”

  • Geographical Indications. Sen. Debbie Stabenow (D-Mich.) asked Huttema what other aspects of USMCA were important to the dairy sector, and which should be replicated in future trade agreements. Huttema praised dispute resolution provisions, but said another key are side letters protecting the use of common cheese names from being curtailed by geographical indications (GIs) — a big push by the European Union (EU).
  • Biden administration moves at USTR, need for TPA renewal. Sen. John Thune (R-S.D.) also cited the lack of a chief ag trade negotiator at USTR nominee as problematic and asked what impact the delay is having on engagement with Canada and Mexico on key trade friction points. “USMCA is really setting the gold standard for science-based trade policies and making sure that our regulators are paying attention to the science, rather than misplaced concerns when judging our biotechnology crops,” responded McMurry-Heath. “A chief ag negotiator at USTR would be our point person on this and would have the most pivotal influence to make sure that these points are made with all of our important trading partners,” she explained.

Another issue raised by Thune was the administration letting Trade Promotion Authority (TPA), or “fast track,” expire. TPA allows an administration to negotiate a trade deal and present the implementing language for the deal to Congress for an up-or-down vote with no amendments. Thus far, the Biden administration has not sought a renewal of TPA. Thune asked McMurry-Heath “how significant” TPA is for the biotech sector. She said TPA is “critically important” and said BIO is “fully supportive” of a renewal and said it helps promote the negotiation of new trade deals that better protect U.S. intellectual property rights — a key for the biotech sector.

 


LIVESTOCK, FOOD & BEVERAGE INDUSTRY


 

— So, what’s the reason, again, why food prices need to rise? Mondelez, the maker of Oreos and Triscuits, said profit nearly doubled and revenue increased in the latest quarter, though costs and expenses also rose. Repeat: profit nearly doubled.

 


CORONAVIRUS UPDATE


 

Summary: Global cases of Covid-19 are at 195,368,552 with 4,178,287 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 34,604,005 with 611,288 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 342,607,540 doses administered, 163,312,474 have been fully vaccinated, or 49.8% of the total U.S. population.

— CDC again urges masks indoors; recommendation applies to everyone, vaccinated or not, in areas of surging cases. The U.S. Centers for Disease Control and Prevention (CDC) on Tuesday recommended a return to indoor masking in public settings even for vaccinated Americans in places experiencing “substantial” or “high” coronavirus transmission rates. The CDC also signaled that schools should implement universal face-covering policies for students and teachers regardless of their vaccination status. The recommendations apply to counties where infection rates are higher than 50 new cases per day per 100,000 residents. That currently applies to roughly two-thirds of the nation’s counties, some of which have seen infection rates surpass 300 new cases per 100,000 people.

     The move is a reversal from the CDC's May guidance, which said vaccinated people didn’t need to wear masks or physically distance in most settings. The vaccines are still effective at preventing serious illness and hospitalizations, and most severe Covid-19 cases in recent weeks have been among the unvaccinated. The official guidance — swayed by research on the Delta variant, which is causing rising case counts and “breakthrough” infections of vaccinated people — is aimed at places where the virus is surging. “This new science is worrisome and unfortunately warrants an update to our recommendation,” said Dr. Rochelle Walensky, the CDC’s director.

     Meanwhile. President Biden said he was considering a vaccine mandate for federal workers. The White House has told staff that they must again wear masks as President Joe Biden weighs a requirement for federal workers to get vaccinated. CNN reports that, according to anonymous federal sources, Biden will “announce on Thursday a requirement that all federal employees and contractors be vaccinated against Covid-19 or be required to submit to regular testing and mitigation requirements.” The announcement will “come in remarks where Biden is also expected to lay out a series of new steps, including incentives, to spur new vaccinations as the Delta variant spreads rapidly throughout the country,” and it “follow[s] the decision by the Department of Veterans Affairs to require its frontline health care workers to be vaccinated over the course of the next two months.”

     Vaccines map

— Senate leaders advised that face masks should be used. Congressional Attending Physician Brian Monahan advised Senate leaders that face masks should be used in internal spaces in Capitol buildings, given the new guidance from the CDC. Monahan also advised House leaders with similar guidance.
 


POLITICS & ELECTIONS




— Jake Ellzey wins Texas special election. The GOP state Rep. unexpectedly defeated Susan Wright, the widow of the Republican lawmaker that Ellzey will replace in the U.S. House. Ellzey’s victory was seen as a repudiation of the power of former President Donald Trump’s endorsement of Wright.


 


CONGRESS  




— Senate reached a bipartisan deal on a $2.1 billion supplemental spending bill that would add funding for Capitol Police and the National Guard, security upgrades for Congress, and expedite the resettlement of Afghans who helped American troops.

— Bill reintroduced to overhaul U.S. sugar program; measure faces steep hurdles. Sens. Jeanne Shaheen (D-N.H.) and Pat Toomey (R-Pa.), and Reps. Virginia Foxx (R-N.C.), and Danny Davis (D-Ill.) on Tuesday reintroduced the Fair Sugar Policy Act of 2021 to make changes to the federal sugar support program. The bill would:

  • Lift restrictions on the domestic supply of refined sugar.
  • Reduce taxpayer liability for sugar processor loan forfeitures.
  • Ensure that the impact on consumers, manufacturers and farmers is considered when the USDA administers the sugar program.
  • Reduce market distortions caused by sugar import quotas.

     The legislation attempts to repeal a subsidy in which the gov’t is required in certain circumstances to buy surplus sugar and re-sell it to ethanol plants at a loss to taxpayers. In addition, the bill reduces price supports and abolishes production controls, under which the federal government decides how much sugar individual sugar companies are allowed to sell. It also provides more flexibility to USDA in regulating sugar imports.

     Comments: This bill like other attempts in the past faces low odds of passage. But in an environment in Washington where anything can (and nearly has) occurred, sugar policy proponents are on guard and educating lawmakers and their staffs about how the reintroduced measure would significantly and negatively impact the U.S. sugar sector and the many jobs it provides.
 


OTHER ITEMS OF NOTE     



— Mexico’s Cuba aid. A shipment of food, oxygen, and medical supplies bound for Cuba is expected to set sail from the Mexican port of Veracruz today, as President Andrés Manuel López Obrador makes good on his promise to provide humanitarian assistance to the island following protests earlier this month. The vessel follows in the wake of another ship carrying aid that left Mexico on Tuesday, and the delivery of 126,000 barrels of diesel fuel from Mexico’s state-run Pemex earlier this week. On Monday, López Obrador called on President Joe Biden to “make a decision” about the U.S. embargo given that “almost all countries of the world” are against it.

— Biden administration wants to phase in higher domestic content requirements for federal procurement, in a change to federal rules, administration officials said. The domestic content requirement would rise to 75% by 2029 from 55%, they said. Biden signed an executive order in January laying out goals to toughen such requirements.


 

 

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OECD boosts global inflation forecasts | Congestion mounts at Calif. Ports | U.S./U.K. trade

Ahead of the Open | September 21, 2021

Ahead of the Open | September 21, 2021 Corn futures seen lower after USDA crop ratings improve and harvest accelerates, soybeans firmer.

First Thing Today | Sept. 21, 2021

Cordonnier warns his U.S. corn & soybean yield forecasts may fall. Gulf terminals slowly coming back online. Inflation will continue to rise over the next two years. Cattle hold up well in the fact of economic jitters.