EPA Faces Deadline Today on 2018 Refinery Waivers Under RFS

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USDA grants big money to UNL for a study of meatpacking industry since Covid pandemic

 

                                                In Today’s Digital Newspaper

 

Ukraine’s President Zelensky calls the latest Western sanctions on Russia too lenient, and accused Russian forces of seeking to destroy evidence of killings in areas under their control. European officials are headed to Ukraine. Russia said Thursday that its forces had secured Solodke, a town in the Donetsk region, and continued strikes across the country.

Germany says it intercepted Russian messages on indiscriminate killings in Ukraine, undermining Moscow's claims it wasn't involved.

The Biden administration is preparing to tap an emergency food aid fund because of the ripple effects of the Russian invasion of Ukraine on hunger in Africa and the Middle East, a U.S. Agency for International Development official told lawmakers on Wednesday.

FOMC minutes released Wednesday as expected revealed officials strongly considered a half-percentage-point increase before opting for half that, and neared agreement on reducing its bond holdings.

U.S. allies plan to release close to 60 million more barrels of oil from their reserves, joining the Biden administration to tame rising prices. Meanwhile, during a hearing yesterday, oil industry officials struck back on Democratic lawmakers pointing the finger for surging gasoline prices at the oil industry. The company leaders countered that prices were driven by Russia’s invasion of Ukraine, restrictive U.S. energy policies and supply-chain shortages slowing down the industry. The committee’s Republicans sought to place blame for high prices on President Biden’s energy policy, including his decision to impose a temporary pause on new oil and gas leases on federal land and his revocation of a permit for the Keystone XL pipeline to carry more oil from Canada.

EPA faces a deadline today on 2018 refinery waivers under RFS. Separately, EPA has proposed denying more than 60 pending SREs in conjunction with its proposed RFS levels for 2020, 2021 and 2022. Details in Energy section.

EPA is weighing its options for allowing a fuel blend that is 15% ethanol (E15) to be more widely available, agency head Michael Regan told the Senate Environment and Public Works Committee on Wednesday. We have more on what Regan told the panel in Energy, including comments about WOTUS and news that the Supreme Court reinstated the Trump WOTUS rule.

Shell said it expects to book first-quarter charges of up to $5 billion related to its exiting ventures with Russia’s Gazprom. Don’t feel too bad for the big energy firm as high energy prices are expected to bolster Shell’s bottom line this year, with analysts forecasting it to make over $30 billion in 2022.

A shortage of Ukrainian sunflower oil has pushed prices of other edible oils to record highs.

USDA provided grant funding of $203,752 to UNL for a meatpacking industry study of various factors that have affected the meat supply chain since the Covid-19 pandemic began.

USDA data signals 95 commercial flocks confirmed with HPAI. USDA’s Animal and Plant Health Inspection Service (APHIS) late Wednesday resumed publication of data on the level of highly pathogenic avian influenza (HPAI) in the U.S.

Conagra tumbled 5.5% in the premarket after issuing a weaker-than-expected forecast for the fiscal year ending in May. The food producer's results are being hit by higher transportation and raw materials costs.

Senate is expected to vote to confirm Judge Ketanji Brown Jackson to the Supreme Court today, with a procedural vote expected at 11 a.m. E.T. that is likely to be followed by a final confirmation vote around 1:45 p.m. ET.

As expected, President Biden on Wednesday extended through Aug. 31 the pause on payments of federal student loans. Does anyone want to bet against another extension that runs through Nov. 8 midterm elections? Meanwhile, renewed calls came from Democrats to cancel student debt.

Shanghai on Wednesday reported nearly 20,000 new local infections, more than 80% of China’s total. Residents are turning to social media to get food and medicine.

 

MARKET FOCUS

Equities today: Global stocks markets were mixed overnight. The U.S. stock indexes are pointed toward slightly higher openings. Asian equity markets finished with losses after US declines and Fed meeting minutes. The Nikkei fell 461.73 points, 1.69%, at 26,888.57. The Hang Seng Index declined 271.54 points, 1.23%, at 21,808.98. European equities are mostly higher in early dealings with the Stoxx 600 up 0.5% and regional markets advancing 0.5% to more than 1%; the FTSE has been slightly weaker, shifting between losses and gains.

     U.S. equities yesterday: While the Dow recovered from its decline following release of the FOMC minutes (see related item), the Blue Chip index still ended down 144.67 points, 0.42%, at 34,496.51. The Nasdaq fell 315.35 points, 2.22%, at 13,888.82. The S&P 500 was down 43.97 points, 0.97%, at 4,481.15.

     Stocks 040622

Agriculture markets yesterday:

  • Corn: May corn futures fell 3 1/4 cents to $7.56 1/2. December futures fell 1 3/4 cents to $7.04 3/4.
  • Soy complex: May soybeans fell 11 1/2 cents to $16.19 1/2. May soymeal fell $4.10 to $461.80, while May soyoil fell 58 points to 71.83 cents.
  • Wheat: May SRW wheat fell 7 cents to $10.38 1/4. May HRW wheat rose 2 1/4 cents to $10.85 after falling earlier as low as $10.61 1/2. May spring wheat fell 3 cents to $11.08 3/4.
  • Cotton: May cotton fell 184 points to 135.69 cents per pound and new-crop December fell 32 points to 114.50 cents.
  • Cattle: June live cattle rose 90 cents to $134.225 after hitting a three-week low early. May feeder cattle rose 95 cents to $159.95.
  • Hogs: April lean hogs rallied $1.075 to $98.75, June futures rose 35 cents to $114.70.
     

Ag markets today: Corn futures are under light pressure this morning, while soybeans and wheat were modestly higher near the end of a quiet, two-sided overnight session. As of 7:30 a.m. ET, corn futures were trading steady to a penny lower, soybeans were 4 to 8 cents higher, winter wheat was mostly 1 to 2 cents higher and spring wheat was 3 to 7 cents higher. Front-month U.S. crude oil futures were around $2 higher and the U.S. dollar index was trading near unchanged this morning.

Technical viewpoints from Jim Wyckoff: “Nymex crude oil futures prices dropped sharply on Wednesday and are presently trading below $100 a barrel. That has put just a bit of risk appetite back into a still very uncertain global marketplace amid the Russia/Ukraine war.”

     April 7 Corn

     April 7 Soybeans

     April 7 Crude

     April 7 Bonds

     April 7 Gold

On tap today:

     • U.S. jobless claims are expected to fall to 200,000 in the week ended April 2 from 202,000 one week earlier. (8:30 a.m. ET)
     • USDA Weekly Export Sales report, 8:30 a.m. ET.
     • Federal Reserve releases February consumer credit data at 3 p.m. ET.
     • Fed speakers: St. Louis's James Bullard on the economy and monetary policy at 9 a.m. ET, Atlanta's Raphael Bostic and Chicago's Charles Evans on economic mobility and employment at 2 p.m. ET, and New York's John Williams gives closing remarks at a New York Fed event at 4:05 p.m. ET.

FOMC minutes: Fed signals faster pace of rate increases. Federal Reserve officials signaled they could raise rates by a half-percentage point at their meeting early next month and begin reducing their nearly $9 trillion asset portfolio as part of their most aggressive effort in more than two decades to curb price pressures. “Participants generally agreed that monthly caps of about $60 billion for Treasury securities and about $35 billion for agency MBS [mortgage-backed securities] would likely be appropriate,” the minutes said. “Participants also generally agreed that the caps could be phased in over a period of three months or modestly longer if market conditions warrant.”

     Many officials last month were prepared to raise rates by a half-point but opted for a smaller, quarter-point increase because of concern over the fallout from Russia’s invasion of Ukraine. Markets now expect the Fed to make half-point increases in May and possibly June. Officials last month approved their first interest rate increase in more than three years and penciled in a series of additional increases this year to help tame inflation that has surged to a four-decade high.

     Fed holdings

Former N.Y. Fed president Dudley says more pain ahead. It's not clear how much the Federal Reserve will have to tighten financial conditions to get inflation under control. "But one thing is certain: To be effective, it’ll have to inflict more losses on stock and bond investors than it has so far," former New York Fed President Bill Dudley writes at Bloomberg Opinion (link).

Deese: Semiconductor shortage cost 1% of GDP. Biden’s top economic adviser said that a shortage of semiconductors last year probably shaved a full percentage point off U.S. economic output in 2021, and that U.S. officials will brief lawmakers on the crisis. “We are 100% vulnerable to foreign supply chains on those advanced semiconductors,” the director of Biden’s National Economic Council told reporters. “The best estimates are that the lack of available semiconductors probably took a full percentage point off of GDP in 2021,” he said.

Corporate bankruptcy filings are at their lowest levels in over a decade. Only 87 U.S. businesses filed for bankruptcy in the first quarter of the year, according to S&P Global Market Intelligence, the lowest first-quarter total in at least 13 years. Companies have benefited from pandemic stimulus programs and cheap funding, but rising interest rates may put balance sheets under more pressure in the quarters ahead.

Top oil company executives rejected claims by Democrats that they are taking advantage of a global crisis to gouge consumers. Over a six-hour hearing, Democrats on a House oversight panel castigated executives from Exxon Mobil, Chevron and other oil giants for raking in historically high profits while slowing their investment in U.S. production. The company leaders countered that prices were driven by Russia’s invasion of Ukraine, restrictive U.S. energy policies and supply-chain shortages slowing down the industry.

Inflation watch: USPS announces a huge jump in prices. The U.S. Postal Service announced the increases on the same day President Biden signed into law a bipartisan bill to erase much of the agency’s debts and allow it to pursue new lines of revenue. The measure will require most postal workers to enroll in USPS-specific health care plans, shift most retirees to Medicare, take onerous payments toward health care benefits for future retirees off the agency’s balance sheets, allow USPS to provide some non-postal services and create new oversight and transparency requirements.

     The new prices, which are set to go into effect July 10, would raise rates for regular, First-Class mail by 6.5% and by 8.5% for package services. A standard stamp would go from $0.58 to $0.60. The large increases were made possible under new authority the Postal Service’s regulator granted it in 2020 and which USPS employed for the first time last year. USPS is expected to generate between $35 billion and $52 billion by 2031 by raising prices.

Market perspectives:

     • Outside markets: The U.S. dollar index is firmer ahead of U.S. market action, with the euro, yen and Swiss franc lower against the greenback. The yield on the 10-year U.S. Treasury note has firmed to trade around 2.61%, with a mixed tone in global government bond yields. Gold and silver futures are advancing in electronic trade, with gold trading above $1,933 per troy ounce and silver above $24.59 per troy ounce.

     • Treasury secretary Janet Yellen talks crypto. Today, in her first speech focusing on digital asset regulation, she will call for “a consistent and comprehensive policy framework that promotes responsible innovation of digital assets and appropriately assesses and mitigates the risks they may pose,” backing up President Biden’s recent executive order on crypto.

     • Crude oil futures moved higher ahead of U.S. trading, with U.S. crude around $98.50 per barrel and Brent around $103.10 per barrel after seeing sharp losses Wednesday. Futures’ recovery started in Asian where U.S. crude had moved above $97.80 per barrel and Brent above $102.90 per barrel.

     • U.S. allies plan to release close to 60 million more barrels of oil from their reserves, joining the Biden administration to tame rising prices. Western officials hope the new supplies will cushion their economies as many buyers move to stop purchasing oil from Russia and European nations debate whether to join them.

     • The U.K. is turning back to nuclear power. Eight new reactors are planned, alongside a much greater emphasis on renewables, but activists are unhappy with the lack of policy guidance on home insulation.

     • Ag demand: Japan purchased 137,516 MT of milling wheat, including 59,999 MT from the U.S., 49,107 from Canada and 28,410 MT from Australia. The Philippines bought 55,000 MT of feed wheat – likely from India. Jordan tendered to buy 120,000 MT of optional origin milling wheat.

     • NWS weather: Severe thunderstorms and excessive rainfall threat over parts of the Southeast and Mid-Atlantic today, followed by heavy rain possible across New England tonight... ...Wet snow over the upper Midwest will begin to taper off on Friday as strong and gusty cold winds persist across much of the Plains... ...Elevated fire weather risk over portions of the central to southern Plains as temperatures reach record levels in parts of California.

        NWS 040722
        Wx 040722

Items in Pro Farmer's First Thing Today include:

     • Quiet trade overnight
     • Beef movement improves as prices ease
     • Cash hog index drops again 

 

RUSSIA/UKRAINE

Summary: Russian forces have completely withdrawn from around Kyiv, Ukraine’s capital, and are regrouping across the border in Belarus and Russia, the Pentagon said. Meanwhile, Mariupol’s mayor said at least 5,000 residents have died during Russia’s siege of the port city.

  • Yellen faced bipartisan lawmaker pressure to toughen sanctions. Treasury Secretary Janet Yellen on Wednesday was pushed by legislators from both sides of the aisle to bolster moves to cut off financial links with Russia and was queried on the Biden administration’s readiness to impose sanctions against China in the event it launched aggression toward Taiwan. She responded somewhat positively to a proposal from Rep. Andy Barr (R-Ky.) to create an escrow account for proceeds from Russian oil and gas sales. Yellen called it “worth exploring” as the U.S. seeks ways to tighten sanctions.
  • The U.S. will boycott G20 meetings in Bali later this year that include Russia, according to Treasury Secretary Janet Yellen. Last month President Biden called for Russia’s expulsion from the club, and Russia’s ambassador to Indonesia said Russian leader Vladimir Putin planned to attend.
  • Biden’s top economic adviser said the administration has warned India against aligning itself with Russia, and that U.S. officials have been “disappointed” with some of New Delhi’s reaction to the Ukraine war. “There are certainly areas where we have been disappointed by both China and India’s decisions, in the context of the invasion,” White House National Economic Council, Brian Deese told reporters. The U.S. has told India the consequences of a “more explicit strategic alignment” with Moscow would be “significant and long-term,” Deese said. Besides seeking Russian oil, India is the world’s largest buyer of Russian weapons. Indian Prime Minister Narendra Modi has resisted entreaties from the U.S. and Australia to scale back the relationship, insisting that India needs Russian weapons to counter both Pakistan and China and that alternatives are too expensive.

 

  • A small number of Ukrainian troops are being trained in the U.S., according to the Pentagon. The soldiers, who were already in America before the war started, are learning to operate Switchblade drones, remote-controlled flying bombs provided to Ukraine as part of a $1.7 billion military-assistance package. Ahead of a meeting between NATO’s foreign ministers today, Ukraine called on the alliance to supply it with even more weapons.
  • Shell said it expects to book accounting charges of up to $5 billion in the first quarter related to its decision to exit its joint ventures with Russian energy giant Gazprom.
  • European officials traveling to Ukraine. European Commission President Ursula von der Leyen and EU foreign policy chief Josep Borrell travel to Ukraine today alongside Slovak Prime Minister Eduard Heger, the highest profile delegation to visit the war-torn country since Russia’s invasion.


— Market impacts:

  • USAID: War in Ukraine may trigger severe world food crisis. The Biden administration is preparing to tap an emergency food aid fund because of the effects of the Russian invasion of Ukraine on hunger in Africa and the Middle East, a U.S. Agency for International Development (USAID) official told lawmakers on Wednesday. Hunger and poverty could exceed the global food price crisis of 2007-08, said Sarah Charles of USAID. Up to 47 million people could face acute hunger if the war is prolonged, with sub-Saharan Africa the most affected area, said Arif Husain, chief economist for the World Food Program (WFP). “This means that up to 323 million people could become acutely food insecure in 2022. The world does not need another crisis in the current context that is already beset by extreme difficulties.” USDA “stands ready to step up” in support of Ukraine and global food supplies, said Daniel Whitley, administrator of the Foreign Agricultural Service, which oversees food aid. “As the situation continues to unfold in Eastern Europe, it is clear that maintaining trading relationships globally will help benefit all nations at a time that food security is in question for many. Trading means sharing.” To tap the Emerson Trust, USAID would request USDA to release funding. Three dozen U.S. representatives, including House Agriculture chairman David Scott and Rep. Sanford Bishop, chairman of the House Appropriations subcommittee in charge of USDA funding, wrote to USDA and USAID two weeks ago, urging use of the money.
  • Russia’s invasion of Ukraine has sparked a global shortage of sunflower oil that has in turn pushed prices of other edible oils to record highs, hitting food makers and consumers already grappling with inflation, the Wall Street Journal reports (link). Ukraine is a major producer of sunflower oil, but shipments of sunflower oil — and seeds used by crushers elsewhere — have ground to a halt amid the war, disrupting supplies of a commodity widely used for cooking and as an ingredient in everyday products like margarine, mayonnaise and bread. The shortage of Ukrainian sunflower oil has triggered a domino effect, pushing up the price of other oils produced elsewhere, including those not ordinarily considered substitutes.

    Global oilseeds
  • The European Union is taking its first steps to reduce Russian energy imports. EU member states on Wednesday backed Brussels’ latest proposal to ban Russian coal. But the EU hasn't agreed to sanction oil and natural gas. Since Russia's invasion of Ukraine, the bloc’s 27 member states had made energy payments worth around 35 billion euros, equivalent to about $38 billion, to Russia, EU foreign-policy chief Josep Borrell said Wednesday. EU officials and some member countries are urging steps to slash oil imports from Russia, but those proposals continue to face resistance from Germany and some other countries.

    EU petroleum imports
  • Many tons of Russian fish have slipped into the U.S. despite the government's ban on imports of Russian fish and seafood products, experts say, because complex supply chains that route through China often mask the Russian origin of the seafood. Link to details via the WSJ.

 

POLICY UPDATE

— Canada offers farmers more up-front cash support to offset costs. Canada’s federal government is increasing up-front cash support in a farming payments program as fuel and fertilizer shortages plague the 2022 planting season. The government will temporarily waive the requirement for pre-production advances to be issued in two installments, Agriculture and Agri-Food Canada said in a Wednesday statement. The change to the Advance Payments Program allows producers to get 100% of their 2022 advance immediately when they apply. Advances were previously issued in two installments, with 60% up-front and 40% after seeding was confirmed. The program offers farmers cash advances of up to C$1 million ($800,000) depending on the expected value of their agricultural product when they apply, of which the first C$100,000 in each crop year is interest-free. “Canada’s agricultural producers are facing an increase in the cost of raw materials, including fuel and fertilizer, a situation exacerbated by Russia’s invasion of Ukraine,” Agriculture Minister Marie-Claude Bibeau said in a statement. “This temporary change to the Advance Payments Program comes in time for the planting season and will help farmers purchase the inputs needed for sustainable food production,” Bibeau said. The program provided C$2.39 billion in advances to 17,430 producers across Canada in 2021.

— Covid aid bill stalled. The $10 billion in emergency pandemic response money is stalled in the Senate because of objections by Republicans and a few Democrats to the Biden administration’s impending opening of the U.S./Mexico border to asylum-seekers. Sen. John Thune (R-S.D.), the chamber’s second-ranking Republican, said that the Covid bill will be stalled at least until the Senate returns to Washington at the end of April as its two-week recess starts Friday.

— USDA extends suspension of past-due debt collections, foreclosures on FSFL loans. USDA has temporarily extended its past-due debt collections and foreclosures on Farm Storage Facility Loans (FSFL), saying the action is in place until further notice. FSA in October 2021 suspended those activities on FSFLs and continues that with this week's notice.

 

PERSONNEL

— Biden taps FMCSA chief. President Joe Biden tapped Robin Hutcheson to lead the agency that oversees regulation of the trucking industry. The Transportation Department in January announced Hutcheson would serve as deputy and acting administrator of the Federal Motor Carrier Safety Administration; Hutcheson was previously director of public works for Minneapolis. Biden’s previous nominee for the role, Meera Joshi, left for another job after her nomination stalled for months in the Senate.

— Biden taps Lizarraga, Uyeda for SEC commissioners. President Biden nominated Jaime Lizarraga and Mark Uyeda to be commissioners for the U.S. Securities and Exchange Commission, according to a release from the White House.

— Biden nominates Logan for FCA. President Biden nominated lawyer and investment adviser Vincent Logan, a member of the Osage Nation, to serve on the board of the Farm Credit Administration, the regulator of the farm credit system

 

CHINA UPDATE

— Top Chinese state-owned refiners shun buying new Russian oil: Reuters. Sinopec, Sinochem and CNOOC — three of China's top four state-owned oil refiners — declined to buy new, discounted Russian oil for May loadings over reputational and sanctions concerns, Reuters reported April 6. The three companies are honoring existing contracts for Russian oil, but they will probably refrain from entering new contracts in the near term, prioritizing compliance and risk control over profit margins despite high prices. These moves highlight that while China will support Russia against NATO and the West rhetorically, Beijing will not jeopardize its economic ties to the West by helping Russia circumvent sanctions.

— Shanghai adds 19,982 Covid-19 cases on sixth day of record numbers. Shanghai has reported 114,000 cases since the latest wave of outbreaks started on March 1, racking up more cases in a month than the previous two years combined.

— Tempered U.S. ag export sales activity to China. Data from USDA’s weekly Export Sales report for the week ended March 31 showed several small cancellations but additional old-crop soybean sales. Activity for 2021-22 included cancellations of 17,348 tonnes of corn, net reductions of 10,537 tonnes of sorghum, net sales of 435,665 tonnes of soybeans, and net reductions of 23,883 running bales of upland cotton. No sales for 2022-23 were reported. For 2022, net reductions of 23 tonnes of beef and net sales of 12,994 tonnes of pork were reported.

 

ENERGY & CLIMATE CHANGE

— EPA is weighing its options for allowing a fuel blend that is 15% ethanol, known as E15, to be more widely available in a bid to help consumers grappling with high gasoline prices, agency head Michael Regan told the Senate Environment and Public Works Committee on Wednesday. E15 currently can’t be sold in conventional markets between June 1 and Sept. 15. Regan said E15 can provide a less expensive option for consumers. “We are currently evaluating what flexibilities we have around E15,” Regan said. “This is a conversation that I and (USDA) Secretary (Tom) Vilsack have been having quite a bit as of late, so I can tell you that we are evaluating what Clean Air Act authorities we have.”

     A bipartisan group of 29 lawmakers recently asked the White House to ease biofuel regulations, saying the changes would significantly increase U.S. energy independence, lower prices at the pump and ensure the continued success of sanctions on the Russian economy. “I do believe E15 can provide a less expensive option based on the data we have seen of late,” Regan told the committee.

     “Whether it’s E15 or RVOs, we need to have a comprehensive approach to alleviating our dependence on oil,” Regan said, referencing the annual Renewable Volume Obligation (RVO) setting the amount of ethanol to be blended with gasoline. Regan also said he believes the agency is “finally on a path to stabilize the (RFS) program” as it develops the RVOs for fiscal 2023 and beyond.

     Regarding the definition of waters of the U.S. (WOTUS) in the Clean Water Act, Regan said the agency would be gathering input from a series of regional roundtables. The agency has proposed returning to pre-2015 CWA regulations as it works to craft a new, more permanent rule. In February, EPA announced there would be 10 regional roundtables this spring and summer, but it has yet to set the dates and locations. Regan said the agency, which is working on WOTUS with the Army Corps of Engineers, is “still on a path to produce some certainty while we see what plays out in the Supreme Court.”

     Regan also said EPA will have a new standard to limit carbon emissions “ready to go as soon as the Supreme Court rules” on its authority to regulate in that space. Regan had previously promised tools to deal with emissions from power plants. The case centers on the scope of EPA’s authority to regulate greenhouse gas emissions, provided it considers cost, non-air impacts, and energy requirements. Regan also EPA will propose by 2023 the next phase of standards for greenhouse gas emissions from model year 2027 passenger cars and light trucks.

— EPA to decide on dozens of refinery biofuel waivers. Facing a court deadline, the Environmental Protection Agency today is set to decide the fate of roughly three dozen refineries’ exemptions from 2018 biofuel-blending requirements. The agency is expected to reject as many as 36 refinery requests for waivers from those 2018 quotas, including 31 that were previously granted, according to reports. At issue is the EPA’s approach to 2018 waivers, which was challenged by biofuel advocates. But in December, at the EPA’s request, the U.S. Court of Appeals for the District of Columbia Circuit sent the matter back to the agency for further review. The court gave the EPA 120 days to issue new decisions, with the deadline looming today.

     Refining advocates have been warning the Biden administration that if previously granted exemptions are reversed and refineries are required to cover those 2018 obligations, it could roil a market for biofuel compliance credits known as renewable identification numbers, or RINs. They cautioned that a reversal could lead to greater demand for RINs and potentially higher gasoline costs, undermining the Biden administration’s efforts to lower prices at the pump.

     But biofuel supporters argued that the 2018 exemptions from Renewable Fuel Standard mandates, covering RINs representing some 1.43 billion gallons, were improperly granted and should be reversed.

     EPA has proposed denying dozens of pending refinery petitions for exemptions from other years.

— Biden’s fuel rules leave space for gas guzzlers. The fuel-economy regulations the Biden administration rolled out last week are intended to spur faster development of electric cars, but they rely on a credit program that some environmentalists say undercuts the program’s pollution-fighting purpose. The system allows carmakers to claim an equivalent of over 100 miles a gallon for each EV in their lineup, potentially allowing them to meet the 49 mpg fleetwide mandate by 2026 even if the rest of the lineup is crowded with conventional gas guzzlers and SUVs.

 

LIVESTOCK, FOOD & BEVERAGE INDUSTRY

— USDA grants $203,752 to Univ. of Nebraska-Lincoln for meatpacking industry study. A professor at the University of Nebraska-Lincoln (UNL) received funding from USDA to study various factors that have affected the meat supply chain since the Covid-19 pandemic began. Azzeddine Azzam at UNL received the USDA funding via the National Institute of Food and Agriculture to study industry conduct during the Covid-19 plant shutdowns and evaluate the economic developments from expanding local meat processing through the start of small packing operations. “When we add more regional or local capacity to the industry, either through opening new plants or expanding the capacity of existing plants, that is going to restructure the industry,” Azzam said. “The questions that I will address are: Will the restructuring make the industry more resilient to capacity disruptions in the event of another pandemic? What are the short-term and long-term consequences for the cattle feeding industry?”

     “The issue of market power exerted by packers is nothing new,” Azzam said. “It’s been around since the 1800s, and the industry has gone through cycles, and now we’re at the point where the industry is again highly concentrated. And so, the question is: What’s the result of that concentration? Are producers worse off, or are they better off?” Azzam added that economists traditionally focused on the tradeoffs in potential market power and the efficiencies achieved by big packers having larger plants. He said the pandemic added resilience as a third aspect.  “When we add more regional or local capacity to the industry, either through opening new plants or expanding the capacity of existing plants, that is going to restructure the industry,” Azzam said. “The questions that I will address are: Will the restructuring make the industry more resilient to capacity disruptions in the event of another pandemic? What are the short-term and long-term consequences for the cattle feeding industry?”

     UNL in March revealed plans to build the Small Plant of the Future on its campus to serve as a regional processing hub for local cattle producers and a prototype for smaller facilities.

— USDA data signals 95 commercial flocks confirmed with HPAI. USDA’s Animal and Plant Health Inspection Service (APHIS) late Wednesday resumed publication of data on the level of highly pathogenic avian influenza (HPAI) in the U.S. There are now 95 commercial flocks in 14 states that are confirmed with HPAI while two flocks are pending. The data indicate that more than 23.7 million birds have been depopulated, with the biggest portion being more than 17.9 million from 11 flocks that lay table eggs.

 

CORONAVIRUS UPDATE

Summary: Global cases of Covid-19 are at 495,181,447 with 6,166,970 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 80,249,038 with 983,817 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 563,391,773 doses administered, 218,043,500 have been fully vaccinated, or 66.42% of the U.S. population.

— A top U.S. health regulator said that asking people to frequently get Covid-19 boosters wasn’t sustainable because of vaccine fatigue and that authorities needed to develop a long-term strategy for protecting the public from the virus as it evolves.

 

CONGRESS

Ketanji Brown Jackson will be confirmed this afternoon and will become the first Black woman confirmed as a Supreme Court justice. Senate Majority Leader Chuck Schumer (D-N.Y. announced that he expected the vote to take place at around 1:45 p.m. ET today. Jackson will replace the retiring Justice Stephen Breyer, who she clerked for back in 1999-2000.

— Appropriations leaders to meet after congressional recess. Senate Appropriations Committee Ranking Member Richard Shelby (R-Ala.) said that the “four corners” of Appropriations panel leaders in the House and Senate will now not meet until after the two-week recess that starts at the end of this week. House Appropriations Committee Chair Rosa DeLauro (D-Ct.) said early this week the leaders would meet this week, but a busy Senate calendar appears to have pushed that back. Shelby said that Senate Appropriations Committee Chair Pat Leahy (D-Vt.)  told him the first meeting on fiscal year (FY) 2023 appropriations would not come until after the recess. This is likely the first of many such delays in the appropriations process, a usual situation for Congress.

 

OTHER ITEMS OF NOTE

Canada was reported to be barring foreign nationals from buying residential properties for the next two years, in the hopes of reining in a runaway market.

— EU plans trade tariffs on countries that block return of failed asylum seekers. Brussels is proposing to levy punitive trade tariffs on countries that do not accept the return of citizens who have illegally entered Europe, as the bloc steps up efforts to toughen its migration policy. The move by the European Commission follows an increase in anti-immigrant feeling in many EU countries, which has led to rising support for populist politicians. The EU grants tariff free access to imports from almost 70 developing countries to boost their economies. But in a review of the scheme, first tabled in September, the Commission has asked for the power to revoke this privilege, known as the General System of Preferences (GSP), from countries that refuse to accept citizens deported by the EU. Some members of the European parliament condemned the proposal which will hit developing countries’ economies by making their exports more expensive.

— SCOTUS reinstates Trump WOTUS rule. The U.S. Supreme Court on Wednesday temporarily reinstated a Clean Water Act rule issued by former President Donald Trump’s administration that prevented states from vetoing projects that would pollute streams and wetlands. The stay on the lower court’s ruling tossing out the Trump-era water rule will expire if the high court decides not to take the case.


 

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