NPPC Issues Report on Pork Prices
Corn tops $6 in overnight trading | Last week’s winds labeled derecho event
In Today’s Digital Newspaper
Market Focus:
• Biden to host meeting to discuss global supply chain bottlenecks and pandemic
• Current account deficit grows sharply in third quarter
• U.S. population grows at slowest rate since nation's founding
• U.S. life expectancy fell more than initially thought last year
• Lower GDP estimate for Britain
• Kellogg’s 11-week strike will end after workers agree to a new contract
• Why U.S. workers are quitting
• Did pandemic unemployment benefits reduce employment?
• Booming U.S. economy looks like main driver of global supply chain logjams: WSJ
• Latest product hit hard by supply-chain shortages: pet food
• Lira stages partial rebound
• Cryptocurrency focus of SEC
• Gas prices in Europe soared to a record high on Tuesday
• Storms and tornadoes that ripped through north-central U.S. last week were a derecho
• Corn tops $6 overnight; Soybean futures extended Tuesday’s strong rally overnight
• NDRC official: China can keep economic growth stable
• NPCC issues report on pork prices
• Cold Storage Report out this afternoon
• Cash cattle trade starts at lower prices
• Hog futures outpacing rising cash prices
Policy Focus:
• Biden insists he and Manchin will ‘get something done’ on BBB
• GOP Sen. Collins signal compromise on separate child tax credit measure
• Manchin facing calls from group close to him to reconsider opposition to BBB: coal miners
• EPA reviewing dicamba use on soybeans and cotton
China Update:
• NDRC official: China can keep economic growth stable
Trade Policy:
• Canada to challenge U.S. duties on Canadian softwood lumber via USMCA
Energy & Climate Change:
• DOE establishes office for clean energy projects with $20 billion in BIF funding
Livestock, Food & Beverage Industry Update:
• NPCC issues report on pork prices
• USDA keeps upwardly adjusting forecasts for food price categories but not overall forecasts
Coronavirus Update:
• FDA could today authorize a pair of pills from Pfizer and Merck to treat Covid-19
• Super vaccine effective against all Covid variants, including Omicron, created by Army
• Israeli gov’t plans to offer a fourth dose of a Covid-19 vaccine to people over 60
• Delta Air Lines asks CDC to halve its current 10-day recommended
• Americans finding it’s hard and time consuming to find Covid-19 tests
• Biden team plans 4 million doses of Covid treatments
• Covid and U.S. sports
• U.K. PM rules out stricter rules before Christmas
• Europe unveils new support to Covid-stricken businesses
Politics & Elections:
• Sen. Thune seriously considering retiring after next year: NYT
• Robert Menendez Jr. wins backing from key Democrats New Jersey congressional district
• Glenn Youngkin taps longtime Virginia exec as commerce and trade secretary
Congress:
• Senate returns on Jan. 3. House isn’t back until Jan. 10
Other Items of Note:
• Putin: Russia will consider military action threatened by Western countries over Ukraine
• Student-loan payments extension mulled
• FDA ag water meetings set for February
MARKET FOCUS
Equities today: Global stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward mixed openings. Asian equities finished mostly higher, as they continue to regain ground following sharp declines at the start of the week. The Nikkei gained 44.62 points, 0.16%, at 28,562.21. The Hang Seng Index rose 131.00 points, 0.57%, at 23,102.33. European equity markets are also mostly higher in early trading. The Stoxx 600 was up 0.2% while most regional markets were seeing gains of 0.1% to 0.4%. However, Swiss and Italian shares were lower.
U.S. equities yesterday: The Dow rose 560.54 points, 1.60%, at 35,492.70. The Nasdaq gained 360.14 points, 2.40%, at 15,341.09. The S&P 500 was up 81.21 points, 1.78%, at 4,649.23.
On tap today:
• U.S. gross domestic product is expected to grow at an annual pace of 2.1% in the third quarter, unrevised from an earlier estimate. (8:30 a.m. ET)
• Conference Board's consumer confidence index is expected to rise to 111 in December from 109.5 one month earlier. (10 a.m. ET)
• U.S. existing home sales are expected to increase to an annual pace of 6.5 million in November from 6.34 million one month earlier. (10 a.m. ET)
• President Biden will host a meeting at 10:30 a.m. ET at the White House with members of his Cabinet and the private sector to discuss global supply chain bottlenecks and the pandemic.
Current account deficit grows sharply in third quarter. The Commerce Department reported Tuesday that the U.S. current account deficit grew 8.3% in the third quarter to come in at $214.8 billion, or about 3.7% of gross domestic product. Economists had expected the deficit to grow to $204.8 billion. The increase in the deficit was driven by a lower surplus in services, which have been hard-hit by coronavirus pandemic restrictions. The goods deficit was larger in the third quarter as well.
— U.S. population grows at slowest rate since nation's founding. America’s population grew 0.1% this year, the lowest rate on record, according to Census Bureau figures that show how the pandemic is changing the country’s demographic contours. The U.S. added just 393,000 people in the year that ended July 1 for a total population of 331.9 million. Population growth had averaged more than 2 million a year over the last decade, though it had been slowing even before the pandemic. Birthrates have fallen steadily since the 2007-2009 recession. Death rates had edged up, especially in states hit hardest by the opioid epidemic. And immigration dropped in recent years under policies set by the Trump administration. Covid exacerbated the situation.
— U.S. life expectancy fell more than initially thought last year. Final data from the Centers for Disease Control and Prevention show that Americans’ life expectancy fell 1.8 years to 77 years in 2020, the biggest such decline since at least World War II. Covid-19 was the nation’s third leading cause of death last year, behind heart disease and cancer. Increases in mortality from unintentional injuries — which include drug overdoses — as well heart disease, homicide and diabetes also decreased life expectancy.
Lower GDP estimate for Britain. Britain’s Office for National Statistics (ONS) revised its initial GDP estimate for the quarter ending in September down by 0.2 percentage points to 1.1% (vs the previous quarter). The ONS reckons GDP is 1.5% lower than at the end of 2019, as the country’s economic recovery from the pandemic lags behind that of America, the eurozone and China.
Kellogg’s 11-week strike will end after workers agree to a new contract. Workers at four Kellogg plants have ratified a contract offer worked out between Kellogg and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. The 1,400 workers at cereal plants in Michigan, Nebraska, Pennsylvania and Tennessee went on strike Oct. 5 but ratified the contract worked out last week. Kellogg said the new contract “furthers our employees’ leading wages and benefits, with immediate across-the-board wage increases and benefits for all.” Absent from the contract approved is a two-tier benefits system that paid workers hired after 2015 at a lower wage scale than “legacy” workers. The union said the new contract has “no permanent two-tiered system” and there is a pledge that no plants will be closed through October 2026. Workers will return to work on Monday (Dec. 27).
New contract: The collective bargaining agreement provides staff with cost-of-living adjustments and a $1.10 per hour raise. Additionally, it allows all workers with four years of experience to move up to a higher legacy pay level. New employees will also get a new dental benefit, while all employees will get a new vision benefit offering. The contract impacts about 1,400 workers at four cereal plants who protested their pay, and rejected a previous deal between management and their union. The strike drew the attention of President Biden and other national policymakers.
Why U.S. workers are quitting. American workers are burned out, and bosses are struggling to respond, the Wall Street Journal reports (link). In the first 10 months of this year, America’s workers handed in nearly 39 million resignations, the highest number since tracking began in 2000. Some want better jobs. Others, a better work-life balance. Still others want a complete break from the corporate grind. Almost two years into the pandemic that left millions doing their jobs from home, many Americans are rethinking their relationship with work. In response, some employers are experimenting with new ways of working, including four-day workweeks and asynchronous schedules that allow people to set their own hours, the WSJ report concludes.
— Did pandemic unemployment benefits reduce employment? Eighteen states opted out of enhanced programs several months early—in June 2021. Georgetown's Harry Holzer, Columbia's Glenn Hubbard and the American Enterprise Institute's Michael Strain in a working paper (link) estimate that "the national unemployment rate in each of July and August would have been around 0.3 percentage point lower than they were, and the employment-population ratio would have been around 0.1-0.2 percentage point higher than it was, had all states ended" the pandemic programs in June.
Booming U.S. economy increasingly looks like the main driver of global supply chain logjams. The force of the American expansion has manufacturers struggling to keep up and is pushing up prices around the world, the Wall Street Journal reports (link), and is inducing overseas companies to invest in the U.S., betting that growth is still accelerating and will outpace other major economies. The impact is evident in freight operations. Major U.S. ports are processing almost one-fifth more container volume this year than they did in 2019, while volumes at major European ports like Hamburg and Rotterdam are roughly flat or lag behind 2019 levels. Businesses are pouring money into the U.S., looking to gain from a potential sustainable increase in demand. Some are bringing production closer to American consumers, as they seek to avoid supply shocks with steps that may reshape global supply chains.
Inflation watch: The latest product hit hard by supply-chain shortages: pet food. Link to WSJ item. Meanwhile, the $1 pizza slice is no more. Blame inflation. Link to NYT for details.
Market perspectives:
• Outside markets: The U.S. dollar index is weaker amid strength in the euro, yen, and British pound versus the greenback. The yield on the 10-year U.S. Treasury note was higher to trade around 1.48% with a mixed-to-higher tone in global government bond yields. Gold and silver futures are up, with gold around $1,791 per troy ounce and silver around $22.66 per troy ounce.
• Lira stages partial rebound. Turkey’s currency mounted a dramatic, partial reversal from a monthslong collapse on Tuesday after President Recep Tayyip Erdogan announced a rescue plan to encourage Turks to put their money back into the lira. Erdogan said the gov’t would guarantee returns on lira deposits at a rate similar to those on foreign currency, making up for any further depreciation in the lira. The Finance Ministry released details of the policy Tuesday. The move generated an instant, powerful burst of demand for the lira.
• Cryptocurrency focus of SEC. Securities and Exchange Commission (SEC) Chair Gary Gensler has brought on a leading Senate staff member to focus on federal cryptocurrency policy. Corey Frayer, who worked as an aide to Senate Banking Chairman Sherrod Brown (D-Ohio), has started at the SEC this month, Bloomberg reports. He’s expected to play a key role as Gensler works to police the burgeoning industry, said the people, who asked not to be named because the hire hasn’t been announced. The appointment is already causing consternation at crypto firms.
• Crude oil futures were mixed ahead of U.S. trading, with U.S. crude trading around $71.15 per barrel while Brent was trading around $73.90 per barrel. Crude oil firmed in Asian trade, with U.S. crude up 18 cents at $71.30 per barrel and Brent up 3 cents at $74.00 per barrel.
• Gas prices in Europe soared to a record high on Tuesday after flows from a pipeline carrying Russian gas to Germany stopped. Some analysts have accused Russia of deliberately withholding gas supply amid its conflict with Ukraine. The Russian government denied any such connection and said, “this is a purely commercial situation.” The energy crunch in Europe, supply disruptions in Libya and little or no progress on the Iran talks all point to higher crude prices, analysts signal.
• Storms and tornadoes that ripped through north-central U.S. last week were a derecho. The storm system that lashed the Plains and Midwest with thunderstorms and tornadoes last week was a serial derecho, the first ever recorded in December, said the National Weather Service. Link to Los Angeles Times item.
• NWS weather: Active weather with heavy mountain snow and lower elevation rain will engulf much of the western U.S. during the next couple of days... ...Periods of snow over the Great Lakes as wintry weather over central and northern New England today gives way to cold and blustery conditions tonight... ...Persistent warm and dry conditions over the central U.S. with fire danger over the Front Range.
Items in Pro Farmer's First Thing Today include:
• Corn tops $6 overnight; Soybean futures extended Tuesday’s strong rally overnight
• NDRC official: China can keep economic growth stable
• NPCC issues report on pork prices
• Cold Storage Report out this afternoon
• Cash cattle trade starts at lower prices
• Hog futures outpacing rising cash prices
POLICY FOCUS
— President Biden insisted yesterday that he and centrist Sen. Joe Manchin (D-W.Va.) will "get something done" on the Build Back Better (BBB) plan after Manchin announced Sunday that he could not support the economic and climate bill that requires his support to pass in the Senate. Senate Democrats held a virtual meeting Tuesday evening and Senate Majority Leader Chuck Schumer (D-N.Y.) reiterated that there will be a vote on a revised version of the BBB in January. Manchin was on the call. “This evening, Sen. Manchin had an honest conversation with his colleagues for whom he has a great deal of respect,” said Samantha Runyon, communications director for the West Virginia Democrat. Manchin presented the White House with a new proposal that includes much of what Biden wants, except for a one-year extension of a child tax credit.
Biden pointed out that Goldman Sachs lowered estimates for the growth of the U.S. economy next year after Manchin’s announcement, and the president again described the legislation as a tool to combat rising inflation.
Meanwhile, Sen. Susan Collins (R-Maine) said on Tuesday she is open to discussing proposals to overhaul an expanded child tax credit included in President Biden’s American Rescue Plan that is set to expire in the next few days, The Hill reports (link). Earlier this month, Collins indicated that she was open to finding a way to maintain the tax credit with some changes made to it.”
Bottom line, according to a congressional observer: “Biden will keep working to get something. Manchin will insist it be bipartisan and run through committees. Uncertain if that can produce something. If it does it will likely be narrow. Whether that can even be described as BBB is a question mark.”
— Manchin is facing calls from a group close to him to reconsider his opposition to the BBB: coal miners. America's largest coal mining union put out a statement this week lauding the legislation's provisions and pushing Manchin to take a do-over. The union pointed to several items in the plan that it believes are crucial to its members and communities, including tax incentives to encourage manufacturers to build facilities in coalfields, employing thousands of coal miners who are out of work.
— EPA reviewing dicamba use on soybeans and cotton. EPA is currently evaluating the use of the herbicide dicamba and whether it can be sprayed on GMO cotton and soybean plants with resistance to the chemical. EPA said it has received around 3,500 reports in 2021 that more than 1 million acres of soybeans that were not dicamba-tolerant had been damaged from chemical drift of the herbicide. EPA noted the level of impacts and areas where the events took place are similar to last year even though there were tighter use restrictions on dicamba for the 2021 growing season. “EPA is reviewing whether over-the-top dicamba can be used in a manner that does not pose unreasonable risks to non-target crops and other plants, or to listed species and their designated critical habitats,” the agency said. “EPA is also evaluating all of its options for addressing future dicamba-related incidents.” EPA also said they believe that there has been “widespread underreporting of dicamba-related incidents” in 2021. “Through meetings, letters, and media reports, EPA has received input from stakeholders that is consistent with the finding that dicamba-related incidents are underreported to state lead agencies,” EPA said.
Relative to 2022, EPA said that if a state wants to further restrict or narrow over-the-top uses of dicamba, EPA will “work with them to support their goals.” And the agency also said based on the incident reports from the 2021 growing season, they are “unlikely” to approve any requests for additional uses of federally registered over-the-top dicamba products to meet special local needs.
Reaction: Three large U.S. farm groups questioned whether the EPA had double-counted complaints and whether anyone had investigated damage reports to verify the cause. “The stakes are simply too high to make major label changes without due diligence from EPA to learn all the facts surrounding reported incidents,” said Zippy Duvall, president of the American Farm Bureau Federation.
Bottom line: EPA said it was reviewing whether dicamba “can be used in a manner that does not pose unreasonable risks” and said it would help states that wish to restrict use of the herbicide.
Link to an EPA question-and-answer sheet on dicamba regulation.
Link to the 73-page EPA memorandum on 2021 dicamba use, incidents, and stakeholder-suggested mitigations.
Link to an EPA chronology of recent decisions on dicamba.
CHINA UPDATE
— NDRC official: China can keep economic growth stable. China can keep economic growth at a reasonable level in 2022 a senior official with state planner National Development and Reform Commission (NDRC) told Xinhua News. Beijing will step up government spending, strengthen support to manufacturers and small companies and ensure price stability. It will also work to stabilize industry supply chains, focus on solving chip shortage issues and step up monitoring of commodity prices. To aid economic growth, Beijing will continue to implement proactive fiscal policies, step up efforts to build an integral domestic market, while further shortening the “negative list” used to ban or limit foreign investment in some industries, such as telecoms or resources. China will also combine cross-cyclical and counter-cyclical measures to prevent wild economic volatility, the official said.
TRADE POLICY
— Canada to challenge U.S. duties on Canadian softwood lumber via USMCA. Canada announced it will issue a challenge relative to the final results of the U.S. Dept. of Commerce (DOC) review of anti-dumping and countervailing duty (CVD), which Canadian Minister of International Trade, Export Promotion, Small Business and Economic Development Mary Ng labeled as “unjustified.”
Canada will be filing the challenge via Chapter 10 of the U.S.-Mexico-Canada Agreement (USMCA). “Rulings on this issue have consistently found Canada to be a fair trading partner, and Canada is confident that rulings will continue to find Canada to be one,” Ng said in a statement. “Filing these notices is another step that Canada is taking to defend the forestry sector and Canada’s national interests.”
The U.S. doubled the duties on most Canadian softwood lumber producers to 17.9% on Nov. 24.
“Canada reaffirms its call for the United States to stop imposing unwarranted duties on Canadian softwood lumber products,” Ng said. Canada would like to reach a negotiated settlement on the issue, Ng noted, adding that such an outcome would be aimed at providing “predictable cross-border trade in softwood lumber.” She also stated Canada will “always defend its softwood lumber industry.”
The challenge means that binational panels will be established to determine whether the duty rates imposed are consistent with U.S. law. Under USMCA, there is a finite period for disputes to be handled which means the issue will conclude. But that may still not provide a satisfactory resolution to what has been a years-long dispute between the two countries. The U.S. has also filed a challenge on Canada’s operation of their dairy import quotas and Canada has threatened to challenge potential electric vehicle tax credits that are part of the Build Back Better package that would provide incentives for consumers to purchase EVs made in the U.S. by union workers.
ENERGY & CLIMATE CHANGE
— DOE establishes office for clean energy projects with $20 billion in BIF funding. The Department of Energy (DOE) announced the establishment of the Office of Clean Energy Demonstrations Tuesday (Dec. 21), with $20 billion in funding from the recently enacted bipartisan infrastructure package (BIF). The office will support clean energy technology demonstration projects in areas including clean hydrogen, carbon capture, grid-scale energy storage and small modular reactors (SMRs). The projects aim to prove the effectiveness of new technologies at scale to help move them towards widespread adoption and deployment. DOE said the office will help expand the department’s efforts to close a “critical innovation gap” to help meet President Biden’s goal of reaching net-zero U.S. greenhouse gas (GHG) emissions by 2050.
LIVESTOCK, FOOD & BEVERAGE INDUSTRY
— NPCC issues report on pork prices. In a report released Tuesday on retail pork prices, economists with Iowa State University, North Carolina State University and the National Pork Producers Council (NPPC) found that pork prices, not industry profits, are rising. Prices are rising due to increased transportation costs, supply bottlenecks and delays and increased labor costs throughout the pork chain, the report said. Those factors were either caused or exacerbated by the Covid-19 pandemic, Iowa State’s Dermot Hayes, N.C. State’s Barry Goodwin and NPPC’s Holly Cook said. Link to report.
— USDA keeps upwardly adjusting forecasts for food price categories but not overall forecasts. First, some highlights of USDA’s food price update:
- Prices for meats, poultry and fish continue to see upward revisions for 2021.
- Overall food price inflation forecasts for 2021, 2022 are held steady.
- Levels for 2021 meats, poultry and fish food price inflation are up considerably from year-ago forecasts.
Overall food price inflation forecasts held steady with month ago. USDA continues to increase forecasts for food price inflation for various grocery store items for 2021, but so far has not altered their outlook for all foods, grocery store and restaurant prices for 2021 or 2022.
For all food prices in 2021, USDA expects the increase to be from 3% to 4%, a level of food price inflation that they have forecast since August. For grocery store prices, USDA expects them to rise 2.5% to 3.5% from 2020, an outlook which has not changed since August. For restaurant prices, USDA expects them to increase 4% to 5%, the same for both November and December forecasts.
For 2022, USDA still expects higher prices for consumers compared with 2021, but the rate of increase is seen easing. For all food prices, they are seen up 2% to 3% in 2022 from 2021 levels, while grocery store prices are expected to rise 1.5% to 2.5% versus 2021 and restaurant prices are looked to increase 3% to 4%. All of these forecast levels for 2022 are steady with the marks USDA has forecast since July.
The food-at-home (grocery store or supermarket) CPI increased 0.3% from October 2021 to November 2021 and was 6.4% higher than November 2020. In 2021 thus far compared with 2020, grocery store prices have increased 3.1% percent and restaurant prices have increased 4.2%. The CPI for all food has increased an average of 3.6%. Upward shifts continue in several meat categories. For 2021, USDA now looks for meat, poultry and fish prices combined to rise 6% to 7% compared with 2020, marking the eighth month in a row USDA has raised this forecast level. At this point in 2020, USDA expected meat, poultry and fish prices to be down 0.5% to up 0.5%.
For 2022, USDA sees meat, poultry and fish prices rising 2% to 3%. Within that category, USDA expects prices for meats at the grocery store will have increased 7% to 8% in 2021 compared with 2020. Similarly, this is the eighth monthly increase in forecast meat prices which stood at a forecast level of down 1.5% to up 1.5% in December 2020.
Beef and veal prices in 2021 are now expected to have risen 9% to 10% compared with 2020, a tenth straight monthly increase. In December 2020, USDA expected beef and veal prices to fall from 2.5% to 1.5%.
Pork prices are forecast to have increased 8% to 9% in 2021 compared with 2020, a ninth straight monthly increase. In December 2020, USDA expected pork prices to be down 0.5% to up 0.5%.
For 2022, grocery store prices for meats, beef and veal and pork are expected to increase 2% to 3%.
Poultry prices in 2021 are looked to have risen 4.5% to 5.5% from 2020 levels, the third straight monthly increase. In December 2020, USDA expected 2021 poultry prices to be steady—down 0.5% to up 0.5%.
For 2022, poultry prices are forecast to increase 1% to 2%.
Prices for fish and seafood in 2021 are looked to have increased 4.5% to 5.5% versus 2020, up from the November forecast which was steady with the increase forecast in October. In December 2020, USDA expected 2021 fish and seafood prices to increase 1.5% to 2.5%.
For 2022, fish and seafood prices are seen rising 1% to 2%.
USDA’s explanation for the higher prices for meats has not changed compared with their month-ago remarks. “Prices have been driven up by strong domestic and international demand, labor shortages, supply chain disruptions, and high feed and other input costs,” USDA said. “Concentration and capacity constraints within the meat industry could also affect prices.”
Bottom line: USDA’s forecast range for overall food price inflation still falls within the increases that have been seen so far this year in all three of the “headline” categories. But the December data released in January will provide the complete picture for 2021 food price inflation, and that could result in the “final” numbers being toward the upper end of USDA’s current forecast ranges.
For individual products, the attention will now turn to 2022. USDA’s history is to gradually adjust those prices over the course of the year, with 2021 seeing increases on a monthly basis in the latter part of the year as more and more data has come in.
January 2021 marked the first upward adjustment to USDA’s forecasts within the various categories as USDA moved poultry to a range of 0% to 1% after it had been at a decrease of 0.5% to an increase of 0.5% in their December outlook. Given the higher prices being seen as 2021 winds down, it would not be surprising to see USDA increase its forecast levels for several categories next month. But in 2021, the adjustments were first seen in some categories in February forward.
In the meat categories, with the exception of pork and poultry, increases currently forecast for 2021 are close to the actual increases seen in 2020. If USDA’s forecasts for 2022 hold at current levels, which seems unlikely, it still means consumers will be looking at another annual rise in food prices. Even though the rate of increase is forecast to moderate, the rise will still come after two years of sizable food price increases.
CORONAVIRUS UPDATE
— Summary: Global cases of Covid-19 are at 276,317,420 with 5,371,759 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 51,274,973 with 810,164 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 495,025,982 doses administered, 204,578,725 have been fully vaccinated, or 62.33% of the U.S. population.
— FDA could authorize a pair of pills from Pfizer and Merck to treat Covid-19 as soon as today. The treatments, called Paxlovid and molnupiravir, are taken over several days and could ease the burden on the stretched hospital system this winter. "It's the biggest thing to happen in the pandemic after vaccines," said Eric Topol, director of the Scripps Research Translational Institute.
— Super vaccine effective against all Covid variants, including Omicron, created by Army. In a few weeks, scientists at the Walter Reed Army Institute of Research (WRAIR) are expected to announce a vaccine that is effective against all SARS and Covid variants, including Omicron. The vaccine has been in the works for almost two years, after the Army received its first DNA sequencing of the Covid virus in early 2020. The military at an early stage attempted to make a vaccine that would be effective against different variants. Unlike the other products, Walter Reed's is a spike ferritin nanoparticle vaccine, which has a soccer-ball shaped protein with 24 faces, allowing it to attach to the spikes of multiple COVID variants on different faces of the protein. Dr. Kayvon Modjarrad, director of Walter Reed's infectious diseases branch, told Defense One that the vaccine has had "positive results" at the trial stage. Link for details.
— The Israeli gov’t plans to offer a fourth dose of a Covid-19 vaccine to people over 60, as well as the immunocompromised and medical personnel. As for the time frame, the fourth shot will be recommended after waiting at least four months from the third dose, with the formal green light from the Health Ministry director general expected within days. "The world will follow in our footsteps," Prime Minister Naftali Bennett tweeted about the fourth booster campaign.
In late October, the CDC issued guidance that said immunocompromised people may receive a fourth Covid vaccine dose starting next year, but that could be a harbinger for the rest of the population. While the fourth jab for the immunocompromised should come at least six months after the third dose, the demographic is encouraged to talk to their doctors to determine if it is necessary. According to the CDC, about 9 million Americans (2% of the population), fall into the category of "moderately and severely immunocompromised," like those who are in active cancer treatment, certain organ transplant and stem cell recipients, people with advanced or untreated HIV, and those who take high-dose corticosteroids or drugs suppress their immune systems.
— Delta Air Lines has asked the CDC to halve its current 10-day recommended quarantine for vaccinated people who contract Covid-19, noting that about 90% of its staff are fully vaccinated and all airline personnel are required to wear masks on planes. "Our employees represent an essential workforce to enable Americans who need to travel domestically and internationally. With the rapid spread of the Omicron variant, the 10-day isolation for those who are fully vaccinated may significantly impact our workforce and operations."
— Americans are finding it’s hard and time consuming to find Covid-19 tests amid the rapid spread of the Omicron variant. The CDC released new data showing Covid-19 was the third leading cause of death in 2020, claiming more than 350,000 lives in the U.S. and lowering life expectancy by nearly two years, falling the most in 75 years. While experts welcomed President Biden’s plan to distribute 500 million free tests, the New York Times notes that many think far more are needed. The cost of producing the tests is less than $1, but scarcity has driven up their retail price. (Biden said he would invoke the Defense Production Act to augment the manufacturing of tests to help address supply issues.) From the NYT: “Let’s assume the White House can meet demand, and that the U.S. can buy the tests at $1 each. Paying for all 330 million Americans to have one rapid test a day for the next six months would cost about $60 billion, though that includes tests for infants and the like who don’t necessarily need them.” What about masks? If the U.S. gave every American two KN95 masks a week over the next six months, and the gov’t can buy them for $1 each, that comes out to $17 billion. (If you assume only 60% of Americans need them, by excluding infants and the like, that amounts to $10 billion.)
— Biden team plans 4 million doses of Covid treatments. The Biden administration expects to take delivery of 4 million courses of Covid-19 treatments by the end of January, according to officials, sharply ramping up therapies for the disease as the Omicron variant spreads. The treatments include a monoclonal antibody product, pre-exposure preventive drugs for immunocompromised people, and new antiviral pills awaiting Food and Drug Administration authorization, the officials said. That authorization is expected as soon as today.
— Covid and U.S. sports. The National Basketball Association, National Hockey League and National Football League had moved to postpone a combined 60 games as of Tuesday due to the latest surge in coronavirus cases. Such an upheaval hasn’t been seen since March 2020, when all leagues suspended their seasons almost overnight when the virus first struck the U.S.
— In the U.K., where cases have hit record levels, Prime Minister Boris Johnson ruled out stricter rules before Christmas. England will cut the isolation time after a positive test from 10 to seven days to counter worker shortages.
— Europe unveils new support to Covid-stricken businesses. Britain announced 1 billion pounds ($1.3 billion) in aid for the hospitality industry, with one-time grants of £6,000 and rebates for employees’ sick leave. France offered up to 12 million euros for travel agencies, events, caterers and indoor leisure companies. The governments in Spain and Italy are set to discuss potential aid this week.
POLITICS & ELECTIONS
— Sen. John Thune (R-S.D.) is seriously considering retiring after next year, the New York Times reports (link). Thune, the No. 2 Senate Republican and a potential future success to Senate GOP leader Mitch McConnell (R-Ky.), is only 60, but a combination of family concerns and Trump’s enduring grip on the party have prompted the senator to tell associates and reporters in his home state that 2022 could be his last year in Congress. His departure would be a blow to his state and could upend Senate Republicans’ line of succession.
— Robert Menendez Jr. has won backing from key Democrats in a northern New Jersey congressional district, the New York Times reports (link). Menendez, the 36 year-old son of New Jersey’s senior U.S. senator, has told political leaders that he will run for Congress to replace Rep. Albio Sires (D), who announced on Monday that he will not seek re-election.
— Glenn Youngkin taps longtime Virginia exec as commerce and trade secretary. Virginia GOP Gov.-elect Glenn Youngkin has tapped longtime Northern Virginia exec Caren Merrick as his secretary of commerce and trade. Merrick was most recently the CEO of the Virginia Ready Initiative, a nonprofit founded by Youngkin focused on workforce training programs for state residents facing economic hardships and unemployment created by the Covid-19 pandemic. CNBC ranked Virginia this year as the country's No. 1 state for business and the state closed the most recent fiscal year in June with a $2.6 billion surplus. Unemployment in Virginia also remains below the national average. Since 2014, Merrick has also served as a director of McLean's Gladstone Cos., a private equity company. Youngkin, a Republican, is also a former private equity exec, previously serving as co-CEO of The Carlyle Group Inc. before stepping down to seek the governorship. He defeated Democratic opponent Terry McAuliffe in November in his first-ever bid for elected office, putting millions of his own money into his campaign.
CONGRESS
— Senate returns on Jan. 3. The House isn’t back until Jan. 10.
OTHER ITEMS OF NOTE
— Vladimir Putin warned that Russia will consider military action if it feels threatened by Western countries over Ukraine. Russian troops have been amassing at the border for weeks; its president claims that the U.S. has deployed weapons in Poland and Romania in response. He is also demanding what some call unrealistic security guarantees from NATO, including a ban on Ukraine entering the group. The U.S. and its allies have warned Russia about the consequences of further hostilities amid its continued military buildup near the Ukraine border — a move that U.S. intelligence has assessed as preparation for a full-scale invasion early next year. NATO's Secretary General said yesterday that while the alliance is ready to engage in "meaningful dialogue" with Russia, it will continue to support Ukraine "politically and practically." Russia has amassed thousands more troops along its border with Ukraine in recent days. Bottom line: The U.S. expects to hold talks with Russia next month to try to defuse tensions. The Biden administration wants to secure assurances that Germany won’t let the pipeline become operational if Moscow invades Ukraine, said a U.S. congressional aide briefed on the discussions. Germany has been less clear. After a meeting of European Union leaders last week that warned Russia of massive but unspecified consequences, German Chancellor Olaf Scholz said the pipeline is a private project whose certification would be decided in a nonpolitical way.
— Student-loan payments extension mulled. The Biden administration is considering another extension to the moratorium on student-loan payments first put in place at the start of the Covid-19 pandemic, with a decision expected later this week. The moratorium is currently scheduled to expire at the end of January.
— FDA ag water meetings set for February. FDA just announced the dates of two public meetings where regulators will have the first opportunity to discuss the proposed rewrite of agricultural water requirements for produce under the Food Safety Modernization Act (FSMA). The virtual meetings are set for Feb. 14 and Feb. 25 and FDA plans to share registration information at a later date, the agency said on Dec. 21. A key component of the Produce Safety Rule, the original 2015 proposal relied on water testing mandates as preventive tools for pre-harvest ag water, but FDA retreated and pledged to seek another approach when growers complained tested was too complex and costly. The Dec. 6 proposal, however, takes a completely new approach to produce safety by embracing annual pre-harvest water assessments, among other changes. Along with the public meetings, stakeholders are being asked to comment on the rule by April 5, 2022.
