Food vs fuel enters the biodiesel debate | N.J. Dem governor wins razor-thin race
In Today’s Digital Newspaper
Market Focus:
• Fed to taper as expected… Fed chair defines ‘transitory’
• When Fed will start boosting interest rates a more distant timeline
• Shortage of truck drivers adding to delivery delays
• Worker shortfalls pushing up transportation costs, delaying deliveries
• Lawmakers urge lowering age limit for interstate commercial truckers
• Deere won’t raise offer to striking workers after second vote to ratify new contract failed
• OPEC+ countries expected to maintain current production levels at meeting today
• Logjam of U.S. imports stacked on ships off coast of LA also getting wider
• Texas governor: Re-route cargo to ‘one of the 24/7 functioning Texas cargo ports’
• IHS Markit raises U.S. corn, soybean crop estimates
• StoneX raises Brazilian soybean estimate, expects huge jump in safrinha corn crop
• Ag demand update
• Corn and wheat rebound, soybeans slip overnight
• Global food prices hit 10-plus year high
• FAO trims world cereal grain production, but it’s still record-large
• Cash cattle prices expected to move even higher
• Pork cutout back above $100
Policy Focus:
• Immigration, paid leave, SALT added to House BBB package
• House leaders want to vote on infrastructure bills today or Friday
• Manchin again says he opposes including paid leave in BBB
• How White House views BBB pay-fors
• BBB still has nearly $90 billion for ag and rural America
Afghanistan:
• Kabul drone strike investigation report
Biden Administration Personnel:
• Senate confirms Wojciechowski as USDA’s assistant secretary of congressional relations
• Senate Ag panel to vote on Behnam to be chairman of CFTC
• Senate confirms Thomas Nides to be U.S. ambassador to Israel
China Update:
• China tries to calm food supply concerns
• China signs largest LNG deal with U.S. firm
• China facing oversupply of pork
• China rapidly expanding its nuclear arsenal
• EU-Taiwan relations
Trade Policy:
• Russia plans to impose six-month quota on some fertilizer exports
Energy & Climate Change:
• At least 20 countries have agreed to end financing for fossil fuel projects abroad
• ASA says soy oil supply issues not linked to biofuels, but bakers disagree
Livestock, Food & Beverage Industry Update:
• Global food prices reached a ten-year high in October
• Tyson Foods has vaccinated more than 96% of its workforce
• Waste in food supply chains attracting growing interest
Coronavirus Update:
• Biden urges parents to get their children vaccinated against Covid-19
• Federal vaccine policy could come as early as today
• Germany reports record number of Covid-19 infections
Politics & Elections:
• New Jersey Democratic Gov. Phil Murphy re-elected
• Giddy House GOP leader: Republicans could flip 60 seats or more next year
• Wasserman gives perspective on House midterm elections
• House Dem gives warning to Biden
Congress:
• Update on House races
Other Items of Note:
• Biden denies reports payments of $450,000 to families separated at U.S.-Mexico border
MARKET FOCUS
Equities today: Global stock markets were mixed to mostly firmer in overnight trading. The U.S. Dow opened flat to slightly higher, than traded slightly lower. Asian equity markets finished mostly higher after the US Federal Reserve announced its plan to wind down bond purchases. The Hang Seng Index was up 200.44 points, 0.80%, at 25,225.19. Japan’s Nikkei was up 273.47 points, 0.93%, at 29,794.37 after being closed Wednesday for a holiday. European equities are seeing gains. The Stoxx 600 was up 0.5% while other markets posted gains of 0.1% to 0.5%.
U.S. equities yesterday: The Dow added 104.95 points, 0.3%, to 36,157.58. The Nasdaq gained 161.98 points, 1%, to 15,811.58, rising for an eighth consecutive session. The S&P 500 rose 29.92 points, 0.6%, to 4,660.57. All three indexes finished at highs.
On tap today (see detailed list of events and reports below):
• Bank of England releases a policy statement at 8 a.m. ET.
• European Central Bank President Christine Lagarde speaks at a conference on women in economics at 8 a.m. ET.
• U.S. jobless claims are expected to fall to 275,000 in the week ended Oct. 30 from 281,000 one week earlier. (8:30 a.m. ET) UPDATE: First-time claims dropped to 269,000 for the week ended Oct. 30, down 14,000 from the previous period and better than the estimate for 275,000, the Labor Department reported. The decline comes amid a rollback in special programs initiated during the crisis, with the total of those receiving benefits under all programs dropping another 157,731 to 2.67 million. The four-week moving average for claims, which helps smooth weekly volatility, fell 15,000 to 284,750. A year ago, the average was 791,000, and it was 225,500 in March 2020 just before the pandemic declaration sent more than 20 million Americans to the unemployment line.
• U.S. trade deficit is expected to widen to $81 billion in September from $73.3 billion one month earlier. (8:30 a.m. ET)
• U.S. labor productivity for the third quarter is expected to fall 3.2% from the prior quarter, and unit labor costs are forecast to rise 7.4%. (8:30 a.m. ET)
• USDA Weekly Export Sales report, 8:30 a.m. ET.
• Fed Vice Chairman Randal Quarles speaks on a panel on financial stability at 1:50 p.m. ET.
• Japan household spending for September is expected to fall 3.9% from one year earlier. (7:30 p.m. ET)
Fed officials signaled they will start reducing emergency pandemic support for the economy later this month. The Fed will reduce its net asset purchases by $15 billion per month... $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities... though the pace could be adjusted if necessary. The Fed aims to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.
Fed officials acknowledge inflation will last longer than previously thought, but continues to predict the recent acceleration is “transitory.” Most recent CPI data showed headline prices rising by 5.4% Y/Y in September, marking the fifth consecutive month of annual increases of 5% or more. “Transitory is a word that people have had different understandings of. For some, it carries a sense of ‘short-lived,’ and that there’s a real-time component, measured in months,” Powell said at the Fed press conference. He went on to say that, for the Fed, it’s not so much a measurement of time — but rather a question of whether the current trend of rising prices will lead to “permanently or persistently high inflation.” (Editor’s note: I have a better definition of transitory: my weight loss.)
When the Fed will start boosting interest rates is a more distant timeline. Fed Chair Jerome Powell previously stated the conditions for raising interest rates are far different than those for the tapering of asset purchases. Immediately after the FOMC meeting, Fed fund rate futures implied 90% odds of a rate increase by December 2022.
Trucking is emerging as a stubborn choke point in the freight-backlog mess. Trucks haul more than 70% of domestic cargo shipments. Yet many fleets say they can’t hire enough drivers to meet booming consumer demand as the U.S. economy emerges from the pandemic. The freight backup has intensified longstanding strains in the industry over hours, pay, working conditions and retention.
Meanwhile, the worker shortfalls are pushing up transportation costs and delaying deliveries for retailers and manufacturers already coping with disruptions ahead of the holiday peak. The American Trucking Associations, a trade group, estimates the industry is some 80,000 drivers short of what is needed to keep goods moving freely this year — up from an estimated shortage of 61,500 drivers before the pandemic.
Lawmakers urge lowering age limit for interstate commercial truckers. A dozen Senate Republicans led by Joni Ernst (R-Iowa) are urging the Federal Motor Carrier Safety Administration (FMCSA) to lower the age limit for interstate commercial truckers, with the aim of easing a worsening shortage of truckers that threatens to exacerbate rising shipping costs and delays. Given the driver shortage, the lawmakers are urging FMCSA to allow persons 18 years of age and older “to obtain a commercial driver’s license (CDL) and operate commercial motor vehicles in interstate commerce to get American goods and services moving again.” The letter notes that under current rules, a 20-year-old trucker “could drive 363 miles in Iowa from Sioux City to Davenport, but that same driver could not drive five miles into Moline, Illinois.”
Deere & Co. won’t raise its offer to striking workers after a second vote to ratify a new contract failed Tuesday. Marc Howze, the chief administrative officer for the farm and construction equipment manufacturer, said the company had made its best and final offer. The rejected contract would have given more than 10,000 striking Deere employees an immediate 10% increase in pay, plus an $8,500 bonus for each worker and additional 5% pay raises in 2023 and 2025.
Market perspectives:
• Outside markets: The U.S. dollar index is higher amid weakness in the euro, yen and British pound against the greenback. The yield on the 10-year U.S. Treasury note fell, trading near 1.58%, with declines in most other global government bond yields. Gold and silver futures are higher, with gold trading around $1,782 per troy ounce and silver around $23.85 per troy ounce.
• Crude oil prices are up ahead of U.S. trading with U.S. crude trading around $82.50 per barrel and Brent around $83.70 per barrel. Futures turned higher in Asian action, with U.S. crude up $1.65 at $82.51 per barrel while Brent was up $1.70 at $83.69 per barrel.
• OPEC+ countries meet today to decide whether to increase oil production as the world faces a growing supply crunch, fueled by an economic rebound in the developed world. The group is expected to maintain current production levels. The program “is working well and there is no need to deviate from it,” according to Angola Oil Minister Diamantino Pedro Azevedo, while Kuwait expressed additional sentiment that oil markets were “well-balanced.” Oil prices have risen to seven-year highs in recent weeks as demand has steadily rebounded following a steep fall at the outset of the coronavirus pandemic. The average gas price has ticked up to $3.38 per gallon, according to figures from the U.S. Energy Information Administration. That crunch on consumers is the reason why President Biden is pushing OPEC to pump more oil and force the price down. “The idea that Russia and Saudi Arabia and other major producers are not going to pump more oil so people can have gasoline to get to and from work, for example, is not right,” Biden said on Sunday. Observers note the U.S. may well go the same route as China, which has drawn on its own fuel reserves to keep prices down locally. The U.S. holds roughly 600 million barrels of crude oil in its strategic petroleum reserve, and Energy Secretary Jennifer Granholm suggested in October that it could soon be put to use.
• Logjam of U.S. imports stacked on ships off the coast of Los Angeles isn’t just getting longer. It’s getting wider. Bloomberg reports that of the 77 container vessels waiting as of Tuesday for berth space at the ports of L.A. and Long Beach, 23 had room to carry more than 10,000 containers measured in 20-foot equivalent units, or TEUs, according to data from the Marine Exchange of Southern California & Vessel Traffic Service Los Angeles and Long Beach. That share — 30% of queued vessels exceeding 10,000 TEUs — is up from 23% at the end of August, when 10 of the 43 anchored ships topped that threshold. That’s pushed the average capacity of the waylaid ships close to 6,900 TEUs, or about a thousand more than the average two months ago, according to the data.
Texas has a solution: The governor of Texas launched the ‘Escape California’ Twitter campaign this week, with a 30-second video telling carriers that in less than two weeks, they can re-route cargo to “one of the 24/7 functioning Texas cargo ports.”
• IHS Markit raises U.S. corn, soybean crop estimates. Private analytics firm IHS Markit raised its U.S. corn crop estimate to 15.204 billion bu. on a national average yield of 178.7 bu. per acre. The production figure is up 119 million bu. from the firm’s forecast last month on a 1.9-bu.-per-acre increase in yield. IHS Markit now pegs the U.S. soybean crop at 4.454 billion bu. on a yield of 51.5 bu. per acre. Those estimates are up 33 million bu. for crop size and 0.4 bu. per acre on yield.
• StoneX raises Brazilian soybean estimate, expects huge jump in safrinha corn crop. Due to favorable weather in September and October, Brazil’s soybean crop is off to a strong start. That prompted StoneX to raise its 2021-22 Brazilian soybean crop estimate to a record 144.7 MMT, up 470,000 MT from its prior forecast. “Despite the uncertainties [La Nina], the outlook remains very favorable for the soybean harvest, with very positive weather in the first months of the cycle,” the consultancy said. With planting of the Brazilian soybean crop advancing at the second fastest pace on record, StoneX says the country’s safrinha corn crop will largely be seeded within the ideal window and it expects acreage to expand 7.4% from last year. As a result, the firm estimates safrinha corn production at 87.5 MMT, which would be up 47.9% from the 2020-21 crop.
• Ag demand: Results are awaited on Japan’s tender to buy 143,396 MT of wheat from the U.S., Canada and Australia.
• NWS weather: Series of Pacific storm systems to bring blustery winds, rain, and high elevation snow to the Pacific Northwest, the Northern Great Basin, and Northern Rockies... ...Quasi-stationary boundary to deliver heavy rain to portions of Florida on Friday... ...Unseasonably cool temperatures across the South-Central and Eastern U.S. to begin bouncing back to normal as warmth from the Western U.S. spreads east...
Items in Pro Farmer’s First Thing Today include:
• Corn and wheat rebound, soybeans slip overnight
• Global food prices hit 10-plus year high
• FAO trims world cereal grain production, but it’s still record-large
• Cash cattle prices expected to move even higher
• Pork cutout back above $100
POLICY FOCUS
— House Dems push to pass both infrastructure measures. House Majority Leader Steny Hoyer (D-Md.) announced Wednesday night that both bills could see a floor vote as soon as today, but more likely on Friday. The House yesterday released updated Build Back Better (BBB) language (some 2,100 pages) and though late additions will likely complicate its chances in the Senate. It restores a previously dropped paid-leave program that Sen. Joe Manchin (D-W.Va.) has objected to. It raises the deduction cap for state and local taxes, a plan that Sen. Bernie Sanders (I-Vt.) called regressive and includes other tax provisions not in the prior version or specifically mentioned in the White House framework. House Democrats also added protections for immigrants in the country illegally, and some lawmakers seek more. House Rules met Wednesday on the new text and recessed “subject to the call of the chair” after midnight.
House Majority Whip James Clyburn (D-S.C.) started a whip count on the new text Wednesday evening, asking, “Will you support HR 5376, Build Back Better Act?” with a response deadline of 11 this morning. He wants to know where everyone stands before lunchtime.
One key to watch in the House: Five moderate Dems who have said they don’t want a vote until they see a Congressional Budget Office (CBO) score and get assurances that Senate Democrats have the votes to pass the latest version of the House bill. House Budget Chair John Yarmuth (D-Ky.) says getting a full score from CBO could take two weeks, if not longer. “Most of it’s been scored, but there’s some interactions with the tax stuff that makes it a little bit complicated to score,” he said Wednesday.’
“We don’t need a CBO score to take it to the floor,” House Speaker Nancy Pelosi (D-Calif.) told her caucus. Pelosi laid out the agenda, as she’d like it. “I recommend we vote on BBB first,” pushing for a vote on the big spending plan ahead of the bipartisan infrastructure bill. But several moderates say the Senate-passed BIF must be first.
— Sen. Manchin again says he opposes including paid leave in the spending bill even as House Democrats prepare to stick it into their legislation and send it to the Senate. “That’s a challenge, very much a challenge,” Manchin said, adding that the spending bill is the “wrong place” for a paid leave proposal. He instead argued that paid leave should be done outside of reconciliation, a process Democrats are using to attempt to advance their bill without GOP support. The process comes with strict rules on what can, or can’t, be included in the bill.
“I want to support paid leave. I want to do it in a bipartisan way. I’ve talked to [GOP Sen.] Susan Collins (R-Maine). I’ve talked to colleagues on both sides. We both agree something can be done,” Manchin said. “Let’s do that in a proper [way]. We’re trying to force it through reconciliation, which has guardrails and rules and regulations. Let’s do it and do it right,” he said.
— Democrats looking to raise SALT cap from $10,000 to $72,500. Progressives don’t like it because it would mostly benefit wealthier taxpayers. But House Speaker Nancy Pelosi (D-Calif.) needs to get pro-SALT Democrats to vote for the reconciliation package. Sen. Bernie Sanders (I-Vt.) is pushing his own compromise —restricting State and Local Tax (SALT) deductions to only those who earn up to about $400,000 to $550,000.
— Latest House draft text includes a five-year work authorization and protections for undocumented immigrants — but without the long-sought goal of a pathway to citizenship many Democrats wanted. The revised BBB text includes language that would allow the Department of Homeland Security to “parole” undocumented immigrants who entered the United States before January 2011 for at least five years — with a possible extension to 2031 — but no path to citizenship. The threat of deportation would be removed, provided they can pass a background check. It would also allow “green card recapture” authorized by Congress but never issued. Pro-immigration groups estimate that up to a 1 million immigrants could be impacted by this.
— Bottom line on House action. House Democratic leaders have said they would not put the two measures to a vote unless they had enough to pass them. They announced on Wednesday that they were putting paid leave back into bill. The provision will provide four weeks of permanent parental and medical leave.
Upshot: It appears House Speaker Nancy Pelosi (D-Calif.) wants to move on the infrastructure measures knowing full well the Build Back Better bill would be changed, significantly, in the Senate.
— Senate action is key. If House Democrats pass the social and climate spending legislation with the paid leave proposal in the bill, they would effectively be forcing Senate Democrats to decide if they will try to strip it out. Any senator can force a vote on trying to change the spending bill once it’s on the Senate floor, and most amendments can be adopted by a simple majority. That could allow all Republicans and Manchin to try to remove the paid leave provision.
— How White House views BBB pay-fors. While the Congressional Budget Office and the Joint Committee on Taxation scores of the BBB are not yet released, here is how the White House gets to $2.1 trillion in offsets for Biden’s proposals:
— BBB still has nearly $90 billion for ag and rural America. Link for details.
AFGHANISTAN
— Kabul drone strike: A Pentagon investigation into an Aug. 29 U.S. drone strike that mistakenly killed 10 Afghan civilians, including children, did not find evidence of criminal negligence or violation of law, the Defense Department announced on Wednesday. The botched operation was the result of “execution errors combined with confirmation bias and communication breakdowns,” the Air Force inspector general said. The full report is classified to protect sources and methods. There will be no disciplinary action for any personnel involved in the strike.
BIDEN ADMINISTRATION PERSONNEL
— Senate by voice vote confirmed Adrienne Wojciechowski to be USDA’s assistant secretary of congressional relations. She has been an aide to the Senate Agriculture Appropriations Subcommittee. Meanwhile, the Senate Agriculture Committee is set to vote on the nomination of Rostin Behnam to be chairman of the Commodity Futures Trading Commission.
— Senate confirmed Thomas Nides by voice vote to be U.S. ambassador to Israel. Nides is Biden’s sixth Senate-confirmed foreign ambassador, well behind the Senate’s pace from the Trump presidency.
CHINA UPDATE
— China tries to calm food supply concerns. Food security claims are increasing after Beijing told families to keep daily necessities in stock in case of emergencies, after Covid-19 outbreaks and heavy rains this fall caused a surge in vegetable prices and raised concerns about supply shortages. China says it will guarantee supplies of daily necessities, including meat and vegetables, and stabilize their prices, state media reported, citing government officials.
China’s total grain reserves are currently sufficient and stocks of wheat and rice continue to increase, a Chinese official with the National Food and Strategic Reserves Administration said. The official says the country’s reserves of the staple grains are at a historically high level and wheat stocks are sufficient to meet consumer demand for a year and a half.
China’s ability to ensure its food supply has been strengthened, the official said, citing sufficient stocks of rice and flour products, as well as grain and oil processing capabilities.
— China signs largest LNG deal with U.S. firm. China’s state-owned Sinopec signed a contract with U.S. Venture Global LNG to buy 4 MMT of liquefied natural gas (LNG) annually for 20 years. The deal is the largest LNG long-term contract signed between Chinese and U.S. companies and will double China’s imports from the United States. No details were given on when the shipments would start, though Reuters reported industry analysts expect the Plaquemines, Louisiana plant that will supply the LNG will begin production in 2024. Separately, Unipec, a subsidiary of Sinopec, will also buy a total of 3.5 MMT of LNG from the Calcasieu Pass project owned by Venture Global LNG for a shorter duration.
— China facing oversupply of pork. China’s sow herd is 6% larger than normal, according to the deputy director of the country’s ag ministry Animal Husbandry and Veterinary Bureau, resulting in an oversupply of pork. As a result, Beijing is calling for farmers to cull inefficient sows. The ag ministry official says sow stocks won’t return to “reasonable” levels until next year and urged farmers not to “blindly gamble on the market outlook because of the current rise in pig prices.”
— China is rapidly expanding its nuclear arsenal and may have 1,000 nuclear warheads by the end of the decade as it aims to surpass U.S. global influence by the middle of the 21st century, according to a major Pentagon report (link) released on Wednesday.
— EU-Taiwan relations. Taiwan President Tsai Ing-wen meets today with a group of European parliamentarians, the first-ever official EU delegation to visit the island. The trip comes amid an increase in engagement between Taiwan and the European Union’s member states, much to the displeasure of China, which claims Taiwan as its own territory. A vote in the European Parliament in October called on the bloc to form a bilateral investment treaty with Taiwan, while both the Czech Republic and Slovakia hosted Taiwan’s Foreign Minister Joseph Wu last week.
TRADE POLICY
— Russia plans to impose a six-month quota on some fertilizer exports to safeguard local supplies and limit costs for farmers after the energy crisis sent nitrogen nutrient prices soaring.
ENERGY & CLIMATE CHANGE
— At least 20 countries have agreed to end financing for fossil fuel projects abroad in a deal that’s expected to be announced today as part of the COP26 summit in Glasgow. Several countries made a similar deal this week to end international financing for coal. Meanwhile, more than 450 companies across 45 countries have also signed on to the Glasgow Financial Alliance for Net Zero, which aims to deliver $100 trillion in financing over the next three decades to combat the climate crisis.
— ASA says soy oil supply issues not linked to biofuels. While food industry groups say the lack of edible oil for cooking is a problem because it is being diverted to biodiesel, the American Soybean Association (ASA) says there is no cause for alarm. In a recent editorial penned by ASA CEO Stephen Censky, the group says 86 million acres of soybeans are currently being harvested for a projected record 4.4 billion bushels, insisting there is enough for food, feed and fuel. “At least seven new oilseed processing plants are under development, and soybean oil production by the domestic processing industry is projected by USDA to reach a record level this year — on top of a 26% growth in supply over the last 10 years,” ASA says. In short, the markets are responding to the new demands. According to ASA president Kevin Scott, “There is currently not a soy oil supply shortage, nor is one envisioned by year-end, but there are in fact very real supply chain challenges impacting U.S. agriculture.” Scott added, “Likewise, we hope the administration will demonstrate the commitment to biofuels and the RFS it has pledged despite these shortage rumors.”
The other side. Bakers are experiencing a “soybean oil supply crisis” of soaring prices and limited availability due in part to rush of investors into renewable diesel fuel, an Ohio baking executive said Wednesday. “Economists report that vegetable oil prices have tripled in the past 12 months and that the food sector faces rationing and shortages for the third quarter of 2021 and into 2022,” said executive Ed Cinco, testifying on behalf of the American Bakers Association (ABA), a trade group. “This means for some food companies, edible oil literally will not be available at any price due to diversion of edible oil from producing food to burning as fuel at the end of this calendar year.” Cinco, purchasing director for Schwebel’s Baking Co. in Youngstown, Ohio, said “ABA members are reporting that because of the lack of certain ingredients, they will no longer be able to manufacture 10% to 15% of their product line. … Bakers will have to make tough decisions, and this will impact American families,” said Cinco, who spoke at a House Agriculture Committee hearing on “challenges to our nation’s food supply chain.” Ingredients in short supply include gluten, emulsifiers, and soy oil, with “upcoming issues” projected for honey, sesame seeds, and durum flour, according to the baking industry.
Facts and figures. One-third of U.S. soy oil production is used to make biofuels. USDA says that could jump to 43% in the marketing year that ends Sept. 30, 2021. The Energy Department said last summer that renewable diesel production, now less than 1 billion gallons a year, could reach 5 billion gallons by 2024, based on announced or proposed projects.
But House Agriculture chairman David Scott (D-Ga.) said that although supply chain disruptions were “serious and unprecedented, it is important to remember that we are not facing a scarcity of food and agricultural commodities.” There is an abundant, secure food supply, and farm exports are forecast for record highs this year, he said. Scott said a major element in supply chain disruptions was a shortage of truck drivers.
LIVESTOCK, FOOD & BEVERAGE INDUSTRY
— Global food prices reached a ten-year high in October, according to an index compiled by the U.N.’s Food and Agriculture Organization. After rising for three consecutive months, the index is at its highest since July 2011. The latest 3% month-on-month increase was primarily led by price jumps in cereals and vegetable oils. The index was 31.3% higher than last year. The gain in food prices was led by a 9.6% month-to-month rise in vegoil prices to an all-time high. Cereal grain prices increased 3.2%, dairy rose 2.2% and sugar firmed 1.8% compared with September. Meat prices were the only component to decline, down 0.7% from the September value.
— Tyson Foods has vaccinated more than 96% of its workforce. Tyson Foods has vaccinated more than 96% of its workforce, an additional 60,500 workers since the meatpacker first announced a Covid-19 vaccine mandate for employees, the New York Times reported (link). Many of the company’s plants are located in regions with stiffer resistance to vaccination, but Tyson CEO Donnie King said in an interview last week that the company “made the decision to do the mandate, fully understanding that we were putting our business at risk,” adding it was “very painful to do.” NYT notes that Tyson’s vaccine push “marks a significant turn for a company that had been criticized early in the pandemic for failing to adequately protect workers in its plants.”
— Waste in food supply chains is attracting growing interest from technology startups and venture-capital firms. A new wave of entrepreneurs is looking at how tools such as artificial intelligence can more accurately gauge customer demand, the Wall Street Journal reports (link), as well as technology that can streamline logistics processes to reduce spoilage from farm to the table. PitchBook says the food-tech sector raised $170 billion between January and June this year, up from $147 billion in all of 2020. The funding demonstrates how environmental initiatives made by big companies are serving as a boon to a small segment of tech startups. Shipping-sector technology focused on perishables has largely focused on refrigeration and tracking the condition of goods during transport. But the new wave of companies including Atlanta-based Goodr and Israel’s Wasteless say their technology is aimed at reducing waste across the entire supply chain.
CORONAVIRUS UPDATE
— Summary: Global cases of Covid-19 are at 248,202,315 with 5,024,363 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 46,252,689 with 750,430 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 423,584,859 doses administered, 192,931,486 have been fully vaccinated, or 58.78% of the U.S. population.
— Biden urged parents to get their children vaccinated against Covid-19. The Food and Drug Administration last week and the Centers for Disease Control and Prevention this week determined that vaccine doses for children from ages 5 to 11 are safe and effective, in addition to the approval already given for young people ages 12 to 18. Biden called children’s eligibility for jabs “a giant step forward to further accelerate our path out of this pandemic.” Although some parents remain hesitant to get their children inoculated against the coronavirus because of rare side effects, Biden focused on parents eager to line their children up for the shots. “For parents all over this country, this is a day of relief and celebration,” he said.
— A federal vaccine policy could come as early as today via an Occupational Safety and Health Administration regulation requiring workers at large companies to be vaccinated against Covid-19 or submit to weekly virus testing in the interest of a safe workplace. The federal requirement will cover an estimated 80 million people. Biden’s mandate will likely end up in court almost immediately.
— Germany reported a record number of Covid-19 infections, nearly 34,000 in a single day. The previous record was in December 2020 as the pandemic began. Infections among children are skyrocketing and intensive care units in hospitals are filling with Covid-19 patients.
POLITICS & ELECTIONS
— New Jersey Democratic Gov. Phil Murphy was re-elected, defeating Republican Jack Ciattarelli by a razor-thin margin. No New Jersey Democrat had won re-election to the governorship in 44 years. President Joe Biden won the state by 16 percentage points. The former Goldman Sachs executive’s vulnerability to Republican criticism of the state’s high taxes and handling of the pandemic may foreshadow trouble for Democrats in next year’s midterm elections.
Meanwhile, New Jersey state Senate President Stephen Sweeney appears to have lost re-election to Edward Durr, a man who “has never held public office, he has been a commercial truck driver for 25 years and he claims to have spent a whopping $153 during the primary portion of his campaign,” per NJ.com (link). “Of the $153 Durr spent on his moonshot campaign, nearly half went to Dunkin’ Donuts,” via Washington Free Beacon (link).
— House GOP leader: Republicans could flip 60 seats or more next year. Republicans took a victory lap Wednesday following Republican Glenn Youngkin’s stunning win in the Virginia governor’s race, with House Minority Leader Kevin McCarthy (R-Calif.) predicting his party could flip more than 60 House seats in next year’s midterm elections. “If you’re a Democrat, and President Biden won your seat by 16 points, you’re in a competitive race next year. You are no longer safe,” McCarthy told reporters while flanked by his leadership team and Virginia Republicans. “It’ll be more than 70 Democrats that will be competitive. There’s many that are going to lose their races based upon walking off the cliff from Nancy Pelosi (D-Calif.) pushing. She may not care if she loses. She lost 63 [seats] the last time she was speaker moving policy that the country didn’t care for. Many believe she won’t stay around, so is she going to be there to defend you?” Meanwhile, McCarthy said Republicans would unveil a “Parents’ Bill of Rights” soon.
While McCarthy’s comments appear to be on the post-election giddy side, note this perspective for David Wasserman, House editor of the Cook Political Report with Amy Walter: “To put the magnitude of these swings in context: if Republicans were to outperform the 2020 Biden/Trump margin by 10.8 points (New Jersey) in all 435 House seats in 2022, they would pick up 44 House seats for a 257R-178D majority. If they were to outperform by 12.3 points (Virginia), they would pick up a mammoth 51 seats for a 261R-174D split — and that’s not even factoring redistricting, which could help boost GOP fortunes even more.” Concludes Wasserman: “The question in the months ahead is how many additional Democratic incumbents decide to retire from potentially vulnerable House districts, now that New Jersey and Virginia have made clear to the political world an anti-Biden freight train is approaching.”
— House Dem gives warning to Biden. Rep. Abigail Spanberger, a vulnerable Virginia Democrat, said Biden needs to remember that he won in 2020 first and foremost because his name was not Donald Trump, and adjust his expectations accordingly: “Nobody elected him to be FDR, they elected him to be normal and stop the chaos.”
CONGRESS
— Update on House races. In Ohio, Democrat Shontel Brown and Republican Mike Carey each easily won a pair of House special elections in reliable territory for their parties. When they join Congress, the House makeup will be 221 Democrats and 213 Republicans.
In Florida, the Democratic primary in the special election to fill the House seat of the late Rep. Alcee Hastings (D) is headed to a recount. With 100% of precincts reporting, the top two candidates are separated by just 31 votes.
OTHER ITEMS OF NOTE
— President Biden denied reports that his administration would send payments of $450,000 to families separated at the U.S.-Mexico border during the Trump administration. The Wall Street Journal reported last week, citing people familiar with the matter, that officials at the departments of Justice, Homeland Security and Health and Human Services were in talks to pay around $450,000 a person to settle lawsuits filed on behalf of the families, who say they suffered trauma from being separated in 2018 while illegally crossing the border. The people familiar with the matter have said the talks are ongoing and the final numbers could shift. The White House referred questions about the president’s remarks to the Justice Department, which said it “will not comment on ongoing litigation.”
“President Biden may not have been fully briefed about the actions of his very own Justice Department as it carefully deliberated and considered the crimes committed against thousands of families separated from their children as an intentional governmental policy,” said Anthony D. Romero, executive director of the American Civil Liberties Union, which is involved in the litigation. “But if he follows through on what he said, the president is abandoning a core campaign promise to do justice for the thousands of separated families.”
EVENTS AND REPORTS
Thursday, Nov. 4
· COP26 issues. Washington Post Live virtual discussion on the Glasgow COP26 climate conference, “the goals for the summit, how to accelerate the transition to clean power and the stakes for future generations.”
· Produce industry issues. Final day of the Agricultural Marketing Service meeting by teleconference of the Fruit and Vegetable Industry Advisory Committee to examine the full spectrum of fruit and vegetable industry issues and provide recommendations and ideas to the USDA Secretary on how USDA can tailor programs and services to better meet the needs of the U.S. produce industry.
· Government cybersecurity. Federal Computer Week virtual Continuous Diagnostic and Mitigation (CDM) summit, with Gina Fisk, chief information security officer of the Energy Department’s Office of Science; and Chris Johnson, director of the National Geospatial-Intelligence Agency’s Cybersecurity Operations Center, participate in a discussion on “Strategies for Reducing Cyber Exposure.”
· Financial market issues. Securities Docket virtual 2021 Securities Enforcement Forum with SEC Chair Gary Gensler delivering keynote remarks.
· Economic security and markets. Atlantic Council virtual discussion on “Economic Security Screening: Geopolitics, Markets and Compliance.”
· Congressional oversight. House Select Modernization of Congress Committee (Chairman Derek Kilmer, D-Wash.) hearing on “Article One: Strengthening Congressional Oversight Capacity.”
· Financial market issues. Bloomberg virtual Financial Innovation Summit with SEC Commissioner Hester Peirce delivering remarks on the regulatory outlook.
· Disaster aid. Senate Small Business and Entrepreneurship Committee holds markup of several pieces of legislation, including (S 1617) the “Disaster Assistance for Rural Communities Act.”
· Energy and climate issues. American Council on Renewable Energy virtual 2021 Grid Forum, including remarks from acting Assistant Energy Secretary Kely Speakes-Backman and Jahi Wise, White House office of Domestic Climate Policy, participates in a discussion on “Centering Environmental Justice in the 21st Century Grid.”
· Cybersecurity and infrastructure. House Transportation and Infrastructure Committee hearing on “The Evolving Cybersecurity Landscape: Industry Perspectives on Securing the Nation’s Infrastructure.”
· Natural resources trade. House Financial Services National Security, International Development, and Monetary Policy Subcommittee hearing on “From Timber to Tungsten: How the Exploitation of Natural Resources Funds Rogue Organizations and Regimes.”
· Small businesses and community colleges. House Small Business Innovation, Entrepreneurship and Workforce Development Subcommittee hearing on “The Community College Pipeline to Small Businesses.”
· Covid response. Senate Health, Education, Labor and Pensions Committee hearing on “Next Steps: The Road Ahead for the Covid-19 Response.”
· Nuclear energy. Senate Energy and Natural Resources Committee hearing on “Potential Non-Electric Applications of Civilian Nuclear Energy.”
· Digital trade and the EU. Center for Strategic and International Studies virtual discussion on “Digital Trade in the European Union.”
· Defense Production Act. Homeland Security Department’s Federal Emergency Management Agency teleconference to implement the Pandemic Response Voluntary Agreement under Section 708 of the Defense Production Act.
· Vaccine mandate. Heritage Foundation virtual discussion on “What’s Wrong with President Biden’s Covid-19 Vaccine Mandate.”
· Midterm elections. Bipartisan Policy Center virtual discussion on “One Year Out from the Midterms: Where Election Misinformation Stands.”
· Mexico electricity reforms. Woodrow Wilson Center’s Mexico Institute virtual discussion on “The Impact of Mexico’s Proposed Electricity Reform on Climate, the Economy, and System Reliability.”
· Economic reports. Jobless Claims | International Trade | Productivity and Costs
· Energy reports. OPEC+ virtual conference; Joint Ministerial Monitoring Committee meeting | Singapore onshore oil-product stockpile weekly data | Russia weekly refinery outage data | EIA Natural Gas Report | North Sea loading programs (December)
· USDA reports. FAS. Export Sales NASS: Dairy Products