Russia's Lavrov: NATO Risks Turning Ukraine Conflict into World War

USDA 2022 food price inflation forecasts already at 14-year high… more hikes likely ahead

Russia’s foreign minister warned of a potential world war. Foreign Minister Sergei Lavrov said the West is engaged in a proxy war with Russia that could escalate into a world war with nuclear weapons, as Western nations elevated their commitment to Ukraine. His Ukrainian counterpart, Dmytro Kuleba, called the statement a sign Moscow senses defeat, and said the world “must double down on supporting Ukraine.” Meanwhile, Germany decided to break a longstanding taboo on allowing the export of heavy weapons to Ukraine, yielding to mounting domestic and international pressure on Berlin to help boost Kyiv’s defenses. 

President Biden may add global food aid to a coming Ukraine funding request, but the White House is still configuring its request for the Ukraine package. A growing global food crisis is spurring bipartisan support for aid. Senator Chris Coons led a congressional delegation to Rome over the weekend for briefings on the emerging global impact on hunger in the Middle East, Africa and lower-income nations around the world. Rockefeller Foundation President Rajiv Shah last week warned of a “massive, immediate food crisis” around the world.

USDA daily export sales: 132,000 MT of soybeans to China during MY 2022-2023 and 133,000 MT of soybeans to unknown destinations — 78,000 MT for delivery during MY 2021-2022 and 55,000 MT in MY 2022-2023. 

Fed governor Lael Brainard’s nomination to become the central bank’s vice chairwoman cleared a procedural vote in the Senate, setting her up for confirmation later this week.

President Biden nominated an ambassador to Ukraine. Bridget Brink’s nomination comes after a long delay in replacing the ambassador removed by President Donald Trump in 2019, and as the U.S. signals it wants to see Russia weakened to prevent future military aggression. 

USDA 2022 food price inflation forecasts are already at a 14-year high and more hikes are likely ahead. Details below. 

Railroad (mis)management in focus today, Wednesday. The conflict over a management strategy known as precision scheduling is expected to come to a head today, the first of a two-day hearing of the Surface Transportation Board (STB), where shippers and rail employees will lay out their grievances.

Big retailers are dodging tariffs using the customs rule that grants American tourists duty-free purchases, the WSJ reports. More than a tenth of Chinese imports by value arrive as de minimis shipments, Customs data indicates, compared with well under 1% a decade ago. The de minimis rule exempts American tourists from duties on small purchases made abroad, and this has turned into a lucrative strategy for big retailers looking to avoid billions of dollars in tariffs. 

Ford’s all-electric Lightning pickup truck rolls off the assembly line today. 

Biden administration plans to make it easier for infected people to get Covid-19 treatments. 

Three-quarters of Beijing's 22 million citizens lined up for coronavirus tests Tuesday as authorities in the Chinese capital raced to stamp out a nascent outbreak under the country's zero-Covid policy. They want to avoid the debilitating citywide lockdown that's hampered China's biggest city of Shanghai for a month. 

Kim Jong Un suggested North Korea’s nuclear weapons aren’t just for self-defense and could be used against countries seeking to violate the fundamental interests of North Korea. 

If you haven’t heard this, you are watching too many videos: Twitter accepted Elon Musk’s bid to acquire the company and take it private. 

U.S. Election Day 2022 is 196 days away. Election Day 2024 is 924 days away.

Equities today: Global stock markets were mixed overnight. U.S. Dow opened around 200 points lower. In Asia, the Nikkei gained 109.33 points, 0.4%, at 26,700.11. Hong Kong’s Hang Seng rose 65.37 points, 0.3%, at 19,934.71. Shares in mainland China were off around 1.4%. European equities are advancing, with the Stoxx 600 up 0.8% and regional markets posting gains of 0.3% to 1.1%.

     U.S. equities yesterday: The Dow gained 238.06 points, 0.70%, at 34,049.46. The Nasdaq rose 165.56 points, 1.29%, at 13,004.85. The S&P 500 was up 24.34 points, 0.57%, at 4,296.12.

Agriculture markets yesterday:

• Corn: July corn rose 9 cents to $7.98 after erasing early declines, while December corn rose 9 1/2 cents to $7.34.
• Soy complex: July soybeans fell 12 3/4 cents to $16.75 1/4, the contract’s lowest closing price since April 14 but nearly 19 cents above today’s low. July soymeal fell $6.50 to $445.60. July soyoil fell 43 points to 80.08 cents per pound.
• Wheat: July SRW wheat fell 2 3/4 cents to $10.72 1/2. July HRW wheat rose 3 1/2 cents to $11.53. July spring wheat rose 14 3/4 cents to $11.77 1/2.
• Cotton: July cotton futures fell 44 points to 135.41 per pound, the lowest settlement since April 11 but 308 points off today’s low.
• Cattle: June live cattle dropped $3.00 to $135.425, a two-week closing low. May feeder cattle fell $2.575 to $161.30.
• Hogs: April lean hogs June lean hogs fell the $4.75 daily trading limit to $114.025, the contract’s lowest closing price since March 9. The daily trading limit expands $7.00 today.
   

Ag markets today: Corn and spring wheat futures extended Monday’s gains overnight amid planting delays concerns. Soybeans and winter wheat rebounded from Monday’s losses on corrective buying. As of 7:30 a.m. ET, corn futures were trading around 4 cents higher, soybeans were 9 to 12 cents higher, winter wheat futures were mostly 20 to 23 cents higher and spring wheat was 14 to 22 cents higher. Front-month U.S. crude oil futures were around 50 cents higher this morning, while the U.S. dollar index was more than 100 points higher.

Technical viewpoints from Jim Wyckoff: “The corn and soybean bulls have the solid overall near-term technical advantage. Wheat bulls have faded recently. However, here’s an important observation from Monday’s price action in the raw commodity markets: The grains, while not posting solid price gains Monday, were able to hold stable to a bit weaker when most of the rest of the raw commodity futures markets were selling off sharply, including crude oil, copper and gold. Also, the U.S. dollar index surged to a two-year high Monday, which is another bearish element for U.S. commodity markets, including the grains. The resilience seen in the grain futures Monday suggests significant underlying strength in those markets. You can bet the big speculative ‘fund’ managers also took note of Monday’s price action in the grains. Don’t be surprised to see the grain futures markets make another solid upside push in prices in the coming weeks, or sooner, led by the funds.”

On tap today:

     • U.S. durable goods orders for March are expected to rise 0.8% from the prior month. (8:30 a.m. ET)
     • S&P CoreLogic Case-Shiller 20-city home price index for February is expected to increase 19.2% from one year earlier. (9 a.m. ET)
     • Conference Board's consumer confidence index is expected to rise to 108.5 in April from 107.2 one month earlier. (10 a.m. ET)
     • U.S. new-home sales are expected to fall to an annual pace of 770,000 in March from 772,000 one month earlier. (10 a.m. ET)
     • Richmond Fed's manufacturing index is expected to fall to 10 in April from 13 one month earlier. (10 a.m. ET)

Biden administration is weighing swift action to ramp up global food assistance amid rising concern that Russia’s invasion of Ukraine is stoking a hunger crisis in many poorer nations. The White House is considering attaching a global food aid request to the military aid package for Ukraine to move the relief quickly. “I don’t know if it’d be that much, but we want money for food aid, yes,” Sen. Lindsey Graham (R-S.C.) said Monday when asked about the potential aid package. “The world food program is under siege, so we need to do something.”

Four in ten U.S. businesses plan to raise prices by 10% or more. About 40% of U.S. small businesses intend to raise selling prices by 10% or more amid decades-high inflation, according to a survey from the National Federation of Independent Business. The report suggests that many businesses are planning increases that are above the current rate of national inflation — the consumer-price index rose 8.5% in March, the most since 1981. 

Maersk, the world’s No. 2 container line, expects the strong ocean shipping market will continue this quarter and that global demand for all of 2022 will remain little changed from last year’s levels or possibly even decline. 

Ford’s all-electric Lightning pickup truck rolls off the assembly line today, as the company hurries to capitalize on EV momentum during one of the most vexing periods in years for the auto industry’s complex supply chain. Ford says it already has 200,000 reservations for this plug-in version of the F-150, long America’s bestselling vehicle. The company said it worked with battery maker SK Innovation to secure supplies to support a beefed-up production schedule, giving it a jump on rival GM, whose electric Chevrolet Silverado pickup is expected next year. 

Cry for Argentina… Argentina is struggling with nearly uncontrollable inflation, estimated at 55% over the past year. With money sitting in a banking account quickly losing value, Argentines drain their paychecks nearly as soon as they get them. 

Market perspectives:

     • Outside markets: The U.S. dollar index is higher amid weakness in most foreign rival currencies against the greenback. The yield on the 10-year U.S. Treasury note has eased to trading around 2.77% with global government bond yields broadly lower. Gold and silver futures are firmer, with gold around $1,904 per troy ounce and silver around $23.70 per troy ounce.

     • A half-percentage point interest rate rise is on the table for the Bank of Canada’s next policy meeting, its governor said.

     • Fidelity Investments plans to allow investors to put a bitcoin account in their 401(k)s, the first major retirement-plan provider to do so, according to the WSJ. Employees won't be able to start adding cryptocurrencies to their portfolios right away, but the 23,000 companies that use Fidelity to administer their retirement plans will have the option to put bitcoin on the menu this year.

     • Crude oil futures are moving ahead of U.S. trading, with U.S. crude around $99.60 per barrel and brent around $103.20 per barrel. Futures were higher in Asian action, with U.S. crude around $99.15 per barrel and Brent around $102.90 per barrel.

     • Oil has given up most of the gains since Russia’s invasion of Ukraine on Feb. 24 following a tumultuous period of trading. The war has led to the U.S. and U.K. banning Russian crude imports, while the European Union is considering similar measures as the conflict continues.

     • CME Group will reset daily trading limits on May 2. CME Group announced some price limits for grains and oilseeds would be reset starting May 1 for the trade date of May 2, 2022. This is part of the usual semi-annual review of limit resets that occurs on May 1 and Nov. 1. Daily corn limits will change from 35 cents per bu. to 50 cents, with the new expanded limit moving to 75 cents. Soybean future limits will increase to $1.15, up from 90 cents with a $1.75 expanded limit. The daily limit for SRW and HRW wheat futures will drop 15 cents from the current level to 70 cents with expanded limits of $1.05. The soyoil limit would increase from 40 cents per pound to 50 cents with a 75-cent per pound expanded limit. Soymeal futures will increase from $25 per ton to $30 per ton with a $45-per-ton expanded limit.   

     • Corn traders closely watching the weather. U.S. corn seeding will be pushed to a narrow window for optimal seeding time. If the crop seeding is delayed, the chances of gaining corn acres will go down, says grain analyst and trader Richard Crow.

     • Lack of rail cars impacting ethanol production. Renewable Fuels Association says some ethanol suppliers have cut production because of the lack of rail cars for transport.

     • Reuters: Indonesian government warns export ban on RBD palm olein could be expanded. Indonesian government officials Tuesday told industry representatives the ban on exports of RBD palm olein could be expanded if there are domestic shortages of refined palm oil and crude palm oil, with Reuters reporting that a senior government official Musdhalifah Machmud verified what had been presented to the industry. This confirms a report we had on the topic on Monday. RBD palm olein accounts for about 40% of Indonesian palm oil product exports, according to industry estimates, with exports of all palm oil products bringing in some $2.5 billion to $3 billion per month, Reuters said. Some quoted by the news service indicated that since the initial ban that starts Thursday (April 28) is narrower than was expected, it could remain in place longer. Machmud said that the country was seeking to get the bulk cooking oil price in the country down to 14,000 rupiah per liter, but she did not indicate whether the export limit would be lifted once that price was hit. Current prices are put at around 20,000 rupiah per liter. The saga relative to the export ban has been shifting as more information has been made available and most believe that the impacts to Indonesia’s economy from cutting off that pipeline of foreign exchange argue for the limit to be temporary in nature.

     • Ag trade: Turkey tendered to buy 210,000 MT of milling wheat from unspecified origins. 

     • NWS weather: Showers and thunderstorms expected along the East Coast and South Texas today near a progressing cold front... ...Developing low pressure system to impact New England with rain and higher elevation snow beginning tonight... ...Well below average temperatures forecast between the northern Plains and Northeast over the next several days. 

Items in Pro Farmer's First Thing Today include:

     • Corn and spring wheat extend gains, soybeans and winter wheat rebound
     • Big drop in already poor HRW CCI rating
     • Canadian acreage intentions out today
     • Ukrainian grains slowly arriving at Romanian Black Sea port (details below)
     • India ready to ship more wheat, if allowed
     • Consultant raises Argentine soybean crop peg
     • Rough start to the week for cattle market
     • Cash hog index firms, pork cutout weakens

— Summary: Russia renewed its attacks on Ukraine’s infrastructure, striking at least five railroad stations in the west with missiles. The country’s railroad director said there had been casualties but released no details. Meanwhile, Russian Foreign Minister Sergei Lavrov warned that there’s a “serious” danger of nuclear conflict — just one week after he said Moscow was committed to avoiding the use of nukes. Lavrov said on state television that he regards NATO as engaging in a “proxy war” by providing weapons to Ukraine. In Germany Lloyd Austin, the American defense secretary, will host talks with more than 40 countries on providing more arms to Ukraine. The secretary-general of the United Nations is due to meet Vladimir Putin, Russia’s president, in Moscow today.

• Chancellor Olaf Scholz’s government will allow delivery of 50 Gepard anti-aircraft tanks to Ukraine in Germany’s first step to supply heavy weapons to counter Russian forces.
• The European Union is considering implementing a price cap for Russian oil as it explores new sanction options, the Financial Times reports. 
• Nuclear power could help Europe reduce its reliance on Russian energy, but the projects face delays in coming online. Link top details via the NYT.
   

— Market impacts:

• Russia’s economy can still work in a stable manner, Russian President Vladimir Putin said, despite “unprecedented pressure” from Western sanctions.
• Ukrainian grains slowly arriving at Romanian Black Sea port. Around 80,000 MT of Ukrainian grain is currently in the Romanian Black Sea port of Constanta, with another 80,000 MT “approved and en route,” according to the port’s manager. The port has storage capacity for about 2 MMT of grains. Romania earlier this month said it plans to re-open a Soviet-era train track at its port of Galati on the Danube River, which would help speed up Ukrainian grain transports. It was unclear when the track, which needs repair work, would reopen. Meanwhile, as Ukrainian farmers press ahead with fieldwork during the war, they’ll soon be grappling with a fresh problem: where to stash the next harvests. Russia’s invasion began during a peak period for Ukraine’s corn exports, which has left a hefty volume of grain stuck on farms as ports closed.
• Asian oil refiners are shunning a major export grade from the Russian Far East due to sanctions on a tanker company that ships the cargoes. Buyers are now trying to back out of purchases of Sokol, which was sold out for May loading two weeks ago, Bloomberg reports.

— Railroad (mis)management in focus today, Wednesday. The conflict over a management strategy known as precision scheduling is expected to come to a head today, the first of a two-day hearing of the Surface Transportation Board (STB), where shippers and rail employees will lay out their grievances.

     Shippers plan to make the case that service degradations drive up costs, hurt sales and affect their operations. The testimony could help persuade regulators to streamline rate disputes and allow shippers to compel a railroad to switch freight to a competing rail when feasible, an issue the board has taken up this year.

     Greg Regan, president of the Transportation Trades Department, AFL-CIO, plans to tell the board to forcefully apply service requirements and that if the panel needs additional authorities, then it “should promptly make this known to Congress,” Bloomberg reports, citing his written statement. “The freight rail network that this Board oversees is in a state of disarray,” Regan said in the written statement for the hearing. “It is incumbent on the Board to take aggressive and immediate action to rectify these trends in freight rail service, and rail labor looks forward to being part of that process.”

     Railroad executives say that the pandemic is to blame for derailing service. Meanwhile, companies have struggled to hire as the spirit of the Great Resignation sweeps across the U.S., Jim Foote, CEO of CSX, said in an interview.

     The first panel of witnesses at the STB hearing will include Transportation Secretary Pete Buttigieg, along with USDA Deputy Secretary Dr. Jewel Bronaugh, and Federal Maritime Commission chief Carl W. Bentzel.

— The Senate Monday advanced the nomination of Lael Brainard to be vice chairwoman of the Federal Reserve Board of Governors, setting up a final confirmation vote scheduled for today. The Senate voted to invoke cloture, or cut off debate, on her nomination yesterday by a 54 to 40 vote. The Senate will vote Tuesday on whether to confirm Brainard to the role. Senators this afternoon may also invoke cloture on Lisa Cook’s nomination to the Fed; if confirmed she’d be the first Black woman to serve on the Board.

     President Joe Biden‘s nominations of Jerome Powell to be Fed chair and economist Philip Jefferson to join the board are still pending after being approved by the Senate Banking Committee and could come to the floor later this week.

— Ukraine ambassador nominated. President Joe Biden yesterday nominated Bridget Brink, the current ambassador to Slovakia, as the next ambassador to Ukraine. Brink, who must be confirmed by the Senate, would fill a post that has remained vacant since 2019.

— Beijing continues its mass coronavirus testing for nearly 20 million residents in most of Beijing as authorities race to contain a fresh Omicron outbreak that has sparked panic buying as citizens fear a mass lockdown is imminent. Dozens of residential compounds across eight districts in Beijing are already under strict lockdowns, in which residents are banned from leaving their homes or community grounds.

— China’s central bank said it would intensify its support of the economy, and especially small businesses, as Covid-induced lockdowns threaten growth. The People’s Bank of China also promised more funds, via relending programs, to the coal and aviation sectors.

— Big retailers are dodging tariffs using the customs rule that grants American tourists duty-free purchases. The “de minimis” rule lets U.S. retailers selling Chinese imports — and Chinese companies selling directly to U.S. consumers —a void tariffs on goods as long as they are packaged and addressed to individual buyers and fall below the $800 cap, the Wall Street Journal reports (link). The value of covered imports rose past $67 billion in 2020 — from an estimated $40 million in 2012 — as e-commerce grew, Congress raised the cap from $200 and higher Trump administration tariffs increased the incentive to dodge. More than a tenth of Chinese imports by value arrive as de minimis shipments, Customs data indicates, compared with well under 1% a decade ago.

— Court decision sets June 3 deadline for EPA to finalize RFS levels. A consent decree approved by the U.S. District Court for the District of Columbia has EPA committing to June 3 as the deadline to finalize its 2021 and 2022 Renewable Fuel Standard (RFS) levels. The action would also include the 2020 RFS levels as EPA has taken the action to do all three years — 2020, 2021 and 2022 — in one rulemaking. The decree stated that no later than June 3, EPA is to sign the final rule for the RFS obligations. However, the decree also stated that the deadline could be extended if the parties involved can show “good cause” for such a delay.

     EPA will also have to put forth a notice in the Federal Register for public comment on the consent decree. So far, there has been no action showing in official channels on EPA submitting its final rule on the 2020, 2021 and 2022 RFS levels to the Office of Management and Budget (OMB) for review, presumably still a necessary step in the regulatory process on this matter.

     Also pending is the separate proposal from EPA to deny all pending small refinery exemptions (SREs) under the RFS, totaling more than 60 covering several compliance years. The rejection of 36 SREs for the 2018 compliance year has upped expectations that remaining SREs could also be rejected.

— More than 40 companies are calling on Congress to adopt federal energy legislation to provide additional financial incentives for clean-energy projects like wind turbine farms and solar installations. In a letter to lawmakers, the companies — including consumer-facing brands such as Airbnb, Lyft Inc., Sierra Nevada Brewing Co. and IKEA — say that federal spending for such projects would help lower energy costs for U.S. businesses, along with their employees and customers. They called for federal tax credits for developers and suppliers of major wind, solar, nuclear and energy storage projects, as well as for electric vehicles and charging station tax credits, which could benefit company-run fleets. Opponents countered that federal lawmakers shouldn't use tax credits to pick winners and losers in the U.S. energy sector.

— BLM reverts to 2013 controls on National Petroleum Reserve-Alaska. The Bureau of Land Management (BLM) announced it will mostly revert to a set of environmental rules on the National Petroleum Reserve-Alaska (NPR-A) that were in place in 2013 prior to adjustments made by the Trump administration. The new plan would reset the leasable land in the NPR-A to 52%, lowering it from the 82% level that had been put in place by the Trump administration. BLM said the NPR-A will be managed consistent with the 2013 plan, BLM noted, “while including certain more-productive lease stipulation and operating procedures for threatened and endangered species.” The action follows a pattern of actions relative to fossil fuels that are being taken by the industry as restricting the potential expansion of domestic oil and gas production.

— Biden administration drone proposal coming. The Federal Aviation Administration would get new authority to impose fines for drone-related technology that interferes with airports and the national airspace under a new White House legislative proposal. The Biden administration’s proposal sent to lawmakers and obtained Monday by Bloomberg Government would allow airport and critical infrastructure officials to forgo prior consent to track and monitor drones if they put facilities at risk. The head of the FAA would be able to act against the misuse of drone mitigation systems and interference with the airspace, including imposing as much a $25,000 fine per violation, under the proposal. The Homeland Security Department, the Justice Department, and state and local law enforcement would also have authority to disrupt and seize drones, according to the proposal.

— Biden administration to phase out incandescent lightbulbs, reversing Trump policy. The new Energy Department rules, which were finalized Monday evening, expand energy-efficiency requirements to more types of lightbulbs and ban the sale of those that produce less than 45 lumens per watt — a measure of how much light is emitted for each unit of electricity. The regulations will eventually prohibit most incandescent and halogen lightbulbs in favor of compact fluorescent and LED bulbs.

— Four additional commercial flocks confirmed with HPAI. USDA’s Animal and Plant Inspection Service (APHIS) confirmed highly pathogenic avian influenza (HPAI) in four additional commercial flocks including one in Lancaster County, Pennsylvania (50,300 commercial broilers) and three in Minnesota — 27,300 turkey meat birds in Otter Tail County; 127,400 turkey meat birds in Swift County; and 46,000 turkey meat birds in Yellow Medicine County. USDA said that now 155 commercial flocks have been infected. APHIS also noted they have now released 34 farms.

— ASF vaccine update. The U.S. pork industry has been focused on developing a vaccine for African swine fever (ASF), investing public and private funds to protect domestic herds from the deadly disease. Some updates, according to NPPC:

     • USDA announced an ASF vaccine candidate passed an important safety test required for regulatory approval as it does not revert to its normal virulence. This moves the vaccine candidate one step closer to commercial availability and testing in Vietnam.
     • NPB is investing $930,000 of Pork Checkoff funds in four different studies that include validating vaccine types, tracking efficacy or effectiveness, and ensuring viability for commercialization.
     • Genvax Technologies received a $145,000 grant from the Foundation for Food & Agriculture Research to develop a self-amplifying messenger RNA vaccine for ASF. Genvax contributed matching funds for a total investment of $290,000.
     • Purdue University received a $1 million grant to create a rapid test for ASF. The grant was awarded by the National Animal Health Laboratory Network and the National Animal Disease Preparedness and Response Program.

USDA 2022 food price inflation forecasts already at 14-year high. USDA forecasts for consumer food price inflation were increased again this month, with all food prices now seen rising 5% to 6% (4.5% to 5.5% in March) and grocery store prices expected to rise 5% to 6% (4.5% to 5.5% in March) while the forecast increase in restaurant prices was held at 5.5% to 6.5%. Taking the midpoint of USDA’s forecast ranges, all food price inflation would be the highest since it was 5.5% in 2008 with food at home (grocery store) inflation also the highest since 2008 when it was up 6.5% from the prior year. The 20-year average for food price increases at 2.4% for all food, 2.9% for restaurant prices and 2.0% for grocery store prices means the current outlooks are for costs that are at least double those averages.

     Changes versus month-ago levels. The Consumer Price Index (CPI) for all food increased 1% from February 2022 to March 2022, and food prices were 8.8% higher than in March 2021. The food-away-from-home (restaurant purchases) CPI was 6.9% higher than March 2021 while food at home (grocery store) prices were 10% higher than one year ago in March. Factors causing the increased food price inflation, according to USDA, will be upward price pressures from the Ukraine conflict but downward price pressure from recent increases in interest rates by the Fed. “The situations will be closely monitored to assess the net impacts of the concurrent events on food prices as they unfold,” USDA said.

     HPAI impacts. Confirmation of highly pathogenic avian influenza (HPAI) in the US since earlier this year has had an impact—albeit modest—on egg prices, according to USDA. “Egg prices increased by 1.9% in March 2022, following a 2.2% increase in February,” USDA detailed. “An ongoing outbreak of highly pathogenic avian influenza could contribute to poultry and egg price increases through decreased supply or prices could be reduced by a drop in international demand for U.S. poultry.” USDA now sees egg prices rising 6% to 7% in 2022 versus 2021, a big jump from their month-ago outlook that egg prices would be up 2.5% to 3.5%. USDA initially expected 2022 egg prices to be down 0.5% to up 0.5%.

     Meat, other price increases. While wholesale beef prices decreased by 3.6% in March 2022, USDA noted retail beef prices increased by 1%. “Wholesale pork prices, along with port congestion, contributed to a 1.4% increase in retail pork prices in March 2022,” USDA said. Their outlook is for beef and veal prices to rise between 6% and 7% in 2022 (3% to 4% prior), with pork prices seen rising 4% to 5% (3% to 4% prior) and other meat prices are expected up 3.5% to 4.5% (2.5% to 3.5% prior). USDA initially expected beef and veal and pork prices to be up 2% to 3% in 2022. Retail poultry prices are seen up 7.5% to 8.5% in 2022 (6% to 7% prior) in part as cold storage data indicates historically low stocks of frozen poultry. USDA initially expected poultry prices up 1% to 2% in 2022. Fats and oils prices are predicted to increase between 8% and 9% in 2022, up from their prior expectation those prices would increase 6% to 7%. Those prices were expected to be up 1.5% to 2.5% in USDA’s initial outlook. Dairy prices are now seen up 6% to 7% in 2022 compared with 2021, up from 4% to 5% in March. USDA started its 2022 expectations for dairy product prices to be down 0.5% to up 0.5%.

     More food price forecast hikes ahead. Given that food price inflation on a monthly and annual basis has not eased, look for USDA to continue increasing their forecasts ahead. In 2008, the last time food price inflation was as high as the midpoint of the current outlook, USDA increased their forecasts each month in March, April and May, with a final increase in August. Similarly, their outlook for grocery store prices increased in March, May and August.

     For 2022, USDA has already increased its forecast for all food price inflation in February, March and April, after starting from a level of 2% to 3% in July 2021. For grocery store prices, the current 5% to 6% increase is from increases in February, March and April after the agency initially expected grocery store prices to increase just 1.5% to 2.5%.

     For restaurant prices, USDA’s 5% to 6% forecast is up from an initial expectation for increases to be 3% to 4%, with the forecast range rising in January, February and March.

     History suggests USDA may arrive at its final outlooks for all food and food at home prices in August. But that would depend on food price inflation data not continuing to build as we move through the balance of 2022. Typically, USDA’s forecasts for all food and grocery store prices stay steady in September-December. Restaurant prices, however, are subject to later upward revisions with the final increase coming in November or December.

— Summary: Global cases of Covid-19 are at 510,286,262 with 6,221,232 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 81,043,362 with 991,609 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 572,829,658 doses administered, 219,370,557 have been fully vaccinated, or 66.58% of the U.S. population.

— Biden administration to announce more Covid treatments to be made available. A plan is expected to come from the Biden administration today to allow for more infected people to get Covid treatments and expand access to pills like Pfizer’s Paxlovid and the Lagevrio pill from Merck and Ridgeback Biotherapeutics. Both were cleared in December by the Food and Drug Administration (FDA). The administration is expected to announce it will double the level of outlets from the current 20,000 where the pills are available. The effort is also expected to include expanding test-to-treat sites from the current 2,200 locations to additional communities.

— Blinken, Garland testify on budget. Committees will continue hearings on the Biden administration’s fiscal 2023 budget request today including Blinken before Senate Foreign Relations members and Attorney General Merrick Garland before the Senate Appropriations Commerce-Justice-Science Subcommittee. Blinken has just returned from a weekend visit with Ukrainian President Volodymyr Zelenskyy, and that will be the key focus for lawmakers. USDA Secretary Tom Vilsack will be in front of the House Appropriations Committee Thursday at 10 a.m. ET. EPA Administrator Michael Regan will be in front of the House Appropriations Committee Friday at 9 a.m. ET.

— Judge blocks Biden attempt to halt Title 42. A federal judge in Louisiana has temporarily blocked the Biden administration from ending a Trump-era pandemic restriction on the U.S./Mexico border that allows authorities to turn migrants back to Mexico or their home countries. The public health authority, known as Title 42, was on track to end on May 23. More than 20 states had asked the court to block the administration from ending the restriction and last week asked the court to immediately intervene.

     Meanwhile, the Supreme Court today will hear arguments over the Biden administration’s effort to end a controversial Trump-era immigration measure that requires asylum-seekers at the southern border to stay in Mexico while their applications are processed. The ruling in Biden v. Texas will determine whether the Biden administration must continue the policy – which remains in effect — despite the Department of Homeland Security’s (DHS) conclusion that the measure “is not in the United States’ national interest.”

— Twitter accepted Elon Musk’s roughly $44 billion takeover bid. The two sides worked through the night to hash out a deal in which the Tesla chief executive, who is one of Twitter’s most influential users, plans to take the social-media company private. The agreement, which was unanimously approved by Twitter's board, is expected to close later this year pending approval from shareholders and regulators. In a statement yesterday, Musk reiterated his proposed changes for the platform, including his goal to bolster free speech. He said in a tweet that he hopes "even my worst critics remain on Twitter, because that is what free speech means." Jack Dorsey, the site’s founder and former CEO, endorsed the purchase. Musk’s deal to buy Twitter includes a provision that the billionaire is required to pay the company a fee if he were to walk away or the deal falls apart, according to people familiar with the matter. The deal comes amid calls for greater accountability for large social-media platforms. White House press secretary Jen Psaki said: “No matter who owns or runs Twitter, the president has long been concerned” about the power of social-media sites. Twitter reports earnings on Thursday. The Financial Times today reports that Brussels has warned Musk that Twitter must comply with the EU’s new digital rules under his ownership, or risk hefty fines or even a ban, setting the stage for a global regulatory battle over the future of the social media platform.