Covid Aid/Omnibus Spending Package Completed; President Trump Will Sign into Law

Posted on 12/22/2020 8:00 AM

More details of Covid aid, omnibus spending packages | Vilsack getting more focus

 


In Today’s Updates


 

Market Focus:
• Choppy market action expected ahead as traders depart for holiday break
• Iron ore surging toward a record high
• Palm oil climbs as strong shipments outweigh Malaysia export tax increase to 8%
• Soybean futures in Chicago climbed to strongest level in more than six years
• Commodities among first to benefit from possible booming recovery in 2021
• Tyson, misled by supplier, overstated live cattle inventory
• Container shipping showing signs of fatigue
• Consultant keeps South American crop estimates unchanged

• Argentina port strike may impact Brazilian wheat imports

• Ukraine plans changes to grain export regs

 

Policy Focus:
• Congress clears aid, omnibus spending measure
• Links to Covid aid, omnibus spending details
• USDA: CFAP payments via Covid aid package to come in 2021
• CFAP 2 payments clear $12.8 billion
• Highlights of USDA’s FY 2021 appropriations
• Water Resources Development Act 2020
• USDA moving forward with bringing GMO animals under USDA reg umbrella

 

U.S./China update:
• China reacts to U.S. stimulus/spending package
• China policymakers: Beijing will continue ‘necessary support’ for economy  
• Australia’s dispute with China over barley exports is under way at WTO
• China issues first round of crude oil import quotas for 2021
• North Korea’s trade with China has collapsed in recent months
• China soy imports to be record in 2020: COFCO official
• China sells all corn put up for auction

 

Trade Policy:
• Covid aid package includes technical fixes to the USMCA

 

Energy & Climate Change:

• Carbon capture deal part of congressional package
• Indonesia will allocate 9.2 million kiloliters of unblended biodiesel in 2021


Food & beverage industry update:
• Quiet month for USDA food price forecast
• ProPublica looks at severe Covid-19 outbreak this past spring in Waterloo, Iowa
• JBS ordered to test workers for Covid from Brazil’s Seara plant
• U.K. bracing for potential food shortages


Coronavirus update:
• Update on rapid spread of new variant of coronavirus in Britain

 

Politics & Elections:
• Barr said he would not appoint a special counsel to investigate Hunter Biden
• It wasn’t only Latino neighborhoods that swung toward Trump this year
• Biden adds a Warren confidant to his economic team; others unveiled
• McConnell: Senate will hold hearings on Biden’s Cabinet picks after Georgia election.

• Vilsack for Biden USDA secretary concerns progressive groups, small farmers
• Wednesday deadline for Trump to veto National Defense Authorization Act


Other Items of Note:
• Statue of Robert E. Lee removed from the Capitol in Washington, DC
• Highest ranking Treasury officials hacked
• Barr announces charges against Lockerbie suspect.
• Trump’s border wall to get $1.4 billion
• JCPOA countries reaffirm commitment re: Iran nuclear deal
• DACA challenge
• Lead rule

 


MARKET FOCUS


 

Equities today: Futures tied to the S&P 500 wavered between gains and losses today, suggesting choppy action ahead. Global stock markets were mixed overnight, with Asian shares mostly down and European shares mostly firmer. The Hang Seng Index fell 187.43 points, 0.71%, at 26,119.25. The Nikkei was down 278.03 points, 1.04%, at 26,436.39. European equity markets are seeing a recovery, with the Stoxx 600 was recently up 0.9% with regional markets seeing gains up to 1.1%.

 

     U.S. equities yesterday: The Dow managed to eke out a gain of 37.40 points, 0.12%, at 30,216.45. The Nasdaq, however, fell 13.12 points, 0.10%, at 12,742.52. The S&P 500 was down 14.49 points, 0.39%, at 3,694.92.

 

On tap today:

 

     • Retail sales: Weekly Goldman Sachs and Johnson Redbook retail sales reports
     • Third estimate of third-quarter GDP. Update: U.S. third quarter GDP rose 33.4%, vs 33.1% expected.
     • Richmond Fed business survey
     • Existing home sales
     • Consumer confidence index

 

Market perspectives:

 

     • Outside markets: The U.S. dollar index is higher in early U.S. trading on a corrective rebound after hitting a 2.5-year low last week. February Nymex crude oil futures prices are lower and trading around $47.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading around 0.938%.


     •  Pressure on crude oil has continued after Monday losses. U.S. crude is trading around $47.50 per barrel and Brent around $50.50 per barrel. Crude prices lost ground in Asian trading, with U.S. crude down 27 cents at $47.70 per barrel while Brent crude was down 23 cents at $50.68 per barrel.

 

     • Iron ore is surging toward a record high as a fatal landslide at a Brazilian iron-ore mine intensified concerns about supply.

 

     • Palm oil climbs as strong shipments outweigh Malaysia export tax increase to 8%. Malaysia Dec. 1-20 palm oil exports to India 209,433 tons: SGS.

 

     • Soybean futures in Chicago climbed to the strongest level in more than six years due to continuing strikes and dry weather in Argentina, the world’s biggest exporter of soy products.

 

     • Commodities are likely to be among the first to benefit from what could be a booming recovery in 2021 after a dismal year of public health and economic crises, according to an article in the Los Angeles Times (link).

 

     • Tyson, misled by supplier, overstated live cattle inventory. Tyson Foods Inc. said a cattle supplier misrepresented how many animals it bought on behalf of the company, causing the biggest U.S. meat producer to overstate livestock inventory by $285 million. The unidentified vendor accounted for about 2% of cattle supplied to Tyson’s beef unit in fiscal years 2017-2020, the Springdale, Arkansas-based company said in a regulatory filing on Monday after the market closed. Tyson doesn’t believe the error had a material impact on financial statements for those years, and any revisions in or before 2016 “would be inconsequential.” It added that this is an early conclusion that could change depending on a company review.

 

     • Container shipping is showing signs of fatigue as the pandemic descends into its darkest days. Just 50% of container vessels arrived on time in November, down from 80% a year earlier and the lowest level in records dating back to 2011, according to a service reliability index compiled by Copenhagen-based Sea-Intelligence.

 

        Shipping lag

Items in Pro Farmer's First Thing Today include (Link to subscribe to FTT):

     • Consultant keeps South American crop estimates unchanged
     • Argentina port strike may impact Brazilian wheat imports
     • Ukraine plans changes to grain export regs

 


POLICY FOCUS


 

—  Congress clears aid, omnibus spending measure. The Senate voted 92-6 late Monday to approve both the $892 billion coronavirus aid (link to summaries), linked with a $1.4 trillion spending bill that will fund the government through September. The 5,593-page package passed the House earlier Monday evening in a 359-53 vote. The bill now heads to the White House, where President Trump is expected to sign it into law, though it could take a few extra days to get the paperwork ready.

 

     Democrats: Down payment. House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) said they would press to pass more assistance next year, when President-elect Joe Biden is in office. To get a compromise agreement, congressional leaders agreed to drop both funding for state and local governments, which Democrats had sought, as well as liability protections for entities operating during the pandemic, a top GOP priority.

 

     President-elect Joe Biden praised the bipartisan agreement but said it wouldn’t be enough to get the country back on its feet.

 

     Treasury Secretary Steven Mnuchin said Monday the first batch of payments could go out at the beginning of next week. “We couldn’t be more pleased,” Mnuchin told CNBC Monday. “It took us too long to get here.” About $166 billion in direct aid could be sent to Americans as soon as next week.

 

     Link to ag sector-related items in the Covid relief package.

 

    Note: USDA sources said CFAP-related payments via the just-cleared Covid aid package would be made in 2021.

 

     The Covid aid legislation allows USDA to send money to biofuel producers, cotton textile mills, timber harvesters and haulers. The funds can also be tapped to provide loans or grants to certain processors, distributors, farmers markets, seafood vessels and other operations to expand safety measures for their workers.

 

     The relief package will set up a second round of stimulus payments to individuals that will be smaller than the $1,200 and $500 payments approved in the spring. The payments start phasing out when individual adjusted gross income exceeds $75,000, when head-of-household income exceeds $112,500, and when income for married couples filing jointly exceeds $150,000. Mixed-status households — where some members have Social Security numbers, but others don’t — would be eligible for partial payments, unlike the first round, when they were excluded. This change is retroactive, so these households can claim an amount for the first payment as part of their 2020 tax returns. Dependents over the age of 16 wouldn’t qualify, just as in the first round of stimulus payments.

 

     Besides adding $300 in unemployment benefits for 11 weeks, lawmakers extended two other unemployment programs until they begin phasing out in mid-March and end in early April. Those two programs expand the pool of people eligible for unemployment benefits and extend their duration. Lawmakers also included $1.8 billion in tax credits for businesses to provide paid leave.

 

     Some $284.5 billion would go toward the Paycheck Protection Program (PPP), the bulk of the $325 billion the bill puts toward small businesses. Businesses that received PPP loans would be able to deduct expenses associated with those loans. That move would overturn a Treasury Department decision that denied the deductions. PPP. Provides $284.5 billion dollars to reopen and strengthen the PPP for first time and second time borrowers.  PPP loans will be reserved to businesses with less than 300 employees that also sustained a 25% loss in revenue. Maximum loan amounts will be limited to $2 million.  Loans under $150,000 will have a simplified application.  The package also creates a specific farmer and rancher calculation. Link for more details.

 

     EIDL. Provides $20 billion dollars to restart and extend the SBA’s EIDL Advance Grant for small businesses in low-income communities.  Also allows businesses that applied for past EIDL loans of less than $10,000 to apply for the difference up to the $10,000 maximum loan amount.

 

     PPP, NOL and EIDL Tax Provisions. Allows farmers who elected a two-year net operating loss carryback prior to the CARES Act to elect to retain that two-year carryback rather than claim the five-year carryback provided in the CARES Act. This section also allows farmers who previously waived an election to carry back a net operating loss to revoke the waiver. Extends certain deferred payroll taxes through 2021. Clarifies PPP tax regulations including: gross income will not include PPP forgiveness, and deductions are allowed for otherwise deductible expenses paid for by PPP forgiveness amounts.  Emergency EIDL grants will not count as gross income. Link for details.

 

     Tax extenders for biofuels. Excise tax credits for alternative fuels and the income tax credits for biofuels under section 40 of the tax code would be extended. The $1.01 per gallon credit for second generation biofuel is scheduled to expire at the end of December 2020 but would be extended for another year under the new bill.

 

     Broadband. $7 billion to expand broadband access, including a $300 million broadband deployment program at NTIA to support broadband infrastructure deployment to unserved areas, prioritizing unserved areas and areas that are more rural. The package also fully funds the Broadband DATA Act which directs the Federal Communications Commission to collect more granular broadband coverage data and develop a broadband map depicting the availability of broadband services throughout the country. 

 

     Theater operators and owners of small performance venues would be eligible for $15 billion in grants, and the bill provides $15 billion for airline payroll support. Schools would receive $82 billion under the agreement, and $10 billion would go toward child care.

 

     The package includes $25 billion in rental assistance, extends a moratorium on evictions and approves $13 billion in funds for food-stamp and child-nutrition benefits and $13 billion in ag sector aid.

 

     The measure increases the amount of money aimed at combating the Covid virus, adding $30 billion for the vaccine’s procurement and distribution of a vaccine, as well as $22 billion for testing and tracing.

 

     The White House won a tax break Trump had been seeking all year: the ability for businesses to deduct restaurant meals during 2021 and 2022.

 

     The bill will extend a tax credit for retaining employees and make it available to PPP recipients, and includes several other tax provisions.

 

     The legislation includes some new stipulations around the Federal Reserve, which in March announced lending programs to keep credit flowing to large companies and cities and states. Days later, Congress provided $454 billion for the Treasury Department to cover losses in the Fed’s lending programs. The bill will revoke the remaining funding previously provided to the Treasury Department to backstop losses in Fed lending programs, and the Fed wouldn’t be able to replicate identical emergency lending programs next year without congressional approval. But the Fed would retain its ability to set up similar emergency-lending programs without congressional approval.

 

     The measure includes a ban on surprise medical bills from doctors who people didn’t realize were outside their insurance networks.

 

     The bill also includes funding for two new Smithsonian museums, one focusing on Latino-Americans and one on women. The spending measure could punish illegal streamers for up to 10 years and calls it a 'clear abuse' if or any other country interferes with Tibet's process for recognizing its next Dalai Lama. The package also decriminalizes unauthorized uses of Smokey Bear, gives tax breaks to racehorse owners and bans the U.S. Postal Service from handling e-cigarettes.

 

    The spending package has language to phase down hydrofluorocarbons, or HFCs, a climate-warming refrigerant, by 85% by 2035, which would be one of the most significant emissions-reducing measures ever passed. It is the only major bill in recent memory that directly sets out reductions in a specific greenhouse gas. HFCs account for a small percentage of greenhouse gases in the atmosphere but are considered more powerful than carbon dioxide.

 

     Comments: A growing number of U.S. voters are criticizing the latest congressional activity, with several noting Congress provided more funding for two new Smithsonian museums and foreign aid versus their scaled-back stimulus checks, even though the topics being complained about is part of a massive $1.4 trillion spending package as opposed to the Covid aid relief measure.

 

— Highlights of USDA’s FY 2021 appropriations. House and Senate appropriators would boost discretionary funding for agricultural research and expansion of broadband service to unserved areas in a fiscal 2021 spending bill with a top line of $23.4 billion.

 

     Appropriators significantly increased mandatory spending, to $114 billion, for the Supplemental Nutrition Assistance Program (SNAP/food stamps) to meet a sharp increase in demand spurred by an economy weakened by Covid-19 job losses and the costs for changes to the program that expand its reach. Of the amount, $101.8 billion is for benefits only. Enrollment has climbed from 34 million people to 43 million, according to the most recent data. In fiscal 2020, SNAP received $67.8 billion. The Trump administration’s fiscal 2021 request for the program called for $180 billion in cuts over 10 years.

 

     The fiscal 2021 spending bill for USDA and Food and Drug Administration is part of a $1.4 trillion, 12-bill omnibus package attached to a $900 billion coronavirus relief bill that also includes several unrelated bills and provisions like tax extenders.

 

     Key links to appropriations documents:

     Link to the explanatory statement for the Agriculture title.
     House Democrats' summary is here.
     Senate Appropriations Committee summary of the Agriculture title is here.
     Summary from Senate Appropriations ranking member Patrick Leahy (D-Vt.), is here.

 

     The fiscal 2021 USDA and FDA discretionary funding is $217 million above the fiscal 2020 enacted level. The administration had requested $21.8 billion for fiscal 2021. The bulk of the funding of discretionary funding in the spending bill goes to USDA with the Food and Drug Administration receiving $3.2 billion. The agency’s total budget would be $5.9 billion with the addition of $2.7 billion in user fees. The bill provides a $22 million increase for medical product safety and $8 million increase for food safety. The administration requested $3.3 billion in discretionary funding and $2.9 billion in use fees for fiscal 2021.

 

— CFAP 2 payments clear $12.8 billion. Payments under the Coronavirus Food Assistance Program 2 (CFAP 2) totaled $12.83 billion as of Dec. 20, with 872,365 applications approved.

 

     Acreage-based payments remain the largest at $6.13 billion, followed by livestock at $3.37 billion, sales commodities at $2.12 billion, dairy at $1.16 billion and $51.3 million for eggs/broilers.

 

     Payments for five commodities of $1 billion or more: Corn ($3.34 billion), cattle $2.76 billion), sales commodities ($2.04 billion), soybeans $1.28 billion), and milk ($1.16 billion).

 

     Meanwhile, USDA has forwarded a final rule on CFAP to the Office of Management and Budget for review. It is not clear what is contained in that rule, but it could be any corrections or adjustments to policies put in place for CFAP 1 or 2. 

 

     Note: USDA sources said CFAP-related payments via the just-cleared Covid aid package would be made in 2021.

 

— Water Resources Development Act 2020. The omnibus also includes a biennial water infrastructure package that would authorize spending for dozens of Army Corps projects and studies across the country. Bipartisan negotiators agreed to a deal for unlocking and spending down the roughly $10 billion balance in the Harbor Maintenance Trust Fund, including allowing access to $500 million in appropriations to the Army Corps from the fund for the first year (fiscal 2021) to tackle the backlog in federal navigation maintenance work at the nation’s ports and harbors. The legislation provides an additional $100 million annually until it reaches $1 billion in year five and continues at that pace until the fund is drawn down.

 

—  USDA moving forward with bringing GMO animals under USDA reg umbrella. USDA announced it will move forward with an Advanced Notice of Proposed Rulemaking (ANPR) to solicit public input and feedback on a contemplated regulatory framework would bring the regulation of animal biotechnology under USDA. USDA’s plan would transition some of FDA’s pre-existing animal biotechnology regulatory oversight to USDA and the agency would consult with FDA on that front. 

 

     USDA said the ANPR will propose “a flexible, forward-looking, risk-proportionate and science-based regulatory framework that provides a predictable pathway to commercialization and keeps pace with advances in science and technology for certain farm animals (cattle, sheep, goats, swine, horses, mules, or other equines, catfish, and poultry) developed using genetic engineering intended for agricultural purposes.”

 

     OMB finished the review of USDA’s prerule on the matter Dec. 18. This appears to put to rest what is said to have been a tug of war between USDA and FDA on this regulatory issue.

 

     The National Pork Producers Council (NPPC) hailed the move and cited gene editing as a technology that can now move forward under plan put forth by USDA. “Today’s announcement is a big step forward for America’s farmers, who have weathered significant challenges over the past few years,” said NPPC President Howard “AV” Roth. “FDA regulation of gene editing will result in an impractical, lengthy and expensive approval process. Thankfully, that is not the administration’s intended plan. This announcement represents a critical milestone to ensuring American agriculture maintains its global competitive edge.”
 


U.S./CHINA UPDATE


 

— China reacts to the U.S. stimulus/spending package. China reacted angrily to some provisions in the mammoth spending plan approved in Washington that deal with Tibet and Taiwan and the Hong Kong Special Administrative Region. "Tibet, Taiwan and Hong Kong affairs bear on China's sovereignty and territorial integrity. They are purely China's internal affairs that brook no foreign interference," Foreign Ministry spokesman Wang Wenbin said at a briefing. "We urge the U.S. side to stop interfering in China's internal affairs, and not to sign into law or implement negative content and clauses in relation to China in relevant acts, so as not to further harm bilateral cooperation and the overall situation of China/U.S. relations," Wang said.

 

— China policymakers say Beijing will continue ‘necessary support’ for economy. China’s top policymakers have pledged to continue “necessary support” for the nation’s economic recovery and will make “no U-turn” when there are still many outlook uncertainties due to the coronavirus pandemic and the external environment, according to the Central Economic Work Conference that concluded on Friday. China will put its focus on eight tasks for the coming year, including strengthening strategic technological innovation, ensuring the control of supply chains and boosting domestic demand. “We must maintain the continuity, stability and sustainability of macro policies … and make policies more targeted and effective,” the official Xinhua News Agency reported, citing a statement after the group’s three-day meeting. “We must use the valuable time window to focus on reform and innovation — achieving a good start for the 14th five-year plan in terms of high-quality development.”

 

— Australia’s dispute with China over anti-dumping and anti-subsidy duties imposed on its barley exports is under way after the World Trade Organization (WTO) confirmed the complaint on Monday. The complaint was officially listed on the WTO website and circulated to all 164 members of the global trade body. China imposed a total tariff of 80.5% on Australia’s barley exports in May. In its filing, Australia claimed China deviated from WTO rules 26 times during its anti-dumping investigation, including improperly using third-party country sales to justify Australia had dumped cheap barley. “China did not determine export price on a reasonable basis when it improperly discarded the information provided by exporters and producers on the export price of barley and determined the export price by reference to third-party information,” the complaint said. Australia also alleged China’s approach “appears to be” inconsistent with its obligations under WTO anti-dumping rules, including failing to fully examine the accuracy of the provided in the investigation.

 

     “China has always carried out trade remedies in a manner consistent with WTO rules. We regret that Australia has initiated a dispute, but we will seek to resolve the matter in accordance with the WTO dispute settlement procedures,” said commerce ministry spokesman Gao Feng when acknowledging the complaint last week. After an 18-month investigation, China imposed a total tariff of 80.5% on Australia’s barley exports in May, made up of an anti-dumping duty of 73.6% and a countervailing or anti-subsidy levy of 6.9%, rendering Australian barley exports uncompetitive in China.

 

— China issues first round of crude oil import quotas for 2021. China has issued the first round of crude oil import quotas for 2021 for non-state companies, setting it at 122.59 million tonnes, up 18% from the first round for 2020. China previously signaled an increase was on tap, stating in November it would be boost the non-state crude import quotas for 2021 to 243 million tonnes, up 20%. Data released by Reuters showed non-state crude import quotas for 2 million tonnes or more were allocated in a range of 2 million tonnes for Dragon Aromatics to 14 million tonnes each for Hengli Petrochemical and Zhejiang Petrochemical.

 

— North Korea’s trade with China has collapsed in recent months, according to official data from China’s customs office cited in the Wall Street Journal (link). Trade in October was worth just $1.7 million, a 99% drop based on the same month in 2019. Overall, trade between the two countries has decreased by 75% in 2020 compared to the previous year. Experts point to strict coronavirus restrictions on both sides of the border as the underlying reason for the drop.

 

— China soy imports to be record in 2020: COFCO official. China’s efforts to rebuild their hog herd that was decimated by African swine fever will result in the country importing a record 100 million tonnes of soybeans in 2020, according to Zhou Jishuai, deputy general manager of COFCO Oils and Oilseeds. In remarks at a conference in Guangzhou, Zhou said the country would crush 92.6 million tonnes of soybeans this year and soymeal mean demand is expected to be strong in the fourth quarter and into the first quarter of 2021. Soyoil demand is also set to increase more than 6% this year, Zhou said, due to rising use in biodiesel and animal feed.

 

— China sells all corn put up for auction. China sold all of the 103,455 MT of state-owned corn reserves put up for auction. The average sales price was 2,491 yuan (around $381) per MT.

 

U.S./China Phase 1 tracker: China’s purchases of U.S. goods. Link

 


TRADE POLICY


 

— Covid aid package includes technical fixes to the USMCA designed to resolve issues with merchandise processing fees and the North American Development Bank. The change means that finished goods made within the free trade zones (FTZs) won't qualify for duty-free treatment under the USMCA, even if manufacturers there follow the pact's complicated rules-of-origin specifications. That is how FTZs were treated under NAFTA. The change is expected to save manufacturers millions of dollars by allowing them to file post-importation claims for refunds, instead of just at the time their imports enter the United States. Manufacturers say the USMCA's complicated new rules of origin have increased the need to file post importation claims. “This means that vehicle parts suppliers will again receive this customs fee refund after a product is imported from Canada and Mexico,” said Bill Long, president and CEO of the Motor & Equipment Manufacturers Association. “This change will benefit the bottom line of each MEMA member that imports from USMCA nations during this time of a significant liquidity crunch resulting from our national public health crisis.”

 


ENERGY & CLIMATE CHANGE


 

— Carbon capture deal part of package. Backers of projects to capture and store carbon dioxide won big victories in the spending package, in what they say is a harbinger of increased congressional support for low-carbon technologies in the next Congress. The measure includes a two-year extension of the current tax credit, known as 45Q, for carbon capture and storage projects. That gives projects through 2025 to break ground and remain eligible for the incentive. The carbon capture provisions also authorize roughly $2 billion over five years to ready six significant carbon capture demonstration projects, in what could be a down payment for more significant climate action by Congress and President-elect Joe Biden in the years ahead.

 

— Indonesia says will allocate 9.2 million kiloliters of unblended biodiesel in 2021. Indonesia will allocate 9.2 million kiloliters of unblended biodiesel to companies in 2021, the country’s energy ministry said. That would mark an increase from 2020 as the government distributed 8.5 million kiloliters of biodiesel this year versus the 9.6 million originally announced. The announcement for 2021 came after an official from the National Energy Council warned last week the country might have to lower the biodiesel allocation to 8.5 million kiloliters for 2021.

 


FOOD & BEVERAGE INDUSTRY


 

— Quiet month for USDA food price forecast. USDA made no changes to its overall food price outlook and only adjusted the price of eggs this month. Forecast prices for eggs were revised down as rising egg production outpaced increased consumption, USDA said, and retail egg prices are seen rising between 4.0% and 5.0% in 2020.

 

     Overall, grocery store (food at home) prices in November were down 0.6% in November from October but were up 3.6% from November 2019.

 

     Restaurant (food away from home) prices were up 0.1% in November and are 3.8% higher than they were one year ago.

 

     So far in 2020, grocery store prices have rise risen 3.5% while restaurant prices are up 3.2% versus the year-ago period.

 

     Details: “Of the CPI food categories that USDA's Economic Research Service tracks, the category of beef and veal has had the greatest relative price increase (9.8%); fresh fruits have had the largest relative price decrease (0.9%).” As USDA has previously noted, retail meat prices have been “slow to decline following the highs reached at the onset of COVID-19.” In 2020, food-at-home prices are expected to increase between 3.0% and 4.0%, and food-away-from-home prices are expected to increase between 2.5% and 3.5%.

 

     In 2021, food-at-home prices are expected to increase between 1.0% and 2.0%, and food-away-from-home prices are expected to increase between 2.0% and 3.0%.

 

     The impacts of the Covid-19 pandemic have been very evident in food prices, elevating them from year-ago levels over the course of the past several months. But a less volatile 2021 is in the outlook at this stage.

 

— JBS ordered to test workers for Covid from Brazil’s Seara plant. A Brazilian judge ordered JBS SA to test all employees from its Seara plant in Seberi, Rio Grande do Sul state, for Covid-19 in ten days, according to an emailed statement from the state’s prosecutor office. Some 62 workers tested positive for the coronavirus since Dec. 1, while others 51 await for test results, according to a statement.

 

— ProPublica did a detailed look regarding the severe Covid-19 outbreak this past spring in Waterloo, Iowa, home to a Tyson Foods pork slaughterhouse where managers placed bets on how many plant workers would contract the virus. Local officials’ early calls to close the plant were rebuffed not only by Tyson executives but also by state leaders, including Gov. Kim Reynolds. Link for details.

 

— Abrupt shutdown of some major trade connections has the U.K. bracing for potential food shortages and manufacturers worried over more supply-chain disruptions. France abruptly barred freight and passenger traffic from Britain to stop the spread of a new strain of the coronavirus, the Wall Street Journal reports (link), triggering a miles-long backup of trucks at the Port of Dover and the Channel Tunnel. The chaos along the border brought warnings from grocers about perishables shipments and added fresh worries about the preparations for the U.K.’s divorce from the European Union in less than two weeks. For now, the shutdown has added a new dimension to the complexities the pandemic presents to commerce. While various countries have placed certain restrictions on travel from Britain and elsewhere during the pandemic, freight until Sunday evening had always been allowed to move freely in and out of the U.K., the WSJ item notes.

 

     UK food shortages


CORONAVIRUS UPDATE


 

 Summary: Global cases of Covid-19 are at 77,471,325 with 1,705,008 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 18,043,397 with 319,466 deaths.
 

       Link to Covid Case Tracker
       Link to Our World in Data

 

—  Rapid spread of a new variant of the coronavirus in Britain perturbed financial markets, after more than 40 countries banned travel from the country. The World Health Organization tried to calm fears, saying that the new strain was not out of control (contradicting Britain’s health minister). Still, share prices tumbled, oil prices fell, and sterling lost as much as 1.3% against the euro and 2% against the dollar. The continuing impasse in talks on a post-Brexit trade deal also weighed on the pound. The British government again insisted that it would not seek to extend the transition period that ends on Dec. 31.

 

     Medical authorities are already studying the effect the mutated virus has on the antibodies of those already immunized or recovered from the previous coronavirus strain. The variant has so far been identified in Denmark, the Netherlands, and Australia.

 


POLITICS & ELECTIONS


 

— Attorney General William Barr said he would not appoint a special counsel to investigate Hunter Biden or allegations of election fraud. The tax affairs of Biden, the son of President-elect Joe Biden, are already being examined by federal prosecutors in Delaware. Barr also said that Russia had most likely hacked U.S. government agencies.

 

— It wasn’t only Latino neighborhoods that swung toward Trump this year. Some other heavily immigrant areas — including those with many Asian-Americans — also voted more Republican than in the past, an analysis shows. Link to details via the New York Times.

 

— Biden adds a Warren confidant to his economic team. The president-elect named Bharat Ramamurti, a former aide to Sen. Elizabeth Warren (D-Mass.), as deputy director of the National Economic Council in charge of financial reform and consumer protection. The selection adds another progressive voice to Biden’s economic advisers amid pressure from the left.

     Biden also named former Obama Administration official David Kamin as deputy director of the National Economic Council, and Joelle Gamble will serve as special assistant to the president for economic policy.

 

— McConnell: Senate Will hold hearings on Biden’s Cabinet picks after Georgia election. Senate Majority Leader McConnell (R-Ky.) pledged to hold votes on President-elect Joe Biden’s Cabinet picks if Republicans retain control of the chamber’s majority next year. In an interview published on Monday, McConnell predicted that Republicans would be more receptive to Biden’s nominees than Democrats were to President Trump’s in 2017, but he did not say how many of Biden’s Cabinet picks he would let get through on the first day of the new administration.

 

— President-elect Joe Biden’s choice of Tom Vilsack for Agriculture secretary has stoked worries among progressive groups and conservative small farmers. Link to NYT article.

 

— Wednesday, Dec. 23 is the deadline for President Trump to veto the National Defense Authorization Act, the bill funding U.S. defense operations for the coming year. Trump has threatened to veto the bill over lawmakers’ refusal to include a provision striking Section 230 of the Communications Act, a law which Trump believes stifles conservatives on social media platforms. Trump is also upset at a provision in the bill that would rename U.S. military bases currently named after generals who fought against the government in the U.S. civil war. If Trump does issue a veto, an override vote in Congress is expected to be scheduled.
 


OTHER ITEMS OF NOTE     


 

— Statue of Robert E. Lee, a Confederate general, was removed from the Capitol in Washington, DC, where it represented Virginia along with that of George Washington. Ralph Northam, the state’s governor, called the Confederacy “a symbol of Virginia’s racist and divisive history.” Lee will be replaced by Barbara Johns, a civil-rights leader, if the state assembly approves the swap next month.

 

— Highest ranking Treasury officials hacked. Russian hackers who made their way into U.S. government agencies broke into the email system used by the Treasury Department’s most senior leadership. It’s the first detail of how deeply the hacking went into the Trump administration’s networks.

 

— Barr announces charges against Lockerbie suspect. The Justice Department charged a former Libyan intelligence operative in the 1988 explosion of a Pan Am flight over Lockerbie, Scotland — an attack that killed 270 people.

 

— Trump’s border wall to get $1.4 billion. The Homeland Security Department would get $51.9 billion for fiscal 2021, as well as $1.375 billion for 56 miles of border wall system under the spending deal, according to a summary from the Senate Appropriations Committee. President-elect Joe Biden has said he doesn’t plan to continue building the wall.

 

— JCPOA countries reaffirm commitment. The foreign ministers of Iran, Germany, France, the United Kingdom, China, and Russia issued a joint statement on Monday renewing their commitment to the Iran nuclear deal, opening the door for President-elect Joe Biden to re-enter the agreement. German Foreign Minister Heiko Maas warned Iran against making moves in the coming weeks that would jeopardize a U.S. return to the deal. “To make possible a rapprochement with the U.S. under Biden, there should be no further tactical maneuvers of the kind we’ve seen too many of in the recent past,” Maas told reporters.

 

— DACA challenge. Texas and eight other Republican-led states will ask a federal court today to rule the Deferred Action for Childhood Arrivals program unlawful, the latest threat to the Obama-era program.

 

— Lead rule. EPA plans to adopt new rules today requiring water utilities to notify the public more quickly about possible lead contamination, the first major regulatory update of its kind in nearly 30 years.

 


 

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