Evening Report: Feb. 3, 2022

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Growing certainty in Washington that Russia will order some kind of military strike... Biden administration officials today commented on the topic to a closed-door Senate briefing. Sen. John Cornyn (R-Texas) following the briefing said: “I think [Russian President Vladimir] Putin is gonna do something. We just don’t know exactly what it is yet.” Senate Foreign Relations Committee Chair Robert Menendez (D-N.J.) said the briefing increases the need to pass a sanctions package immediately. “Collectively, what I heard only makes the case that this is more pressing, more timely, and that time in this regard, if we want to be preventative, is of the essence.” Menendez revealed he is preparing pre-attack sanctions that would look to punish Russia for cyber-attacks and false flag operations, as some reports have alerted have or will take place.

Sen. Jim Risch (R-Idaho), the top Republican on Foreign Relations, said he has seen intelligence that shows Russia is producing “false proof” that the Ukrainians are the aggressors. “It’s important that all of you get that out there,” Risch declared. “And that the world understands that this is a false operation to try to justify them in an invasion.”

 


Argentina soybean production estimate cut... The Buenos Aires Grain Exchange cut its Argentine soybean crop estimate by 2 MMT to 42 MMT, according to its weekly report. The report cited lower yields and lowered planted soybean acreage at 16.3 million hectares. The exchange reported soybean planting is complete. 

The report noted that 99.1% of the country’s corn crop was planted. The exchange left its corn production estimate at 57 MMT.

The exchange rated the soybean crop as 37% “good/excellent,” 45% “fair” and 18% “poor/very poor.” It rated corn as 28% “good/excellent,” 44% “fair” and 28% “poor/very poor.”


 

Rains and then dryness forecast for southern Brazil, Paraguay and Argentina... World Weather Inc. forecasts southern Brazil, Paraguay and Argentina will get rains through Sunday. However, the outlook turns mostly dry next week through Feb. 16, with only some scattered showers from Feb. 11-14.

World Weather says rains in the Rio Grande do Sul and Santa Catarina, Brazil, will only temporarily increase soil moisture. Paraguay will likely get more rain but will still need more rain soon. World Weather forecasts the rest of Brazil will get regular rains over the next two weeks. Minas Gerais could see flooding.


 

Wheat drought area increases slightly... The amount of winter wheat considered in drought conditions rose one point to 69% for the week that ended Feb. 1, according to the U.S. Drought Monitor. USDA said winter wheat drought was 27% “moderate,” 22% “severe,” 18% “extreme” and 2% “exceptional.”  Last week, USDA said winter wheat drought was 25% “moderate,” 23% “severe,” 18% “extreme” and 2% “exceptional.”  

Dry/drought conditions continue to get worse in HRW areas. Kansas had a three-point increase in the area considered abnormally dry/drought to 89%. In Texas, the area considered abnormally dry/drought dropped three points to 93%. Nebraska had a two-point increase in the dry/drought area to 92%. The amount of land classified as abnormally dry/drought in Oklahoma (96%), Montana (92%), Colorado (100%) and South Dakota (78%) was unchanged.

In SRW areas, Illinois had a seven-point increase in land considered abnormally dry/drought to 33%. The area classified as abnormally dry/drought in Michigan increased by 18 points to 44%. Missouri had 45% of its area considered abnormally dry/drought, up five points. North Carolina had a seven-point increase to 67% of its area considered abnormally dry/drought. Ohio (0%), Indiana (0%) and Arkansas (43%) had the same percentage of areas considered abnormally dry/drought as the previous week.
 

 

CattleFax: Higher 2022 cattle prices... All cattle classes are expected to have higher prices in 2022, Kevin Good, CattleFax vice president of industry relations and analysis, said at the CattleFax Outlook Seminar, held as part of the 2022 Cattle Industry Convention and NCBA Trade Show in Houston.

Good forecasts the average 2022 fed steer price at $140/cwt., up $18/cwt. from 2021, with a range of $130 to $155/cwt. throughout the year. The 800-lb steer price is predicted to average $172/cwt. with a range of $158 to $184/cwt., and the 550-lb steer price is anticipated to average $205/cwt., with a range of $180 to $230/cwt. He predicts utility cows at an average of $75/cwt. with a range of $65 to $85/cwt. and bred cows at an average of $1,850/head with a range of $1,700 to $2,000 for load lots of quality, running-age cows.

Good said the USDA All-Fresh Beef Retail Price should average near $7.15/lb. this year and cutout value should hold steady near $280/cwt. on average for 2022.

 

Initial House Ag farm bill hearing on conservation programs provides glimpse into potential battles... The initial hearing in the process to write a new farm bill took place Wednesday, with the House Agriculture Conservation and Forestry Subcommittee examining current conservation programs. But the session appeared to focus more on concerns primarily by Republican lawmakers over a potential push for more climate-oriented efforts for conservation programs. Those lawmakers argued that adding the climate aspect to these programs cannot take away from their current primary focus. House Agriculture Committee Ranking Member GT Thompson (R-Penn.) said farmers’ climate efforts do need to be recognized but said the conservation programs in the bill cannot be “repurposed as the climate title.”

Farm Service Agency (FSA) Administrator Zach Ducheneaux pointed to expanded climate-related efforts under the venerable Conservation Reserve Program (CRP) were boosting interest and enrollment in the program. Natural Resources Conservation Service (NRCS) Administrator Terry Cosby pointed to its efforts to bolster climate-smart agriculture.

Lawmakers from both parties also raised questions on staffing levels relative to increased activities related to climate.

Another of the panel’s subcommittees will hold a hearing next week on farm policy with USDA Undersecretary for Farm Production and Conservation Robert Bonnie, a chief architect of USDA’s climate-smart efforts. Given what unfolded in the initial session on reviewing conservation programs, Bonnie’s appearance will likely be as contentious if not more so, especially on the topic of inserting more climate-related activities into U.S. farm policy.

 

EPA, White House boost pressure on Postal Service over vehicle purchase plans... A plan by the U.S. Postal Service (USPS) to purchase mostly gasoline-powered vehicles as it seeks to replace its aging fleet is generating considerable pushback within the Biden administration, with EPA and the White House Council on Environmental Policy both urging USPS to buy electric vehicles.

The USPS plan “represents a crucial lost opportunity to more rapidly reduce the carbon footprint of one of the largest government fleets in the world,” EPA Associate Administrator Vicki Arroyo said in a letter. Arroyo took issue with environmental analysis by USPS in making its decision, contending it underestimated greenhouse gas emissions and was conducted after a contract for next-generation delivery vehicles was already awarded.

Brenda Mallory, head of the Council on Environmental Quality, chided USPS for committing to “walk down a path before looking to see where the path was leading.” She called the transition to “a modern, clean and efficient USPS vehicle fleet” a “top priority” for the administration.

USPS countered it viewed the concerns as being based on “policy disagreements with the decision and not a reflection of the adequacy” of their environmental review. “While we can understand why some who are not responsible for the financial sustainability of the Postal Service might prefer that we acquire more electric vehicles, the law requires us to be self-sufficient,” the agency said. “For that reason, given our current financial condition, the total cost of ownership of our delivery vehicle fleet must be a part of our analysis.”

 

USDA, DOJ launches anti-competitive reporting website... Farmers and ranchers now can anonymously report potentially unfair and anti-competitive practices in the livestock and poultry sectors at the website, farmerfairness.gov, launched by the U.S. Departments of Agriculture (USDA) and Justice (DOJ). Producers can also submit complaints or tips about potentially anti-competitive practices by emailing PSDComplaints@usda.gov; calling (833) 342-5773; or mailing Stop 3601, 1400 Independence Ave. SW, Washington, D.C., 20250-3601. Complaints can be submitted under their names or anonymously. DOJ or USDA staff will only contact the producer if additional information is needed. DOJ and USDA will follow their respective privacy and confidentiality policies for any information provided.

USDA Packers and Stockyards Division staff and Department of Justice staff will review complaints first.

If a complaint raises sufficient concern, it will be selected for further investigation and may lead to the opening of a formal investigation.

 

38.5 million bu. soybean crush plant announced in Nebraska... Norfolk Crush, LLC announced plans to build a 38.5 million bu. per year, $375 million soybean crushing plant near Norfolk, Nebraska. Groundbreaking is expected this spring. The plant is projected to start production in 2024.  The plant will have access to the Nebraska Central and Union Pacific railroads.

 

Canada/U.S. border crossing re-opened... One northbound and one southbound lane are open on Highway 4 at the Canada/U.S. border at the Coutts, Alberta crossing, according to the Alberta Royal Canadian Mounted Police. The Alberta Beef Producers and Alberta’s ag minister report there are no longer any livestock trailers at the border crossing, with the ag minister noting they were rerouted to other crossings. The ag minister’s office is working to find alternative routes for producers to use.

The border crossing was closed as Canadian truckers protest a federal Covid-19 vaccine mandate for cross-border truckers.

 

India, Russia in multi-year fertilizer deal talks... Indian and Russian officials are in discussions to develop a long-term agreement to supply India with fertilizers, according to government and industry sources reported by Reuters.

India aims to lock in 1 MMT per year each of di-ammonium phosphate (DAP) and potash; and about 800,000 MT per year of a mix of nitrogen, phosphorus and potassium. India’s fertilizer companies are expected to sign a three-year deal with Russian companies for DAP, potash and other fertilizers. Indian companies already have an import deal for 400,000 MT of DAP.

India’s government and industry officials are expected to visit Russia later this month or early March to meet with government officials to work on the deal.

 

AFBF applauds Supreme Court decision to hear Clean Water Act case... “AFBF [the American Farm Bureau Federation] is pleased that the Supreme Court has agreed to take up the important issue of what constitutes ‘Waters of the U.S.’ under the Clean Water Act. Farmers and ranchers share the goal of protecting the resources they’re entrusted with, but they shouldn’t need a team of lawyers to farm their land. We hope this case will bring more clarity to water regulations," AFBF President Zippy Duvall said of the U.S. Supreme Court decision to hear Sackett v. Environmental Protection Agency, which challenges EPA’s overreach of its Clean Water Act jurisdiction.

 

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