Evening Report | May 5, 2022
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Winter wheat drought footprint unchanged... Rains over the past week failed to improve the overall drought situation for the U.S. winter wheat crop. Based on this week’s U.S. Drought Monitor (as of May 3), USDA says 69% of the winter wheat crop is saddled with drought, unchanged from the previous week. USDA rates the drought as 17% “moderate,” 30% “severe,” 19% “extreme” and 3% “exceptional.”
Across HRW areas, dryness/drought covers 91% of Texas (down three points from the previous week), 77% of Oklahoma (unchanged), 100% of Colorado (unchanged), 75% of Kansas (down four points), 98% of Nebraska (down one point), 82% of South Dakota (down four points) and 93% of Montana (up two points).
For other crop areas, USDA puts the drought footprint at 23% for corn, 14% for soybeans, 35% for spring wheat and 56% for cotton.
Click here to view the associated maps and drought commentary.
March beef exports record-large for the month; pork exports lagging... The U.S. exported 303.7 million lbs. of beef in March – a record for the month and the highest volume since August of last year. Beef shipments increased 49.3 million lbs. (19.4%) from February and were up 3.7 million lbs. (1.2%) from March 2021. Through the first quarter of this year, the U.S. exported 845.8 million lbs. of beef, up 49.4 million lbs. (6.2%) from the same period last year, driven by a nearly 62% surge in shipments to China. Beef exports to South Korea during the first quarter increased 8.2%, while shipments to Japan, the top market for U.S. beef, declined 7.4% during the period.
Pork exports in March totaled 544.2 million lbs., up 57.9 million lbs. (11.9%) from February’s weak performance, but down 184.7 million lbs. (25.3%) from the all-time high in March 2021. Through the first quarter of this year, U.S. pork exports at 1.541 billion lbs. lagged last year’s pace for the same period by 386.1 million pounds (20.0%). Pork shipments to China during the first quarter plunged nearly 73%, as its domestic production is outpacing demand and sharply reducing its imports.
Brazil soybean exports drop sharply, corn shipments up significantly from year-ago... Brazil exported nearly 11.6 MMT of soybeans in April, according to official government data. That was down 4.5 MMT (28.2%) from year-ago, as this year’s smaller crop and harvest delays reduced shipments.
Brazil exported 702,777 MT of corn last month, up 571,901 MT (437%) from April 2020 when shipments were curbed by tight domestic supplies.
Negotiations starting on aid package, including ag provisions... Negotiations are underway in Congress on provisions in the Ukraine aid package forwarded by President Joe Biden, including provisions that would provide a temporary boost in commodity loan rates for wheat, soybeans, rice and minor oilseeds, and would provide a $10-per-acre incentive for double cropping soybeans after winter wheat in 2023. The agriculture provisions fall under the Senate Agriculture Committee’s jurisdiction, and panel Chair Debbie Stabenow (D-Mich.) said discussions between the House and Senate Democrats and Republicans were ongoing relative to the scope and content of the overall package. “It’s really the White House, the four leaders and relevant other committees trying to just get an agreement,” she said, according to CQ Roll Call. The ag-related package is getting a thumbs down from GOP ag leaders in Congress.
Longer wait for Biden’s China strategy... The unveiling of President Joe Biden’s detailed strategy toward China — delayed by internal deliberations, Covid-19 and the Ukraine conflict — will have to wait even longer. Despite anticipation over how the U.S. sees relations between the world’s two biggest economies developing, Secretary of State Antony Blinken is likely to offer little that’s new to help guide policy makers, analysts and markets in a speech he was meant to deliver, according to people familiar with his planned remarks who spoke on condition of anonymity in advance of the event. The address was scheduled for today but was delayed after Blinken tested positive for Covid-19.
Worker productivity posts biggest decline since 1947... U.S. worker productivity fell to start 2022 at its fastest pace in nearly 75 years while labor costs soared as the U.S. struggled with surging Covid cases, the Bureau of Labor Statistics reported today. Non-farm productivity, a measure of output against hours worked, declined 7.5% from January through March, the biggest decline since the third quarter of 1947. At the same time, unit labor costs soared 11.6%, bringing the increase over the past four quarters to 7.2%, the biggest gain since the third quarter of 1982.
Unit labor costs – the price of labor per single unit of output – shot up at an 11.6% rate. That followed a 1.0% growth pace in the October-December quarter. Last quarter’s jump likely exaggerates the pace of growth in labor costs. The surge in costs followed on the heels of a government report last week showing that compensation for American workers notched its largest increase in more than three decades in the first quarter amid a persistent labor shortage.
There were a record 11.5 million job openings at the end of March.
OPEC+ sticks with planned production increases... As expected, OPEC+ agreed on Thursday to another modest monthly oil output increase, arguing that the producer group could not be blamed for disruptions to Russian supply and saying China's coronavirus lockdowns threatened the outlook for demand. The group agreed to raise its June production target by 432,000 barrels per day, in line with an existing plan to unwind curbs made in 2020 when the Covid-19 pandemic hammered demand, ignoring calls from others to more aggressively accelerate production to lower prices.
Reuters reported two sources present at the meeting said delegates completely avoided any discussion about sanctions on Russia, wrapping up talks in near record time of just under 15 minutes.
Biden pledges to ‘combat hunger and improve nutrition for every American’... In a White House video, President Joe Biden said on Wednesday the administration would “lay out our plan to combat hunger and improve nutrition for every American” at the hunger, nutrition, and health conference set for September. More than 10% of Americans were food insecure and hunger rates spiked during the early months of the pandemic. “As more Americans experienced hunger, we saw how diet-related diseases heighten the risk of severe Covid,” said Biden. “It’s time we make real change. I’m committed to taking bold steps that are going to end hunger and enable everyone — everyone — to have access to affordable, healthy food and safe places to be physically active.”
The White House will hold listening sessions ahead of the conference to gather ideas on how to meet its goal of ending hunger and increasing healthy eating and physical activity by 2030 to reduce the prevalence of such diet-related diseases as obesity, diabetes, heart disease and cancer.
It will be the first presidential hunger conference since 1969, during the Nixon administration. The 1969 conference provided helped launch the Women, Infants, and Children program and expanding the food stamp and school lunch programs, and eventually led to development of the Dietary Guidelines for Americans.
