House Passes One-Week Spending Bill to Avert shutdown; Some GOP Senators Balking

Mexican officials to visit Washington Friday to defuse GMO corn trade dispute

Many traders and analysts don’t believe the Fed’s long-term inflation rate forecasts, resulting in more market volatility.

The U.S. House cleared another week-long stopgap spending bill but several GOP senators could pose hurdles on the topic. Eventually there will be an extension.

Retail sales in the U.S. declined 0.6% month-over-month in November of 2022, much worse than market forecasts of a 0.1% fall. It is the biggest drop so far this year.

By the time stocks open today, seven separate global central banks (including the Fed, ECB, BOE and Swiss National Bank) will have hiked rates over the last 24 hours. While most of the outcomes were expected, it’s still weighing on sentiment, analysts note.

The European Central Bank opted for a smaller rate hike at its Thursday meeting, taking its key rate from 1.5% to 2%. It also said that from the beginning of March 2023 it would begin to reduce its balance sheet by 15 billion euros ($16 billion) per month on average until the end of the second quarter of 2023.

USDA daily export sale: 101,600 metric tons of corn for delivery to Mexico during the 2022-2023 marketing year.

Big soybean sales to China in latest week. USDA’s weekly Export Sales report for the week ended Dec. 8 included hefty sales of U.S. soybeans to China. Activity for the week for 2022-23 included net reductions of 65,000 tonnes of wheat, net sales of 10,961 tonnes of corn, net sales of 1,252,622 tonnes of soybeans, and 10,917 running bales of upland cotton. For pork and beef, activity for 2022 included net reductions of 961 tonnes of beef but net sales of 2,439 tonnes of pork. For 2023, sales reductions of 139 tonnes of beef and 162 tonnes of pork were reported.

Foreign Minister Marcelo Ebrard said he and other Mexican officials would visit Washington on Friday to seek “points of agreement on genetically modified corn and other issues,” potentially defusing a trade dispute between the nations, the Associated Press reports (link).

$4.754: Average per-gallon price of diesel fuel across the U.S. the week ending Dec. 12, down 21.3 cents from the week before and the lowest price since the week of Feb. 28, according to the Energy Information Administration.

China’s central bank ramped up cash injections into the banking system on Thursday, while keeping an interest rate on the medium-term policy loans unchanged for the fourth straight month, to keep liquidity conditions ample.

U.S. officials said they did not expect the Russia/Ukraine conflict to end in the coming months, even in more frigid weather.

When USDA increased SNAP benefits by 2% last year, it relied on a re-evaluation of the Thrifty Food Plan that should have been subjected to peer review but was not, said a congressional agency on Wednesday. The Government Accountability Office also said key decisions in the re-evaluation were not adequately explained. The report will likely be used by some Republicans (who requested it) relative to funding issues via the new farm bill debate. It was the first time in 46 years the TFP had increased beyond the rate of inflation. Republicans in Congress said previous updates had been cost-neutral.

Long Covid has contributed to over 3,500 deaths in the U.S. The finding by CDC. researchers is the first official tally of the condition’s toll. Meanwhile, the White House is warning of a possible Covid-19 winter surge, urging Americans to gather and socialize safely with family and friends during the holiday season.

Equities today: Global stock markets were lower overnight. U.S. Down opened own 300+ lower and is now down around 500 points. In Asia, Japan -0.4%. Hong Kong -1.6%. China -0.3%. India -1.4%. In Europe, at midday, London -0.5%. Paris -1.3%. Frankfurt -1.2%.

     U.S. equities yesterday: After plunging lower following the Fed meeting conclusion, the Dow managed to pare losses by the close but still finished in negative territory. The Dow ended down 142.29 points, 0.42%, at 33,966.35. The Nasdaq fell 85.93 points, 0.76%, at 11,170.89. The S&P 500 declined 24.33 points, 0.61%, at 3,995.32.

Regulators are set to propose the biggest changes to U.S. stock-market rules since the mid-2000s, aiming to give small investors better prices on their trades. The SEC proposed rules that would squeeze stock-market middlemen. They aim to give small investors better prices on trades and reduce some advantages enjoyed by high-speed trading firms. It would amount to the biggest changes to stock-market rules since the mid-2000s. Brokerages and so-called wholesalers have said that individual investors get a good deal under the current system and warned that the SEC overhaul could end up hurting investors.

Agriculture markets yesterday:

     • Corn: March corn fell 3 cents to $6.50 1/2. Corn futures extended Tuesday’s late declines amid spillover from weakness in the wheat market, which remains under pressure in part due to grain supplies from Ukraine reaching the global market.
     • Soy complex: January soybeans rose 2 1/2 cents to $14.82 1/4. January soymeal rose $7.80 to $460.20. January soyoil fell 57 points to 63.49 cents.
     • Wheat: March SRW wheat fell 1 1/2 cents to $7.49 1/4. March HRW wheat fell 15 cents to $8.50 1/4. March spring wheat fell 5 1/2 cents to $9.17 1/4. 
     • Cotton: March cotton fell 26 points to 81.37 cents.  
     • Cattle: February live cattle fell 65 cents to $155.70. January feeder futures dropped 62.5 cents to $183.60.  
     • Hogs: February lean hog futures fell $1.175 to $83.40, the contract’s lowest close since Oct. 14.  

Ag markets today: Corn, soybean and wheat futures traded within narrow ranges in quiet, two-sided price action overnight. As of 7:30 a.m. ET, corn futures were trading around a penny lower, soybeans were 1 to 3 cents lower and wheat futures were 1 to 2 cents higher. Front-month crude oil futures were holding near unchanged while the U.S. dollar index is more than 500 points higher.

Technical viewpoints from Jim Wyckoff:

On tap today:

     • Bank of England is expected to raise its benchmark interest rate to 3.5% from 3%. (7 a.m. ET) UPDATE: The Bank of England (BOE) Thursday (Dec. 15) raised interest rates to 3.5%, a 50-basis-point increase that takes rates to their highest level in 14 years with six of nine members in favor, two backing no change, and one backing a 75-basis-point increase. This marked the ninth straight increase in rates by the BOE, the most aggressive run of hikes since 1989. And BOE members indicated that more rate increases were likely in the cards without providing signals on how high they may push rates. “Further increases in Bank Rate may be required for a sustainable return of inflation to target,” the BOE said.
     • European Central Bank is expected to raise its benchmark interest rate to 2.5% from 2%. (8:15 a.m. ET) UPDATE: The ECB raised interest rates by 50 bps during its last monetary policy meeting of 2022, marking a fourth rate increase, following two consecutive 75bps hikes. That takes the deposit facility to 2%, the refinancing rate to 2.5% and the marginal lending to 2.75%, a level not seen in fourteen years. Policymakers also said rates are expected to rise further due to a substantial upward revision to the inflation outlook. Inflation forecasts were revised higher, with average inflation seen reaching 8.4% in 2022 before decreasing to 6.3% in 2023. Inflation is then projected to average 3.4% in 2024 and 2.3% in 2025. On the GDP front, the Euro Area economy may contract in the current quarter and the next quarter, owing to the energy crisis, high uncertainty, weakening global economic activity and tighter financing conditions. Overall, the central bank now sees the economy growing by 3.4% in 2022, 0.5% in 2023, 1.9% in 2024 and 1.8% in 2025.
     • U.S. retail sales for November are expected to fall 0.3% from the prior month. 8:30 a.m. ET) UPDATE: Retail sales in the U.S. declined 0.6% month-over-month in November of 2022, after rising 1.3% in October, and much worse than market forecasts. It is the biggest drop so far this year, with sales of furniture (-2.6%), building materials (-2.5%) and motor vehicles (-2.3%) falling the most during the holiday season. Other decreases were also seen at electronics stores (-1.5%), nonstore retailers (-0.9%), sporting goods, hobby, musical instruments and books (-0.6%), gasoline stores (-0.1%) and general merchandise stores (-0.1%).
     • U.S. jobless claims are expected to rise to 232,000 in the week ended Dec. 10 from 230,000 one week earlier. (8:30 a.m. ET) UPDATE: The number of Americans filing new claims for unemployment benefits fell by 20,000 to 211,000 on the week ending Dec. 10, well below market expectations of 232,000. It was the least amount of initial weekly claims since the end of September, pointing to a continuously tight labor market in the United States. The seasonally unadjusted data fell by 39,095 to 248,881. The four-week moving average, which removes week-to-week volatility, fell by 3,000 to 227,250.
     • Philadelphia Fed's manufacturing survey is expected to rise to minus 12 in December from minus 19.4 one month earlier. (8:30 a.m. ET) UPDATE: The Philadelphia Fed Manufacturing Index in the U.S. remained negative but rose 6 points to -13.8 in December of 2022, compared to market expectations of -12. This is its fourth consecutive negative reading and sixth negative reading in the past seven months. 31% of the firms reported declines in activity, while 17% reported increases. The indicators for new orders and shipments both declined: The new orders index decreased 9 points to -25.8, its lowest reading since April 2020, and the shipments index fell 13 points to -6.2, its first negative reading since May 2020. On balance, the firms reported a decline in employment. The employment index dipped into negative territory for the first time since June 2020, falling from 7.1 in November to -1.8 this month. The 19% of firms reporting declines in employment narrowly exceeded the 17% that reported increases; 64% reported steady employment.
     • New York Fed's Empire State manufacturing survey is expected to fall to minus 0.5 in December from 4.5 one month earlier. 8:30 a.m. ET)
     • USDA Weekly Export Sales report, 8:30 a.m. ET
     • U.S. industrial production for November is expected to increase 0.1% from the prior month. (9:15 a.m. ET) 
     • U.S. business inventories for October are expected to increase 0.4% from the prior month. (10 a.m. ET)

FOMC: More rate hikes ahead, inflation to linger, higher end-of-year rates for 2023. Here are the bottom-line developments from Wednesday’s FOMC statement, updated Fed forecasts and key remarks from Fed Chair Jerome Powell’s presser:

• Fed funds rate rose by 50bps to 4.25%-4.5% during its last monetary policy meeting of 2022, pushing borrowing costs to the highest level since 2007, and in line with market expectations. It was a seventh consecutive rate hike, following four straight three-quarter point increases. This is the last time we’ll hear from the FOMC until Feb. 1. The latest rate hike was via a unanimous decision.
• Ongoing hikes in the target range will be appropriate to attain a stance of monetary policy sufficiently restrictive to return inflation to 2%.
• Powell stressed the Fed had no interest in revising the inflation target of 2%... in near- or mid-term. “We’re not considering that; we’re not going to consider that under any circumstances,” Powell said. Bill Ackman, the widely followed hedge fund billionaire, tweeted yesterday that the Fed’s 2% inflation target “is no longer credible.”
• Fed now expects interest rates to reach 5.1% next year (a cumulative increase of 75 basis points after this week), 4.1% in 2024, and 3.1% in 2025, a higher level than previously indicated. This means no rate cuts in 2023. There were 17 out of 19 Fed officials who looked for rates to be at least at 5% in 2023.
• Powell wouldn’t say whether future hikes would continue to shrink down to the more common 25-basis-point increase, but he did say “it’s now not so important” how fast the Fed moves to raise rates… it’s where they land up... and how long they remain there. The FOMC believes “ongoing increases” to the federal funds rate would continue to be “appropriate,” and that once rates have climbed high enough, the Fed would likely maintain a “restrictive” stance “for some time.” “I wouldn’t see us considering rate cuts until the committee is confident that inflation is moving down to 2% in a sustained way,” Powell said. “That’s the test.”
• Powell affirmed that the Fed would keep on with “QT” asset sales, which would further mop up liquidity.
• GDP growth projections were revised higher for this year (0.5% vs 0.2%) but lowered for 2023 (0.5% vs 1.2%) and 2024 (1.6% vs 1.7%).
• Inflation forecasts were revised higher for 2022 (5.6% vs 5.4%), 2023 (3.1% vs 2.8%) and 2024 (2.5% vs 2.3%).
• Results of the October and November Consumer Price Index (CPI) figures were “welcome” developments, Powell said, “but it will take substantially more evidence to give confidence that inflation is on a sustained downward path.” The largest component of inflation — around 55% — is in the area of non-housing-related services, Powell said, which is “really a function of the labor market.” Given that vacancies are “quite elevated” and there has been little softening with jobs growth and wages high, Powell said that “is likely to take a substantial period to get down.” Powell said, “That’s really why we’re writing down those high rates and why we’re expecting that they’ll have to remain high for a time.”
• Personal Consumption Expenditures (PCE) inflation is now forecast at 5.6% for this year (5.4% September), falling back to 3.1% in 2023 (2.8% September) and 2.5% in 2024 (2.3% September). But the outlook for core PCE — the level closely followed by the Fed—is at 4.8% in 2022 (4.5% September), moving to 3.5% in 2023 (3.1% September) and 2.5% in 2024 (2.3% September) and their 2025 outlook is not changed from September at 2.1%.
• Unemployment forecasts: 3.7% versus 3.8% in September. But for 2023, Fed sees unemployment climbing to 4.6% versus an expectation for 4.4% in September. Unemployment is seen holding at 4.6% versus the September outlook for 4.4%.
• Recession? Powell, asked whether the economic forecast at a slow growth rate ahead of 0.5% when combined with the unemployment rate would suggest a recession is in the cards, stressed that he did not believe it was a recession forecast. “I don't think it would qualify as a recession because you've got positive growth,” he stated. “It's slow growth. It's well below trend. It won't feel like a boom. It will feel like very slow growth.” Powell was not asked about whether he thought the recession or downbeat economic forecasts for some countries outside the U.S. would catch this country in a downdraft enough to spill into a recession, a potential development seen by some observers. Concluded Powell: “I don’t think anyone knows whether we’re going to have a recession or not, and if we do, whether it’s going to be a deep one or not It’s not knowable.”
• Market impact: U.S. stocks closed lower after the Fed’s decision. But some investors are still betting that the central bank will stop raising rates sooner and begin cutting them earlier. The dollar weakened, and longer-term bond yields fell a little. The 10-year rate is a little below 3.5%. Why weren’t equities even lower following the Fed’s announcements? As noted, the market doesn’t believe the Fed when it says rates will rise to 5.125%. Fed Fund futures have terminal Fed funds hitting 4.9% and the December 2023 Fed Funds rate below 4.5%, a large disconnect from the Fed’s 5.125% forecast yesterday. The Sevens Report notes the Fed’s history of forecasting the fed funds rate out one year is not good. Example: In December 2021 the Fed projected median fed funds to be 0.875% in December 2022. It’s 4.375% now.
• Bottom line: Higher interest rates, stickier inflation, and a weaker economy next year. Markets’ attention will now shift from the size of hikes at each Fed meeting to a focus on how high the peak in rates will be. And that will depend on the incoming data on inflation, employment, and economic growth. 
   

Treasury Secretary Janet Yellen: Biden has the economy back on track. In an opinion item in the Wall Street Journal (link), Yellen says Biden’s policies “have helped the country weather a global economic storm and invest for the long term.” Writes Yellen: “Recent economic reports indicate that the U.S. economy remains resilient. It’s growing amid a global slowdown and tightening financial conditions. The labor market is strong, with the unemployment rate near a 50-year low. Household balance sheets remain healthy, consumer spending is robust, and credit-card delinquencies are low.”

Market perspectives:

     • Outside markets: The U.S. dollar index is higher. The yield on the 10-year US Treasury note was firmer, trading just above 3.50%. Crude was little changed, with U.S. crude around $77.30 per barrel and Brent around $82.70 per barrel. Gold and silver futures were under significant pressure, with gold around $1,787 per troy ounce and silver around $23.35 per troy ounce.  

   • A weeklong shutdown of the Keystone oil pipeline has tightened the discount on Canada’s oil compared with the WTI benchmark. On Tuesday, Canadian barrels traded at a discount of $13.30 to WTI prices on the Gulf Coast, about 27% tighter than a $18.30 discount recorded last Wednesday, according to S&P Global Commodity Insights. Gulf Coast refiners now have to replace hundreds of thousands of barrels that are no longer flowing through the system. The 2,700-mile Keystone pipeline shut down Dec. 7 after a rupture in Kansas spilled an estimated 14,000 barrels of crude oil, creating one of the largest spills in the U.S. in more than a decade. Keystone’s shutdown is likely to accelerate a decline in already falling oil reserves and push U.S. oil prices higher, analysts note.

     • Freeport LNG is still planning to restart its liquefied natural gas (LNG) export terminal in Texas that was shuttered in June from an explosion, according to Bloomberg, with the firm receiving a lengthy list of engineering information requests made by the Federal Energy Regulatory Commission (FERC) that the regulator issued following a Nov. 30 visit to the facility. Freeport told the news outlet they are reviewing the FERC list with a goal of restarting the facility around year end. The restart can only take place after FERC reviews the company’s responses.

     • $4.754: Average per-gallon price of diesel fuel across the U.S. the week ending Dec. 12, down 21.3 cents from the week before and the lowest price since the week of Feb. 28, according to the Energy Information Administration.

     • Ag trade: Japan purchased 154,942 MT of wheat in its weekly tender, including 65,870 MT U.S., 63,562 Canadian and 25,510 MT Australian. Tunisia purchased 125,000 MT of durum wheat from an unspecified origin.

     • Running dry. Despite some recent storms in the Sierra Nevada and Central Valley, the nation's largest water supplier has declared a drought emergency for all of Southern California. The Metropolitan Water District of SoCal supplies water to 26 agencies that provide major population centers like Los Angeles and San Diego counties, but each one of them will now have to voluntarily cut down on imported supplies. If significant rainfall doesn't materialize this winter, mandatory water restrictions are likely to be issued in April that could impact 19 million Americans. If the drought continues, state and local water officials will have to make big investments in infrastructure, like expensive recycling and desalination technology, or risk a longer list of expanding restrictions.

     Regional drought emergency announced. As California faces the prospect of a fourth consecutive dry year, officials with the Metropolitan Water District of Southern California have declared a regional drought emergency and called on water agencies to immediately reduce their use of all imported supplies. Residents reliant on California’s other major supply — the Colorado River — had not been included in that emergency declaration. Officials said the call for conservation could become mandatory if drought conditions persist in the coming months, which some experts say is likely. Link to details via the Los Angeles Times.

     • NWS weather: Heavy snow and blizzard conditions will continue through Thursday for portions of the Northern Plains and Upper Midwest... ...Significant accumulating ice and heavy snow for the interior Mid-Atlantic and New England Thursday into Friday... ...Heavy rain and severe weather possible with thunderstorms moving through the Southeast and Florida Thursday.

Items in Pro Farmer's First Thing Today include:

     • Quiet trade overnight
     • Record November NOPA crush figure expected
     • Exchange cuts Argentine wheat crop estimate
     • Firm expects bigger EU crops in 2023
     • China boosts cash support, holds rates steady (details in China section)
     • Firms raise China’s 2023 economic growth forecasts
     • Cash cattle negotiations at a standstill
     • Cash hog index inches higher for second straight day

— Summary:

• Russia is taking a page out of North Korea’s book by manipulating its ships’ locators so they can go dark while delivering sanctioned goods.
• Russia ordered a spate of drone attacks against Kyiv on Wednesday — its first drone strikes in weeks — as the war in Ukraine nears its tenth month and Western leaders pledge greater support for Ukraine. Ukrainian officials said the country’s air defenses succeeded in knocking out the 13 drones, which they said were Iranian made. Russian forces also struck an administration building in Kherson on Wednesday. Meanwhile, world leaders pledged more than $1 billion in aid to Ukraine this week, around $442 million of which will be earmarked for Ukraine’s decimated energy infrastructure. After sustained Russian missile strikes, nearly half of the country’s energy infrastructure has been destroyed, according to Ukrainian officials.
• U.S. officials said they did not expect the conflict to end in the coming months, even in more frigid weather. “Just given what we’re seeing in the air and on the ground in Ukraine, it’s difficult to conclude that this war will be over by year’s end,” said White House national security spokesperson John Kirby. “We have no expectation that the fighting will stop in the winter months to come,” he added.
• Ukraine’s president, Volodymyr Zelenskyy, said that 64 Ukrainian prisoners of war had been freed from Russian captivity in a prisoner exchange. An American citizen was also freed in the swap. Ukrainian officials did not say how many Russian prisoners they released in return.
  
   

— House passes short-term funding bill to avert government shutdown. The House on Wednesday passed a short-term funding bill through Dec. 22 to avert a government shutdown, kicking Friday’s funding deadline to next week to allow lawmakers more time to strike a deal on spending for the remainder of fiscal year 2023. The continuing resolution (CR) passed in a 224-201 vote. It now heads to the Senate, where it must pass and be sent to President Biden’s desk before midnight on Friday to avoid a shutdown.

     Nine Republicans voted with Democrats in supporting the measure after GOP leadership urged rank-and-file members to oppose the legislation: Reps. Adam Kinzinger (Ill.), Liz Cheney (Wyo.), Chris Jacobs (N.Y.), Anthony Gonzalez (Ohio), John Katko (N.Y.), Jaime Herrera Beutler (Wash.), Fred Upton (Mich.), Steve Womack (Ark.) and Brian Fitzpatrick (Pa.).

     The measure now heads to the Senate, where it will require a unanimous agreement to provide for expedited consideration. Several senators said Wednesday they objected to the CR and were considering voicing that from the Senate floor, which would effectively cause a short shutdown. “I typically don’t signal in advance what procedural objections I might raise to a late, breaking [unanimous consent] request,” said Sen. Mike Lee (R-Utah), who introduced his own CR to keep agencies funded at their current levels through Feb. 4. He added he will continue to push for his lengthier bill on the floor, which he said would create the dual benefit of giving lawmakers more time to read the omnibus and Republicans more leverage in negotiations after they take control of the House next year.

— China's retail sales plunge more than expected, while industrial production disappoints. Retail sales fell by 5.9% in November from a year ago, worse than expectations for a decline of 3.7%, according to analysts polled by Reuters. Industrial production grew by 2.2% in November from a year ago, missing Reuters’ forecast for a 3.6% increase. A day before the data release, China’s National Bureau of Statistics canceled its in-person press conference set for Thursday without explanation.

     Details: China's industrial production was the weakest growth in industrial production since May, amid rising Covid infections and strict curbs as well as a downturn in the property sector. Among sectors, output of manufacturing grew softer, amid a decline in utilities, while mining activity accelerated. Within manufacturing, output expanded for coal mining & washing (5.5%), oil & gas (7.2%), chemical raw materials (10.8%), ferrous metal smelting (9.4%), general manufacturing (2.3%), non-ferrous metal smelting (9.4%), automotive (4.9%), electrical machinery (12.4%); while production fell for agriculture (-2.9%), textiles (-4.7%), electricity (-1.0%); communication (-1.1%).    

     Details: China's retail trade decline was the second straight month of decrease in retail trade and the steepest pace since May, as consumption deteriorated due to the impact of a new wave of Covid infections and ongoing restrictions. Sales shrank for all categories: cosmetics (-4.6% vs -3.7% in October), clothing (-15.6% vs -7.5%), furniture (-4% vs -6.6%), home appliances (-17.3% vs -14.1%), office supplies (-1.7% vs -2.1%), automobiles (-4.2% vs 3.9%), oil products (-1.6% vs 0.9%), communications equipment (-17.6% vs -8.9%), and building materials (-10.0% vs -8.7%). Considering the first eleven months of the year, retail sales edged down 0.1%.

— China boosts cash support, holds rates steady. China’s central bank ramped up cash injections into the banking system on Thursday, while keeping an interest rate on the medium-term policy loans unchanged for the fourth straight month, to keep liquidity conditions ample. The People’s Bank of China (PBOC) said it was keeping the rate on 650 billion yuan ($93.53 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.75% from the previous operation. With 500 billion yuan worth of MLF loans expiring, the operation resulted in a net 150-billion-yuan fresh fund injection into the banking system.

— Chinese agribusiness giant Fufeng gets US federal clearance for controversial North Dakota land sale — Inter-agency body says it will not block the company’s $700 million corn milling plant, which some residents oppose because of proximity to air force base and espionage fears. Link for details via the South China Morning Post.  

— U.S. Senate voted to ban the hugely popular TikTok video-sharing app from all government-issued phones and other devices as the Biden administration considers restrictions on the Chinese-owned platform. The bill underscores fears that TikTok and its parent, ByteDance, could share information on U.S. users with Chinese authorities.

— NCGA adds to list of those urging the Biden administration to address Mexico GMO corn ban. The National Corn Growers Association (NCGA) and presidents of 23 state grower organizations are adding their voices to a growing list who want the Biden administration to deal with Mexico’s coming ban (starting in 2025) on imports of GMO corn. In a letter to President Joe Biden, the group called on Biden to make the issue a “critical part” of the Jan. 9 meeting between with Mexican President Andres Manuel López Obrador and Canadian Prime Minister Justin Trudeau. They also called on Biden to direct USDA Secretary Tom Vilsack and U.S. Trade Representative Katherine Tai to “set a firm, quick timeline with Mexico to withdraw the decree or initiate a case under the biotechnology provisions of the U.S.-Mexico-Canada Agreement (USMCA), and you do so without agreeing to a ban of any form of biotech corn, including white corn that is used for human consumption.” Mexico’s coming ban would “ignore the science and turn the clock back on a quarter century of environmental gains.”

     Foreign Minister Marcelo Ebrard said he and other Mexican officials would visit Washington on Friday to seek “points of agreement on genetically modified corn and other issues,” potentially defusing a trade dispute between the nations, the Associated Press reports (link).

     Facts and figures: The U.S. is forecast to sell Mexico around 18 million tons of corn, of which 18% to 20% is white corn.

— Tesla cofounder JB Straubel looks to supercharge the U.S. electric vehicle battery market with a new $3.5 billion plant in South Carolina. Carson City, Nevada-based Redwood Materials, the battery recycling and components maker from Tesla cofounder JB Straubel, is acquiring 600 acres near Charleston, South Carolina for the new plant that will recycle and recover high-value metals from used batteries and convert them to materials needed by new battery plants. It’s the biggest such announcement for this type of facility in the U.S., and aims to produce enough resources for 1 million electric vehicles per year.  

— USDA clean energy announcement. Today, USDA Secretary Tom Vilsack is scheduled to announce funding for critical infrastructure in 46 states to combat climate change and expand access to clean energy.

— GAO finds USDA did not follow rules in updating its Thrifty Food Plan. While USDA was within its power to revise the Thrifty Food Plan under the Supplemental Nutrition Assistance Program (SNAP), the Government Accountability Office (GAO) said in a report (link) released Wednesday that the agency did not follow procedural steps in making the changes. USDA boosted maximum benefits by 21% or more compared with the rate of inflation, the first time that had happened in 45 years.

     GAO faulted USDA’s review process on the effort, saying that they did not follow “key project management practices, peer review guidelines, and quality standards.”

     The report also said USDA “missed an opportunity to identify ways to measure project success and to set clear expectations for stakeholders” with the update.

     At latest count, 41.7 million people were enrolled in SNAP, with an average monthly benefit of $224 per person.

     The report was requested by Senate Agriculture Committee Ranking Member John Boozman (R-Ark.) and House Agriculture Committee Ranking Member Glenn GT Thompson (R-Pa.), with the two blasting USDA’s actions in the wake of the report. “This report shows the problems with this process are far greater than USDA merely cutting corners,” Boozman said. “It is evident that the department’s political leadership set out to achieve a predetermined outcome and purposefully ignored important steps in the process that would get in their way.” Thompson also criticized USDA’s actions, saying it was a “particularly egregious effort to pull the wool over the eyes of the public as it relates to the Thrifty Food Plan Update.”

     Upshot: The GAO assessment will be used by Republicans in the coming debate on a new farm bill as SNAP and other nutrition programs comprise almost 85% of farm bill spending.

— Summary:

• Global Covid-19 cases at 651,313,339 with 6,659,502 deaths.
• U.S. case count is at 99,682,155 with 1,086,199 deaths.
• Johns Hopkins University Coronavirus Resource Center says there have been 657,927,289 doses administered, 267,654,789 have received at least one vaccine, or 81.23% of the U.S. population.

— White House is warning of a possible Covid-19 winter surge, urging Americans to gather and socialize safely with family and friends during the holiday season. "This is not one disease in isolation," White House Covid-19 response coordinator Dr. Ashish Jha told CNN, referring to the concurrent waves of Covid-19, RSV, and the flu. Besides encouraging people to get vaccinated and boosted, the administration said it is restarting the free at-home Covid-19 test program, permitting each American household to order up to four free tests this winter from CoviTests.gov. It is also offering federal resources to local health departments, putting an extra focus on high-risk individuals in nursing homes and other long-term care facilities.

— Long Covid has contributed to over 3,500 deaths in the U.S. The finding by CDC. researchers is the first official tally of the condition’s toll. Long Covid comprises various ailments whose causes still aren’t known. The CDC warned that it may still be undercounting deaths attributable to long Covid, since it’s hard to identify.

— Rural opioid survey: Two in five rural Americans say they know someone who is or was addicted to opioids or prescription painkillers, and one in 20 say they “have abused or been addicted to opioids or prescription painkillers.” Link for details.

— Growth in U.S. healthcare spending slowed to 2.7% last year after a 2020 surge in federal outlays on the pandemic, according to a new government report. The analysis from the Centers for Medicare and Medicaid Services says national healthcare spending grew in 2021 to $4.3 trillion. Overall health spending had risen by 10.3% in 2020.

    
 

— Trump sees some of his lowest poll numbers one month after starting 2024 bid. A Quinnipiac poll released on Wednesday has Trump’s fav/unfav rating at 31% positive, 59% negative among all registered voters — his lowest numbers in the poll since 2015. (Among Republican voters, it’s 70% positive, 20% negative –another low for him since March 2016.) A CNN poll also released Wednesday has similar fav/unfav numbers for the former president: 31% favorable, 60% unfavorable among all adults, representing his lowest favorable score in the poll since 2016. Quinnipiac finds just 25% of all registered voters (and 56% of GOP voters) wanting him as the Republicans’ 2024 presidential nominee. And CNN shows that just 38% of GOP voters think the Republican Party should nominate Trump, versus 62% who want someone else.

     Trump today holds his first event since launching his 2024 presidential bid exactly one month ago, delivering a “major announcement” as he teased on his social media platform.

— 6,670: The combined vote margin in the five closest House races this fall, races that if Democrats had won, would have allowed them to keep the House majority, per analysis from Inside Elections. Link

— Scott given nod to lead Democrats on House Agriculture panel. Politico reports that the Democratic Steering Committee has approved Rep. David Scott (D-Ga.) to continue leading Democrats on the House Agriculture Committee in the new Congress. While House Democrats must still vote on the slate of ranking members, expectations are that Scott will not be displaced from holding the top Democratic position on the panel as they embark on writing a new farm bill.
 

— The Department of Justice filed a lawsuit Wednesday accusing Arizona Gov. Doug Ducey (R) and state officials of trespassing on federal lands by building a wall of shipping containers along the state’s border with Mexico. The 3,000-container wall is estimated to cost $95 million.

— Elon Musk sold nearly $3.6 billion worth of Tesla shares this week, according to Securities and Exchange Commission filings from this week, selling his stock while it trades at a notably reduced price and further eroding his former position as the richest person in the world. This brings the total value of Tesla shares sold by Musk in the past 12 months to nearly $40 billion.

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