U.S. Hiring Slowed to 150,000 in October; Unemployment Rate Increases to 3.9%

Odds surge for farm bill extension if some House GOP plans to cut food stamp funding prevail

Today’s Digital Newspaper

MARKET FOCUS

Employment numbers point to an economy that is losing steam
Weakest jobs growth since January 2021
ING Economics: Soft jobs report reinforces message that Fed’s work is done
Equities rise on soft jobs report as market heads for best week of 2023
Secret U.S. economy ingredient revealed: increasing productivity
U.S. ports secure $653 million in funding for infrastructure projects
Parent company of Jeep and Chrysler outlines its deal with the UAW
Diesel price drops again
U.S. LNG exports approached all-time high in October
Ag markets today
USDA daily export sale: 131,150 MT soybeans to unknown for 2023-24 marketing year
Indonesia’s state agency secures rice import
Indonesia’s palm oil use for biodiesel to exceed food use for first time
Ag trade update
NWS weather outlook
Pro Farmer First Thing Today items

CONGRESS

House passes Israel aid bill with IRS funding offsets; Senate will not consider it
House to vote on the FY 2024 Interior and EPA funding bills
Johnson: House GOP considering ‘laddered’ approach to stopgap funding

ISRAEL/HAMAS CONFLICT

Blinken arrives in Tel Aviv as pressure grows for Gaza cease-fire

POLICY

Odds surge for 2018 Farm Bill extension on House GOP plans to cut SNAP funding
Another issue in the House: Conservatives balk at 20 “orphan” program funding
Vilsack emphasizes commitment to future ag leaders at National FFA Convention
Republicans pan Biden/Vilsack trip to Minnesota

PERSONNEL

USA Rice CEO Betsy Ward to retire; Peter Bachmann named successor
Castillo named successor President and CEO of NAEGA to succeed Gary C. Martin

CHINA

China aims to avoid local gov’t ‘debt implosion’

TRADE POLICY

USTR Tai: U.S. committed to seamless renewal of Africa trade pact AGOA

ENERGY & CLIMATE CHANGE

Iowa Corn Growers Assn. calls for federal scrutiny of fertilizer prices
Commerce Dept. significantly reduces duties on phosphate fertilizers

LIVESTOCK, NUTRITION & FOOD INDUSTRY

Global food prices dip in October, led by declines in wheat, rice, and palm oil
USDA confirms HPAI in Arkansas broiler pullet operation, endemic spread concerns
Mexico reports first HPAI case of season in poultry farm

HEALTH UPDATE

FDA proposes revoking use of brominated vegetable oil in food due to health concerns

POLITICS & ELECTIONS

Who will control the U.S. House in 2025?
Biden campaign memo lays out plan to frame race around same themes as 2020
Dem governors, senators positioning themselves in case Biden drops out

OTHER ITEMS OF NOTE

Cotton AWP eases again
It's once again time to "fall back" this weekend

MARKET FOCUS

— Equities today: Asian and European stocks were mostly higher overnight, following Wall Street’s solid gains Thursday. U.S. Dow is currently up around 165 points. U.S. equities rebounded after the latest jobs report pointed out that the labor market is cooling reinforcing expectations that the Federal Reserve is unlikely to raise interest rates further. In Asia, Japan closed. Hong Kong +2.5%. China +0.7%. India +0.4%. In Europe, at midday, London -0.1%. Paris -0.1%. Frankfurt +0.2%.

U.S. equities yesterday: All three major indices registered another round of gains Thursday. The Dow rose 564.50 points, 1.70%, at 33,839.08. The Nasdaq gained 232.72 points, 1.78%, at 13,294.19. The S&P 500 was up 79.92 points, 1.89%, at 4,317.78.

— Agriculture markets yesterday:

Corn: December corn futures fell 5 cents to $4.70, ending near session lows.
Soy complex: January soybeans rose 13 1/4 cents to $13.28 1/4, marking the highest close since Oct. 19. December meal fell $4.10 to $426.30, the lowest close since Oct. 23. December soyoil closed 42 cents higher at 50.32 cents after marking a five-month low early on.
Wheat: December SRW wheat rose 3 3/4 cents to $5.65 1/2 and nearer the session high. December HRW wheat gained 1 1/2 cents at $6.41 1/2 and nearer the session low. December spring wheat futures closed 1 3/4 cents higher at $7.10 3/4.
Cotton: December cotton rose 36 cents to 79.80 cents, a low-range close after marking an intraday high of 80.82 cents.
Cattle: December live cattle rose $1.05 to $184.675 and nearer the session high. January feeder cattle leapt $4.15 to $242.175 and near the session high.
Hogs: Hog futures surged Thursday, with nearby December leading the way higher with a $3.125 advance to $73.275.

— Ag markets today: Corn, soybeans and wheat held in relatively tight ranges while spending time on both side of unchanged during overnight trade. As of 7:30 a.m. ET, corn futures were trading a penny lower, soybeans were 4 to 7 cents higher, SRW wheat was fractionally to a penny higher, while HRW and HRS wheat were 1 to 2 cents lower. Front-month crude oil futures were modestly higher, and the U.S. dollar index was around 225 points lower.

Still waiting on active cash cattle trade. Cash cattle negotiations have been slow to develop this week. While packers and feedlots work to find a price that will trigger sales, price action in futures on Thursday suggests traders believe cash cattle will eventually trade at higher levels than last week.

Traders continue to narrow hog futures discount. December lean hog futures surged $3.125 on Thursday, finishing at $73.275. The CME lean hog index is down another 10 cents to $76.84 as of Nov. 1. The discount in the lead contract is down to $3.565. The strong rally in hog futures the past two weeks suggests traders feel the cash market won’t suffer its normal seasonal decline into winter.

— Quotes of note:

“The Fed meeting is behind us. We can now look forward to some of the economic data and see if that confirms the Fed can stay on hold indefinitely,” said Megan Horneman, chief investment officer at Verdence Capital Advisors.
"The only way to get from hunter-gathering to civilization that we know of that’s ever worked is to have a strong currency. It can be seashells, it can be corn kernels, it can be a lot of things. It can be gold coins, it can be promises in banking systems like we have in the United States and England and so on." — Berkshire Hathaway Vice Chairman Charlie Munger, in an interview with the WSJ.
“The United States is working with partners on what I’ve called 'friendshoring,' meaning diversifying our supply chains with a range of trusted partners and allies. This has tremendous potential benefits for fueling growth in Latin America and the Caribbean.” — Secretary of the Treasury Janet Yellen, speaking at the Inter-American Development Bank Responsible Investment Forum.
"Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history," U.S. Attorney Damian Williams, whose office led the investigation, said at a press conference outside the courthouse. "The cryptocurrency industry might be new; the players like Sam Bankman-Fried might be new, but this kind of fraud, this kind of corruption, is as old as time, and we have no patience for it. It's a warning to every single fraudster out there who thinks that they're untouchable, or that their crimes are too complex for us to catch, or that they're too powerful for us to prosecute." Bankman-Fried, the founder of cryptocurrency exchange FTX, was found guilty on all charges in his monthlong fraud and conspiracy trial on Thursday, nearly a year after his company filed for bankruptcy. Bankman-Fried was convicted on seven counts of wire fraud, securities fraud and money laundering after prosecutors say he was caught stealing $8 billion from his customers.

— U.S. economy adds 150,000 jobs in October; manufacturing hit by strikes, labor market slows. In October 2023, the U.S. economy added 150,000 jobs, marking a significant slowdown compared to a downwardly revised figure of 297,000 in September and falling below market expectations of 180,000. The report highlights a gradual cooling of the labor market, with several strikes, including those involving UAW members, having an impact on manufacturing payrolls. (Since the strike is resolved, that should mean a recovery in the manufacturing sector in next month’s data.)

Job gains were observed in various sectors, including health care (58,000), particularly in ambulatory health care services (32,000) and hospitals (18,000); government (51,000), which has returned to its pre-pandemic February 2020 levels; construction (23,000); social assistance (19,000); leisure and hospitality (19,000); and professional and business services (15,000).

However, employment in the manufacturing sector declined significantly by 35,000 jobs, surpassing forecasts of a 10,000-job loss. This decline was primarily driven by a 33,000 drop in motor vehicles and parts manufacturing, largely attributed to strike activities.

The unemployment rate in the U.S. increased to 3.9% in October 2023, slightly exceeding market expectations and the previous month's figure of 3.8%. This marks the highest jobless rate since January 2022, with the number of unemployed individuals rising by 146,000 to 6.51 million, while the count of employed individuals decreased by 348,000 to 161.2 million.

Average hourly earnings rose 0.2% in October and were up 4.1% over the past 12 months, showing deceleration.

Bottom line: While October's job gains were below the average monthly increase of 258,000 over the previous 12 months, they still exceed the range of 70,000 to 100,000 jobs needed each month to keep pace with the growth in the working-age population.

ING Economics: “Payrolls is the number that markets focus on and with unemployment rates and wages softening it all reinforces the view that the Fed is finished hiking interest rates.”

Wells Fargo economists: “Less need to squint to see jobs market cooling.”

Market impact: No change in rates based on CME Fed funds futures in December is the overwhelming probability; same in January. Do not get odds for a 25 bp cut in the lead until the May meeting.

— U.S. economic growth recipe: the secret ingredient revealed. To achieve simultaneous economic growth, rising real wages, and a decrease in inflation, the key ingredient is increasing productivity. The Labor Department delivered positive news on this front, reporting a 4.7% annual growth in labor productivity during the third quarter. This marks the second consecutive quarterly improvement and the most significant progress in productivity seen in three years. Oxford Economics economist Michael Pearce explained that this higher productivity growth is providing essential support to the economy's supply side, contributing to the ongoing decline in inflation while maintaining strong economic growth.

— U.S. ports secure $653 million in funding for infrastructure projects. The White House announced over $653 million in awards for port infrastructure projects spanning 26 states and territories, as part of an effort to fortify supply chains in the aftermath of the pandemic. Notable allocations include $52.6 million for a rail expansion and roadway improvement endeavor in Long Beach, California, and $54.2 million for a port terminal expansion in Tacoma, Washington.

These awards encompass 41 projects, selected from a competitive pool of 153 applications seeking a total of $2.8 billion in financing. While around a quarter of these projects are situated on the East Coast, a similar proportion is located inland and, in the Midwest, including initiatives in Arkansas and Wisconsin. Furthermore, seven projects have been earmarked for Alaska.

Addressing the challenges posed by supply chain disruptions and bottlenecks, Transportation Secretary Pete Buttigieg emphasized the objective of enhancing American supply chains beyond their pre-pandemic state. Nearly half of the projects are expected to benefit historically disadvantaged communities.

Approximately two-thirds of the $653 million funding comes from the $1.2 trillion Bipartisan Infrastructure Law, which allocates $450 million annually for port infrastructure over five years. The remaining one-third has been appropriated by Congress.

Source: Bloomberg

Market perspectives:

— Outside markets: The U.S. dollar index was lower ahead of U.S. trading, with the euro and British pound stronger against the greenback. The yield on the 10-year U.S. Treasury note was lower, trading around 4.65%, with a mixed-to-negative tone in global government bond yields. Crude oil futures were up, with U.S. crude at around $83.20 per barrel and Brent at around $87.40 per barrel. Gold and silver futures were mixe, with gold higher around $1,995 per troy ounce and silver lower around $22.74 per troy ounce.

— Parent company of Jeep and Chrysler outlined its deal with the UAW. Stellantis said that besides raising factory worker salaries by 25% over four years — largely similar to concessions that the union won from Ford — it would invest nearly $19 billion in manufacturing plants in the U.S. Meanwhile, Detroit automakers agreed to pay UAW workers for their time on strike.

— Diesel price drops again. After rising 10.1 cents per gallon last week, the U.S. average diesel fuel price dropped 9.1 cents this week. For the week ending Oct. 30, the U.S average weekly diesel price was $4.454 per gallon, 86.3 cents behind the same time last year. Diesel’s average price fell in all 10 regions in the Energy Information Administration’s weekly survey — with double-digit declines in five regions.

After rising 25 cents per gallon last week and accounting for much of the increase in the U.S average diesel price last week, the Midwest diesel price dropped 11.3 cents, to $4.441 per gallon. According to Reuters, last week’s Midwest price surge — across Minnesota, Iowa, and Kansas — largely came from diesel maintenance-related outages at Phillips 66’s 208,000 barrel-per-day (bpd) Ponca City refinery in Oklahoma. Prices fell after the refinery returned to production and increased diesel supplies from Chicago, the Gulf Coast, and other areas filled the gaps. Still, Midwest diesel inventories remain tight and could be problematic if other refining issues emerge. (Sources: EIA, USDA Grain Transportation Report)

— U.S. LNG exports approached all-time high in October. U.S. liquefied natural gas (LNG) exports totaled 8.73 million short tons in October, nearly matching the 8.82-million-short-ton record set in April, LSEG data show. Europe's share of U.S. LNG exports increased to 60% during the month, while Asia and Latin America received 20% and 5% of the volumes, respectively. Link to Reuters for details.

— USDA daily export sale: 131,150 MT soybeans to unknown for 2023-24 marketing year.

— Indonesia’s state agency secures rice import contracts. Indonesia’s state food procurement agency Bulog has secured contracts for 1 MMT of rice imports from Thailand, Vietnam, Pakistan and Myanmar. Bulog will also explore rice imports from India and Cambodia. Last month, Indonesia said it will import an additional 1.5 MMT of rice in 2023, as drought cut domestic supplies.

— Indonesia’s palm oil use for biodiesel to exceed food use for first time. Indonesia’s domestic palm oil consumption for biodiesel will exceed its consumption for food for the first time in 2023, the Indonesia Palm Oil Association said. Meanwhile, the country’s palm oil output is expected to drop at least 1 MMT next year due to impacts from El Niño. Indonesia is expected to fully implement mandatory B35, biodiesel using 35% palm oil mix, in 2024.

— Ag trade update: South Korea purchased 50,000 MT of U.S. milling wheat.

— NWS weather outlook: Great Plains warm up this weekend... ...Several rounds of moderate to locally heavy precipitation to continue into portions of the Pacific Northwest, Northern Rockies and northern California this weekend into early next week.

Items in Pro Farmer's First Thing Today include:

• Lightly traded overnight session
• Russia cuts wheat export tax

CONGRESS

— House passes Israel aid bill with IRS funding offsets; Senate will not consider it. The House on Thursday cleared a $14.3 billion supplemental funding bill for Israel, with a vote of 226-196 (12 Democrats voted for it). This move has ignited a partisan dispute, primarily along party lines, due to its inclusion of an equal cut to tax enforcement funding at the Internal Revenue Service (IRS). Democrats have criticized this inclusion as a partisan tactic and Senate Majority Leader Chuck Schumer (D-N.Y.) said he would not even consider the measure.

House Speaker Mike Johnson (R-La.) defended the offset of $14.3 billion from the IRS, describing it as an effort to restore fiscal responsibility. He argued that this was the most readily available source of funding to meet the immediate obligations of the bill. However, the Congressional Budget Office (CBO) released an analysis indicating the House bill would not be self-financing and would instead increase the deficit by $12.6 billion over the next decade.

Democrats noted concerns that this provision deviated from the long-standing precedent of not attaching conditions to emergency aid, and they argued that it would delay necessary assistance to Israel during its ongoing conflict.

The Senate, which is out today, could soon consider a bill that pairs aid to Israel, Ukraine and Taiwan — likely with provisions addressing the U.S./Mexico border crisis but not with policy language favored by Republicans. Johnson has told Senate Republicans he won’t accept grouping aid to Israel and Ukraine.

Of note: “If we walk away from Ukraine, the Europeans are going to say, ‘Why can we count on you? We were with you on ill-considered wars in Iraq and Afghanistan,’” Sen. Mitt Romney (R-Utah) said. “‘Now, when we need your help, you’re going to walk away?’”

— House is slated to vote on the FY 2024 Interior and EPA funding bill. GOP leaders delayed consideration of the Transportation, Housing and Urban Development funding bill, which was also supposed to receive a vote today but there were GOP differences over funding cuts to rail programs.

— Johnson: House GOP considering ‘laddered’ approach to stopgap funding. House Speaker Mike Johnson (R-La.) said Thursday that Republicans are considering a new approach to stopgap funding that would extend pieces of current appropriations for different time periods, effectively setting up a series of funding cliffs while avoiding a single deadline that could trigger a partial government shutdown for all agencies. Johnson said at a press conference that some GOP members raised the idea of a ‘laddered CR’ to extend funding on a piecemeal basis.” Johnson said, “I’ll unpack for you what that means here in the coming days, but potentially you would do a CR that extends individual pieces of the appropriations process, individual bills.” Roll Call says the idea of the “laddered” approach, “which hasn’t been fleshed out in any real detail at this point, would be to keep the pressure on the Senate to pass that chamber’s bills and start conference talks with the House while ensuring parts of the government remain funded.”

Bottom line: This approach is not expected to prevail.

ISRAEL/HAMAS CONFLICT

— U.S. Secretary of State Antony Blinken arrived in Tel Aviv. He is expected to call for a humanitarian pause in the fighting in Gaza. Earlier, Israel’s army said it had encircled Gaza city and was engaged in close fighting with Hamas militants. Israel’s government said it was “severing all contact with Gaza” and would return Gazans working in Israel to the besieged enclave. A group of UN experts called for a ceasefire and warned of the “grave risk of genocide” in Gaza; Israel said they were parroting Hamas.

POLICY UPDATE

— Odds surge for one-year 2018 Farm Bill extension if some House GOP plans to cut food stamp funding prevail. House GOP efforts to find billions of dollars in savings to help reform Title I safety net programs will go nowhere with Democrats and will be blocked in the Senate, sources advise. One House GOP proposal under view would place new guardrails on a recent Biden administration update to the Thrifty Food Plan that has significantly increased SNAP/food stamp spending.

Another issue in the House: There are around 20 “orphan” programs that would need roughly $100 million in additional funding to keep going. But that extra money is a tough sell among rebel and other conservatives in the GOP-majority House.

— Vilsack emphasizes commitment to future agricultural leaders at National FFA Convention. USDA Secretary Tom Vilsack highlighted the USDA's commitment to the future of agriculture during his address at the 96th National FFA Convention and Expo in Indianapolis. At the convention, a Memorandum of Understanding (MOU) was signed formalizing a partnership between USDA and the National FFA Organization. The MOU aims to prepare more students for careers in food, agricultural science, natural resources, and related fields.

Vilsack emphasized USDA's vision to secure the future of American agriculture, with a focus on enabling farms of all sizes to succeed. This involves transforming the agricultural system to support small and mid-sized farms, strengthen local rural economies, enhance food security and safety, and create opportunities for all producers and communities.

During his speech, Vilsack discussed recent investments in rural America, which aim to increase revenue for farms, promote economic development in rural areas, and provide more opportunities across the country. He highlighted the importance of today's youth in shaping tomorrow's food system and encouraged all producers to succeed.

Scott Stump, CEO of the National FFA Organization, expressed gratitude for Secretary Vilsack's dedication to agricultural education and FFA. The MOU between USDA and FFA is seen to continue nurturing the next generation of agricultural leaders, engage young people in agriculture, and empower them to meet the evolving needs of the industry.

Under the MOU, USDA commits to raising awareness of agriculture's significance across various fields and disciplines. The USDA will also communicate available internship opportunities to FFA members and alumni, identify areas where student or youth perspectives can benefit USDA programs, and collaborate with FFA to provide such representation.

Background. The National FFA Organization, with over 945,000 student members in 9,163 local FFA chapters across the U.S. and its territories, operates on local, state, and national levels. The partnership with USDA aims to attract, educate, inspire, and equip students with the tools needed for success.

During the convention, Vilsack was awarded the Honorary American FFA Degree, an honor bestowed upon individuals who have made exceptional contributions on a national level to agriculture, agricultural education, or FFA. He also participated in a roundtable discussion with young leaders in agriculture from across the country.

— Republicans pan Biden/Vilsack trip to Minnesota. President Joe Biden and USDA Secretary Tom Vilsack headed to Northfield, Minnesota, this week to spearhead a “Bidenomics” effort to boost rural economic development, announcing billions of dollars for climate-smart and other conservation funding. Republicans said it would only underscore concerns of high interest rates and inflation, which they say are largely a result of the kinds of government spending the president is showcasing.

“I don’t think any of us are surprised that a president that’s behind in the polls would be kicking off his campaign in rural America,” Sen. Chuck Grassley (R-Iowa) told reporters. The U.S. “has not seen inflation like this since President Carter” left office in 1980, Grassley said, blaming it for driving agricultural “inputs" — diesel, fertilizer, chemicals, and seeds — skyward.

Growers “don’t have the ability to pass on to the rest of the economy” cost increases the way food processors and grocery stores can through higher prices, Grassley said. He urged Biden to listen to rural families, and if he did, the message would be “very loud and very clear: “Bidenomics is not working for rural farmers and their families.”

Bottom line: The billions of dollars "unveiled" were mostly a repackaging of items already known. Some Republicans also noted that the Biden administration messageneglects central issues for Minnesota farmers: renewable fuels, disaster aid, an effective farm bill safety net and crop insurance program.

PERSONNEL

— USA Rice CEO Betsy Ward to retire; Peter Bachmann named successor. USA Rice President & CEO Betsy Ward, who has dedicated nearly four decades advocating for U.S. agriculture and forestry, is set to retire after 18 years at USA Rice, with 16 of those years spent in her current role. In her place, Peter Bachmann, who has been the vice president of policy & government affairs at USA Rice since 2019, has been named as her successor by the Board of Directors.

Before her tenure at USA Rice, Ward spent two decades directing forest and wood industry trade policy, including navigating significant challenges at the World Trade Organization. She has held various leadership roles, including chairing the U.S. Agricultural Export Development Council and vice-chairing the Sustainable Fisheries Partnership. Ward is also a member of the CEO Agriculture Council. Expressing her passion for serving those who are stewards of the planet, Ward highlighted her dedication to promoting and defending the way of life for producers, whether in forests, farms, or fisheries. She expressed gratitude for the partnerships formed with farmers, millers, merchants, end-users, and rice customers during her career.

Peter Bachmann, a native of Maryland and a graduate of Virginia Tech, had previously worked on domestic farm policy issues at USA Rice from 2015 to 2017. He then served as a senior advisor to Secretary Sonny Perdue at USDA, contributing to the 2018 Farm Bill process, trade mitigation packages in 2018 and 2019, and advocating for U.S. agricultural exports. Upon returning to USA Rice, Bachmann directed trade policy and joined Ward's leadership team.

The transition of leadership is scheduled for Nov. 15, with Ward continuing as an advisor until mid-December. A retirement celebration is planned for Dec. 8, 2023, at the conclusion of the USA Rice Outlook Conference in Indian Wells, California.

— Alejandra Castillo named successor President and CEO of NAEGA to succeed Gary C. Martin. The Board of Directors of the North American Export Grain Association (NAEGA) announced the appointment of Alejandra Castillo as the successor President and CEO. With 15 years of industry experience, Castillo has previously served in various roles, including as a regional director for South Asia based in Singapore and India, as well as the Director of Global Programs in Washington, D.C. for the U.S. Grains Council. Her background also includes experience in trade execution at Cargill, Inc. This appointment comes as part of a planned transition, as the current President and CEO of NAEGA, Gary C. Martin, intends to step down from the role in 2024.

CHINA UPDATE

— China aims to avoid local gov’t ‘debt implosion’. Preventing a local government “debt implosion” is a top priority, China’s securities regulator was quoted by state media China Securities Journal as saying. China should resolve bond default risks of large property firms and strengthen risk monitoring alerts for the debt of local government financing vehicles, the regulator noted.

TRADE POLICY

— USTR Tai: U.S. committed to seamless renewal of Africa trade pact AGOA. The United States is dedicated to ensuring the smooth renewal of the African Growth and Opportunity Act (AGOA), its preferential trade pact with Africa, which is set to expire in two years. U.S. Trade Representative Katherine Tai expressed this commitment during her visit to Johannesburg for an annual forum on AGOA. Tai emphasized the goal of a "seamless renewal" of AGOA and discussed plans to modernize the agreement. President Joe Biden has expressed strong support for AGOA's reauthorization and urged Congress to act promptly, signaling the U.S.' dedication to the region amid increasing interest from China.

The U.S. is also looking into enhancing utilization rates under AGOA, particularly for poorer countries, and providing support to nations that achieve middle-income status. Tai noted that once countries graduate from AGOA, they essentially start from scratch in terms of their trade relationship with the U.S.

Additionally, AGOA can be used to impose penalties on countries that do not meet eligibility requirements, including upholding human rights and democracy. President Biden recently revoked AGOA eligibility for four countries, including Uganda due to its anti-LGBTQ laws, Central African Republic, Gabon, and Niger.

ENERGY & CLIMATE CHANGE

— Iowa Corn Growers Assn. calls for federal scrutiny of fertilizer prices, seeks inclusion in new farm bill. Farmers in Iowa, the largest corn-producing state in the U.S., are advocating for federal lawmakers to examine the pricing practices of fertilizer companies and assess the impact of rising costs on both farmers and consumers. The Iowa Corn Growers Association has drafted language that they aim to incorporate into the upcoming farm bill. The proposed addition focuses on "reviewing competition and transparency in the fertilizer industry," with the provision mandating an assessment of fertilizer pricing by USDA. If adopted, this requirement would serve the dual purpose of helping farmers comprehend the reasons behind recurring fertilizer price hikes and providing Congress with "adequate information on the exertion of market power by companies within the industry," as highlighted by the Iowa Corn Growers Association.

— Commerce Dept. significantly reduces duties on phosphate fertilizers, a victory for corn growers. The U.S. Department of Commerce announced a substantial reduction in duties on phosphate fertilizers imported from Morocco, lowering them from 19.97% to 2.12%. This decision follows an annual administrative review of the duties, which involves retroactively examining shipment prices and other factors.

The National Corn Growers Association (NCGA), a vocal opponent of these duties, hailed the decision as a significant win for corn growers. NCGA President Harold Wolle credited the victory to corn growers nationwide who voiced their concerns about the tariffs, especially amid soaring fertilizer prices and product shortages driven by The Mosaic Company.

Background. The issue originated from a 2020 decision by the Commerce Department, favoring a petition by Mosaic to impose duties on phosphate fertilizers imported from Morocco and Russia. Mosaic alleged that foreign companies were unfairly subsidizing fertilizers and flooding the U.S. market with low-priced products. In response to the decision, NCGA launched a robust campaign, urging Commerce to reverse its ruling and calling on Mosaic to withdraw its tariff request. Over the past three years, NCGA has taken various actions, including filing an amicus brief, sending a letter to the White House, and informing Members of Congress about the impact on farmers. In October of this year, NCGA and 62 other agricultural groups sent a letter to Commerce Secretary Gina Raimondo, asking her to consider the challenges faced by farmers as she recalculated duties on phosphate fertilizer imported from Morocco. These collective efforts culminated in the recent decision.

Of note: Separately, in September, the U.S. Court of International Trade instructed Commerce to reassess the duty rate calculation due to flaws found in its analysis. A decision on this matter is expected on Dec. 13. The ITA is currently seeking comments on the court remand through November 27.

LIVESTOCK, NUTRITION & FOOD INDUSTRY

— Global food prices dip in October, led by declines in wheat, rice, and palm oil. In October 2023, global food prices experienced a slight decline due to decreases in the prices of wheat, rice, palm oil, and pork, as reported by the UN Food and Agriculture Organization (FAO) in its Food Price Index. The index eased to 120.6 points, marking a 0.7-point (0.5%) decrease from September and a substantial 14.8-point (10.9%) drop compared to the previous year.

The decline in October was driven by lower price indices for sugar, cereals, vegetable oils, and meat, with the dairy products index showing a rebound. Cereal prices fell by 1%, primarily influenced by a 2% drop in international rice prices, attributed to subdued global import demand, and a 1.9% decrease in wheat prices, driven by ample supplies from the United States and competitive exporting. Meanwhile, global corn prices experienced a slight increase due to tighter supplies in Argentina.

Lower palm oil prices offset higher prices for soyoil, sunflower oil, and rapeseed oil, driven by robust demand from the biodiesel sector. Although sugar prices declined by 2.2%, they remained significantly higher, standing at 46.6% above the levels observed in 2022. Pork prices also decreased due to reduced import demand in East Asia.

Bottom line: Throughout 2023, the food price index has been on a gradual decline, though it remains above the 2020 benchmark of 98.1.

— USDA confirms HPAI in Arkansas broiler pullet operation, raising concerns of potential endemic spread. USDA's Animal and Plant Health Inspection Service (APHIS) confirmed another case of Highly Pathogenic Avian Influenza (HPAI), this time in a commercial broiler breeder pullet operation in Arkansas, affecting approximately 31,600 birds. This announcement follows recent confirmations of HPAI in commercial turkey operations in Meeker County, Minnesota (32,100 turkey meat birds), Beadle County, South Dakota (29,700 turkey meat birds), and Merced County, California (31,600 turkey meat birds). The situation in South Dakota involves eight affected flocks, totaling 321,300 turkeys, while Minnesota has reported 10 commercial flocks and two backyard flocks with a combined total of 362,450 birds affected.

Notably, this outbreak is spreading in counties that had previously reported HPAI cases, raising concerns that the disease may be becoming endemic in certain areas.

— Mexico reports first HPAI case of the season in poultry farm, prompting quarantine measures. Mexico reported its initial case of H5N1 highly pathogenic avian influenza (HPAI) in the current season, affecting a poultry farm in the northwestern state of Sonora with 105,000 laying hens. As a precautionary measure, Mexican authorities have implemented a quarantine in the affected area. Additionally, another farm located 3 kilometers (about 1.83 miles) away has also been identified as having H5N1 HPAI, impacting 54,000 birds.

In 2022, Mexico initiated extensive bird flu vaccinations in high-risk regions, including Sonora, to mitigate the potential spread of the virus. Officials are now considering a new vaccination strategy that may be implemented this month.

Of note: Mexico primarily relies on domestic poultry consumption, with only 1% of its poultry production being exported, according to the U.S. agricultural attaché in Mexico.

HEALTH UPDATE

— FDA proposes revoking use of brominated vegetable oil in food due to health concerns. The Food and Drug Administration (FDA) released a proposal (link) to revoke the authorization for the use of brominated vegetable oil (BVO) in food. BVO is a vegetable oil modified with bromine, often used in small amounts to prevent citrus flavorings from separating in certain beverages. The proposal comes in response to recent data from studies conducted by the agency, which have revealed adverse health effects in animals at levels more closely resembling human exposure. These findings include the bioaccumulation of bromine and toxic effects on the thyroid, a gland crucial for regulating various bodily functions. Given the unresolved safety questions and the potential risks associated with BVO, the FDA said it can no longer conclude that its use in food is safe. The proposed rule for revoking the authorization of BVO is published in the Federal Register (link).

Of note: The European Union has already banned BVO, and California recently signed a bill into law that will prohibit the use of BVO, along with Red Dye 3, potassium bromate, and propyl paraben in food produced and sold in the state starting in 2027.

POLITICS & ELECTIONS

— Who will control the U.S. House in 2025? These 10 California congressional races could decide, according to an article (link) in the Sacramento Bee.

— Biden campaign memo lays out plan to frame race around same themes as 2020. The Associated Press reports (link) that President Biden’s campaign “is outlining a plan to retain the White House by framing the 2024 race around many of the same themes it used in 2020 — presenting a contrast with Donald Trump ‘s ‘Make America Great Again’ movement stark enough to reenergize its winning coalition of supporters.” The AP cites a strategy memo in which Biden campaign manager Julie Chavez Rodriguez “said her team is already looking beyond the Republican presidential primary to a general election ‘that will be very close.’ But ‘the message Joe Biden ran on in 2020 remains popular with voters and central to this campaign.’” Rodriguez wrote, “The president and vice president have a strong message that resonates with voters, a clear contrast with whoever the MAGA Republican Party nominates. ... This campaign will win by doing the work and ignoring the outside chatter – just like we did in 2020.”

— Democratic governors, senators positioning themselves in case Biden drops out of presidential race. Axios reports (link) Democratic governors and senators are “quietly moving to boost their national profiles and position themselves to run for president in 2028 — or in 2024, if President Biden unexpectedly drops out.” While the Democrats “all support Biden’s re-election” and are “drawing battle lines for the next race for the White House,” Axios says the “early jockeying is also a hedge against Biden, 80, having a health scare or deciding not to run for re-election.” According to Axios, Illinois Gov. J.B. Pritzker, Pennsylvania Gov. Josh Shapiro and California Rep. Ro Khanna have traveled to New Hampshire in recent months and Sen. Cory Booker (D-N.J.) will headline a panel in South Carolina on health care and abortion rights on Nov. 18. In addition, Michigan Gov. Gretchen Whitmer, California Gov. Gavin Newsom and Pritzker all recently launched national political groups.

OTHER ITEMS OF NOTE

— Ag groups applaud court's defense of science-based regulation in chlorpyrifos ruling. U.S. agricultural organizations are celebrating a recent ruling by the 8th Circuit Court of Appeals that upholds science-based regulation by overturning the Environmental Protection Agency's (EPA) rule effectively prohibiting the use of chlorpyrifos, a tool used by farmers to protect crops from pests. The court determined that the EPA disregarded its own scientists' findings, leading to the discontinuation of many safe uses of chlorpyrifos. As a result, the rule has been vacated, allowing agricultural uses of the product to be reinstated.

Daryl Cates, soybean farmer and American Soybean Association president, stated: "Today's ruling is a win for agriculture and science-based regulation. Federal agencies cannot be permitted to ignore their own science at the expense of America's farmers. This ruling will restore safe, effective uses of a tool needed by many growers to protect crops from damaging pests and help preserve an affordable food supply."

Background. A coalition of agricultural groups filed a lawsuit against the EPA in February 2022, seeking to restore farmers' ability to use chlorpyrifos to protect crops. They pointed out that EPA career scientists identified at least 11 high-benefit, low-risk agricultural uses of chlorpyrifos that could be safely maintained, as documented in the EPA's own records.

Zippy Duvall, president of the American Farm Bureau Federation, praised the court's recognition that the EPA failed to adhere to its own standards when revoking an essential crop protection tool for farmers. Duvall emphasized that farmers prioritize growing safe and nutritious food and rely on science to determine the safety of such tools.

Nate Hultgren, President of the American Sugarbeet Growers Association, emphasized that the court's decision allows the industry to safely use chlorpyrifos to protect plants and maintain the economic viability of farmers. Growers are eager to see the return of chlorpyrifos for the 2024 growing season after experiencing challenges in 2022 and 2023 due to its unavailability.

Chris Bardenhagen, Cherry Marketing Institute crop management specialist, noted that chlorpyrifos is the only effective tool for combatting borer pests in cherry orchards, and the court's decision ensures that the EPA follows its own determination to prevent tree loss problems in the future.

The ag groups anticipate engaging with the EPA during the chlorpyrifos registration review process to ensure the retention of critical and safe uses of the product in the years ahead.

— Cotton AWP eases again. The Adjusted World Price (AWP) for cotton fell to 68.11 cents per pound, effective today (Nov. 3), down from 68.72 cents per pound the prior week and the third week in a row under 70 cents. Meanwhile, USDA announced that Special Import Quota #3 will be established Nov. 9 for the importation of 39,634 bales of upland cotton, applying to supplies purchased not later than Feb. 6 and imported into the U.S. not later than May 6.

— It's once again time to "fall back" this weekend. Daylight saving time ends for most of the U.S. at 2 a.m. local time on Sunday, Nov. 5. Daylight saving time returns on March 10, 2024.

KEY LINKS

U.S. Hiring Slowed to 150,000 in October; Unemployment Rate Increases to 3.9%

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