Evening Report | February 22, 2024
Check our advice monitor on ProFarmer.com for updates to our marketing plan.
EPA to allow year-round E15 sales in 2025... EPA announced it will allow Midwest states to request year-round availability of E15 fuel starting in 2025. This decision comes as EPA plans to remove the 1-pound per square inch (psi) Reid vapor pressure (RVP) waiver for summer gasoline-ethanol blended fuels containing 10% ethanol. Effective April 28, 2025, the waiver will be removed in Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin. Additionally, EPA will finalize regulatory amendments to remove the 1-psi waiver for E10 in these states and establish a process for requesting reinstatement of the waiver. EPA also intends to eliminate regulations that extended the 1-psi RVP waiver to fuel blends between 10% and 15% ethanol. This decision follows input from public meetings and a comment period, with EPA citing concerns over insufficient fuel supply as a reason for delaying the effective date.
The final rule was sent to the Office of Management and Budget (OMB) for review on Dec. 18 with five meetings held at the agency on the topic. While OMB still showed the final rule as pending review as of Feb. 22, expectations are that will change to being completed as EPA Administrator Michael Regan signed the final rule on that date and it will be published at some point in the future in the Federal Register.
Of note: Prior to EPA’s announcement, USDA Secretary Tom Vilsack said until year-round sales of E15 is cleared next year, the administration would likely issue temporary waivers this summer to enable such sales as needed — as it did in 2022 and 2023. The American Coalition for Ethanol (ACE) said, “The administration rightfully exercised its authority to grant emergency waivers in 2022 and 2023, and we will be pushing for a solution covering the summer of 2024 as well.”
China’s drive to boost oilseed crop faces frigid weather threat... Cold weather in China this week could seriously damage the rapeseed crop, just as Beijing struggles to grow more of the oilseed to boost security of food supplies, Bloomberg reports. Freezing rain and snow may hurt plant stalks and make the crop more susceptible to fungus disease, China-based commodity consultancy Mysteel said in a report Thursday. As much as 30% of rapeseed crop in the top producing provinces of Hunan and Hubei might be seriously damaged, it noted.
Winter wheat drought footprint unchanged... As of Feb. 20, the U.S. Drought Monitor showed 41% of the U.S. was covered by abnormal dryness/drought, up one percentage point from the previous week. USDA estimated 12% of U.S. winter wheat areas were covered by drought, unchanged from the previous week. There is virtually no D3 or D4 drought in winter wheat areas.
In HRW areas, dryness/drought covered 51% of Kansas, 37% of Colorado (none in wheat-heavy eastern areas of the state), 17% of Oklahoma, 40% of Texas, 34% of Nebraska (mostly in southeast and east-central areas), 32% of South Dakota and 88% of Montana.
In SRW areas, dryness/drought covered 63% of Missouri, 25% of Illinois, 24% of Indiana, 12% of Ohio, 62% of Michigan (all in the northern half of the state), 0% of Kentucky and 51% of Tennessee.
World Weather Inc. says winter wheat hardiness against cold weather has decreased in most of the Central and Northern Plains and is decreasing in the Midwest due to unseasonably warm temps. A major change in weather is expected Sunday into next Wednesday, including much colder temps, snow and strong winds. World Weather says, “Winterkill is a consideration for wheat, although 1) some of the wheat was already damaged in the northwestern Plains from bitter cold in January, 2) snow will accompany the cooling trend to help protect some crops and 3) some of the wind will be strong enough blow a few wheat fields free of snow cover.”
Click here to view related maps.
El Niño continues to weaken, despite recent tropical fluctuations... El Niño persists, although a steady weakening trend is evident in the oceanic indicators, according to the Australian Bureau of Meteorology. It says international climate models suggest the central tropical Pacific Ocean will continue to cool in the coming months, with four of seven indicating the central Pacific is likely to return to neutral El Niño–Southern Oscillation (ENSO) levels in April and all models neutral in May. Forecasts beyond May “should be used with caution,” as predictions made in the southern hemisphere late-summer/autumn timeframe tend to be less accurate.
The bureau notes: “Around 50% of El Niño events have been followed by a neutral year, and 40% to 50% have been followed by La Niña. However, global oceans have warmed significantly over the past 50 years. The oceans have been the warmest on record globally between April 2023 and January 2024. These changes may make a difference when predicting future ENSO events based on historical activity.”
Optimism in shipping industry despite challenges... Despite recent challenges such as Houthi attacks in the Red Sea, there is optimism in the global shipping industry due to the influx of container ships ordered two to three years ago, according to industry forecasts cited by the New York Times. These ships were ordered during the pandemic-driven surge in global trade, and their entry into service is expected to help shipping companies maintain regular service, particularly for longer-distance routes.
Moreover, U.S. container imports, especially along the West Coast, are experiencing a surge, as reported by industry observer Freightwaves. The increase in January’s inbound volume, following a rise in December, reflects robust demand for tangible goods and demonstrates the economy’s resilience despite challenges.
China seeking land use reforms... China leader Xi Jinping emphasized the need to reform strict farmland quotas to foster economic development during a recent meeting of the Central Commission for Comprehensively Deepening Reform (CCCDR). China’s current land management system, focused on protecting farmland to ensure food security, hampers development in areas like suburban Shanghai and Shenzhen. CCCDR approved a document to reform land policies, aiming to free up land for development in economically advantageous regions. Pilot efforts are expected to begin this year, potentially unlocking growth potential in industries like food processing and cold chain logistics, according to Trivium China.
U.S., Mexico, and Canada meat groups sign agreement on trade, animal disease issues... The North American Meat Institute, the Canadian Meat Council (CMC) and Consejo Mexicano de la Carne (COMECARNE) signed a Memorandum of Understanding (MOU) to collaborate on enhancing trade, reducing regulatory barriers and improving information sharing among the three countries. The MOU was signed during the COMECARNE annual convention in Mexico.
Additionally, the groups finalized a joint statement of coordination to address foreign animal diseases, sustainability and non-tariff trade barriers. These barriers include challenges related to packaging, labeling policies and burdensome regulations affecting meat production and processing efficiency. The documents have been submitted to regulatory agencies in the U.S., Mexico and Canada to convey the groups’ perspectives and priorities.
Populist senators oppose meatpacking riders... Two farm-state senators, Jon Tester (D-Mont.) and Chuck Grassley (R-Iowa), asked their colleagues to oppose riders on the USDA funding bill that would prevent the agency from enforcing new rules promoting competition in the meatpacking industry. In a letter, the senators oppose weakening the Packers and Stockyards Act to protect family farmers and consumers. They emphasize the Act’s role in ensuring fair practices in the meat industry and highlight concerns about big ag consolidation. Tester and Grassley previously introduced the Meatpacking Special Investigator Act and advocating for producers impacted by anti-dumping duties.
Critical trip about critical minerals... Treasury Secretary Janet Yellen will visit Chile next week in a trip aimed at strengthening ties with a nation rich in critical minerals that stands to benefit from President Joe Biden’s green stimulus program. While in Santiago, Yellen will engage with her counterparts and the private sector “to deepen the bilateral economic relationship between the United States and Chile, with a focus on Chile’s important contribution to the green transition, including its domestic policies to incentivize renewable energy and its role as a supplier of critical minerals,” the Treasury Department said.
Chile’s government is looking to attract foreign capital to help it tap more of the world’s biggest lithium reserves and move further along the battery supply chain. The country’s free-trade agreement with the U.S. means Chile stands to benefit from Biden’s green stimulus program, with materials produced in Chile qualifying for incentives to make more electric vehicles in North America.
Yellen will head to Santiago after attending a meeting of Group of 20 finance ministers and central bankers in Sao Paulo early next week, Treasury said.
