Evening Report | June 3, 2021
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Rains have little to no impact on Northern Plains drought… Rain fell on the Southern Plains and from the Mid-Atlantic to the Northeast, easing drought in those areas, according to today’s National Drought Monitor. Precipitation also fell in the South and in some areas of the Midwest, but the Southeast and Southwest remained dry.
On the High Plains, temperatures were cool, but precipitation did little to change drought conditions in the region. In fact, severe drought was introduced over southeast South Dakota, and the area affected by moderate drought and abnormal dryness expanded in the state. All of North Dakota is affected by abnormal dryness or drought, with 93% of the state classified as severe drought or worse.
Conditions were also cool in the Midwest the week ended June 1. Today’s drought summary notes, “Dry conditions dominated Iowa, northern Minnesota, northern Wisconsin into the upper peninsula of Michigan, and southern portions of Indiana and Ohio. In the northern portions of Illinois, Indiana and Ohio, improvements to abnormally dry and moderate drought conditions were made in response to a series of rain events.” Roughly 62% of Iowa is dealing with abnormal dryness or drought, with the northwest part of the state the hardest-hit. Find related maps.
Early Argentine corn yields better than expected… Argentina’s late-planted corn crop is yielding better than expected, according to the Buenos Aires Grain Exchange, who reports more than a third of the crop has now been harvested. Nevertheless, the exchange left its corn crop estimate at 46 MMT. It continues to project the Argentine bean crop at 43.5 MMT. Dry weather is slowing wheat planting in the country, the exchange notes, but it expects good rain in central Argentina to make up for losses in northern areas. The exchange still expects producers to seed 6.5 million hectares (16.1 million acres) to wheat this season.
India moves up target date for E20 blend… India has again pulled forward its target date for reaching a 20% ethanol blend (E20) in gasoline to April 1, 2023, two years earlier than previously planned. The country initially set a target of E10 by 2022 and E20 by 2030, but earlier this year the country pulled its target dates. India relies on imports to meet more than 85% of its oil needs. Blending more ethanol into fuel should help ease its dependence on imports, while cutting back on pollution. The Hindustan Times reports the country will need an additional 10 billion liters of ethanol to meet its 20% blend target. This is expected to result in more sugar cane being processed for ethanol at the expense of sugar. The shift will also hinge in large part on how quickly car manufacturers can adapt to the new engine specifications.
U.K.’s Heathrow airport incorporates sustainable aviation fuels… Britain’s Heathrow Airport announced it will use sustainable jet fuel for the first time, an announcement that comes ahead of the Group of Seven summit in the country next week. The fuel produced by Neste and supplied by Vitol is made entirely of renewable and sustainable waste like cooking oil and animal fat, according to the airport and the involved companies. They also report the fuel cuts greenhouse gas emissions by up to 80% relative to regular aviation fuel. But it is also two to four times more expensive than regular fuel, according to an April factsheet released by the International Air Transport Association (IATA).
Delivery of the fuel (enough for around 10 short-haul flights) started today and it will be incorporated into the airport’s main fuel supply.
"The short-term target is to build SAF usage to 2% of the total amount of fuel consumed by 2025. At that level, the SAF price should start to move towards fossil fuel prices, allowing for a faster and broader take-up by airlines," IATA said.
Biden offers concession to GOP on corporate taxes as part of effort to secure infrastructure deal… During a private meeting on infrastructure with Senator Shelley Moore Capito (R-W.Va.) on Wednesday, President Joe Biden reportedly proposed a new 15% minimum tax rate for corporations as a way to prevent dozens of companies from paying little to no taxes. This comes after Republicans had largely balked at his proposal to raise the corporate rate from 21% to 28%. Negotiations are set to resume on Friday, with Republicans working on yet another counter-proposal. Biden also reportedly offered to use $75 billion of unspent Covid aid funding for part of the pay-for. This signals Biden wants a bipartisan accord, contrary to some Congressional Democrats who would prefer to bypass Republicans altogether and pass a bill via reconciliation. Even with these compromises, a large gap exists between the two sides.
U.S. economic recovery is unlike any in recent history… The recovery has been powered by consumers with extra savings, businesses eager to hire and enormous policy support. Businesses and workers are poised to emerge from the downturn less damaged than after recent recessions. New businesses are popping up at a record pace. But the speed of recovery means that shortages typical for late in an expansion are cropping up much sooner — not just of goods and raw materials but of labor. Looking to coax people back into the workforce, congressional lawmakers of both parties are considering incentives such as federal funding for hiring bonuses and expanded tax credits for employers. A handful of states are moving on their own.
Talks underway between government and livestock producers regarding export ban on beef… Argentina’s Agroindustrial Council (CAA) issued a statement today saying Argentine meat producers will continue to hold talks with the government with the goal of lifting a one-month suspension on exports of beef. The suspension aimed at curbing domestic food price inflation was declared May 17, much to the chagrin of livestock producers. They responded with a halt of domestic livestock sales that ended at midnight Wednesday. Farm leaders have threatened to again choke off livestock sales and expand the strike to grain sales if progress is not made on talks. Dardo Chiesa, the coordinator of the Mesa de las Carnes, an association that brings together many in the sector, met with President Alberto Fernandez on Wednesday. A statement released by CAA says, “The representatives of the CAA agreed with the national authorities to deepen the search for long, medium and short-term consensual policies to correct the situation by promoting the supply of food to meet both domestic and export market demand.”
Congressional elections will occur in October this year, and rising beef prices are a sensitive political issue.
USCA requests emergency relief for livestock haulers following JBS shutdown... On Wednesday, the United States Cattlemen's Association (USCA) sent a letter to Secretary of Transportation Pete Buttigieg requesting immediate regulatory relief for transporters of live animals and fresh meat products following the impact of the cyberattack on global meat supplier JBS SA. In the letter, USCA requests the Federal Motor Carrier Safety Administration (FMCSA) provide emergency regulatory flexibility for motor carriers and drivers hauling both live animals and meat products: "After reviewing reports from our members regarding the impact of the JBS outage, USCA strongly believes this event warrants immediate regulatory action to ensure grocery store shelves stay stocked of fresh meat products. Further, agency action following the May 7, 2021, ransomware attack of Colonial Pipeline provides a precedent for the issuance of such an emergency declaration to ensure supply chain continuity of essential consumer goods."
Pork companies seek reversal of ruling preventing them from intervening in line-speed case… Seaboard Foods, Quality Pork Processors, Clemens Food Group and WholeStone Farms Cooperative have turned to the U.S. Court of Appeals for the Eighth Circuit in a bid to reverse a U.S. district court decision against them as they sought to intervene in the lawsuit over USDA line speed rules in U.S. pork slaughter plants. The companies sought to intervene in the 2019 lawsuit filed by the United Food and Commercial Workers Union against USDA over the line speed ruling as they sought to appeal a March ruling. U.S. District Judge Joan Ericksen on May 20 ruled that the firms were not timely in their request. They filed a joint notice of appeal with U.S. District Court for the District of Minnesota and sought to stay Erickson’s ruling pending the appeal.
CPTPP will open talks on admitting the U.K. while Washington stays away… The 11 members of the group, formally known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP, are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The U.K. applied to join the CPTPP on Feb. 1. The U.K.’s secretary of state for international trade, Elizabeth Truss, said membership was a “key part of our trade negotiations program as a newly independent trading nation.” Japanese officials have expressed hope that the U.S. would eventually rejoin the group or at least find some way to link up with the group.
