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ENSO-neutral conditions likely to persist through growing season... Atmospheric conditions remain ENSO-neutral and are likely to remain that way through the remainder of the U.S. growing season. The U.S. Climate Prediction Center (CPC) puts nearly 90% odds of neutral conditions lasting through August and 56% chances they will persist until October.
CPC said, “The IRI predictions indicate ENSO-neutral is most likely through the Northern Hemisphere winter 2025-26. In contrast, the North American Multi-Model Ensemble favors the onset of La Niña conditions during the Northern Hemisphere fall, though lasting a shorter duration than NOAA’s requirement of five consecutive overlapping 3-month seasons. While the subsurface equatorial Pacific remains above average, easterly trade winds are predicted to strengthen in the coming month, which could portend cooler conditions. In summary, ENSO-neutral is most likely through the late Northern Hemisphere summer 2025 (56% chance in August-October). Thereafter, chances of La Niña conditions increase into the fall and winter 2025-26, but remain nearly equal to ENSO-neutral.”
Spring wheat drought footprint spreads, other crop dryness area remains small... As of July 8, the Drought Monitor showed 48% of the U.S. was covered by abnormal dryness/drought, down one percentage point from the previous week. USDA estimated D1-D4 drought conditions covered 12% of corn area (unchanged), 9% of soybeans (up one point), 35% of spring wheat (up six points) and 3% of cotton production areas (unchanged).
Across major corn, soybean, spring wheat and cotton states, dryness/drought covered 37% of Iowa (no D3 or D4), 57% of Illinois (no D3 or D4), 32% of Indiana (no D3 or D4), 37% of Minnesota (no D3 or D4), 86% of Nebraska (no D3 or D4), 56% of South Dakota (no D3 or D4), 50% of North Dakota (no D3 or D4), 32% of Kansas (no D3 or D4), 55% of Colorado (7% D3, no D4), 75% of Montana (9% D3, no D4), 31% of Texas (10% D3 or D4), 2% of Ohio (no D3 or D4), 13% of Wisconsin (no D3 or D4) and 23% of Michigan (no D3 or D4). No measurable dryness/drought was reported for Kentucky, Tennessee or Arkansas.
Click here to view related maps.
Brazil to take proactive approach to Trump’s tariffs... Brazil’s Agriculture Minister Carlos Favaro said the country will look to expand markets and reduce trade barriers, after President Donald Trump announced a 50% tariff on imports from, effective Aug. 1, if Brazilian President Lula da Silva doesn’t halt a “witch hunt” trial against former president Jair Bolsonaro. Favaro said he would reach out to key markets in the Middle East, South Asia and the Global South as alternatives for exporting Brazilian ag goods. The U.S. is Brazil’s second-largest trading partner, trailing only China.
Russia orders ‘necessary measures’ to boost ag exports... The Russian government ordered “necessary measures” to boost ag exports after wheat sales to start 2025-26 fell to their lowest since 2008, without providing specific details. As we previously reported, Russia cut its wheat export tax to zero for July 9-15 — the first time the tax has been removed since it was introduced in 2021. It is unclear how long the zero-duty period will extend.
Reuters reported there was already a shortage of wheat at Black Sea grain terminals. It quoted a trader as saying, “Grain is arriving at the port two to three weeks later than exporters expected, due to delays in harvesting, lengthy procedures for obtaining declarations and low prices.”
Neiffer sizes up USDA’s SDRP Stage 1... USDA on Wednesday released the initial details for the new Supplemental Disaster Relief Program (SDRP) Stage 1, which is aimed at helping producers recover from recent losses. Paul Neiffer of the Farm CPA Report offers an early analysis and practical guidance as details emerge.
Neiffer notes that “signup will be very similar to the old 2020-21 ERP program,” with FSA preparing the applications and estimating the damages for each producer. Initial payments in this round are likely to be just 35% of the calculated damages, with any potential “top-up” to follow at a later date — mirroring the ERP approach.
He also highlights a lingering question around de minimis acres: “We don’t see any details on how FSA will calculate de minimis acres that could be excluded from the crop insurance requirement in order for you to still get a 90% payment instead of the 70% payment that was an issue with ERP.” The law indicates these acres could be excluded, but implementation specifics are still unclear.
According to Neiffer, “the calculation of the payment appears to be very straight-forward and is simply recalculating your crop insurance indemnity using the same old ERP factors.” But this time, fees and crop insurance premiums are deducted from the indemnity.
Example from the Federal Register illustrates the calculation: “Suppose a producer had a crop insurance policy with a coverage level of 65%, and the total administrative fee and premium was $3,500... The producer suffered a crop loss, and their production was valued at $250,000, resulting in a gross indemnity of $75,000... To calculate the producer’s Stage 1 payment, RMA will perform the same calculation... but using $437,500 (the SDRP factor of 87.5% multiplied by the expected value) in place of the liability... resulting in a calculated Stage 1 payment of $116,000 prior to application of the final payment factor described below and any other applicable reductions.” As Neiffer sums up: “They simply recalculate your original insurance indemnity payment and then reduce it for the fees and premiums you paid... you then only collect 35% of that net number.” Payment limitations remain as before:
- $125,000 for specialty/high-value crops
- $125,000 for non-specialty crops (corn, wheat, soybeans, etc.)
- If AGI exceeds 75% from farming, you may qualify for higher limits
Neiffer flags an important wrinkle regarding equipment gains: “Even though the One Big Beautiful Bill Act specifies that equipment gains is now considered farm income, USDA is asserting that you are still subject to the old 66.66% rule on equipment gains... At least, this is the current position of FSA.” That means, for 2023 and 2024 crops, some may not qualify as a “farmer” under these rules, though changes are expected for future years.
USDA to end consideration of race, sex in many farm programs... USDA no longer consider a farmer’s race or sex in many of its farm loan, commodity and conservation programs. The move was made to align with the Trump administration’s directives to dismantle diversity, equity and inclusion policies across the federal government and because it has adequately addressed past bias, the agency said in a final rule.
“Moving forward, USDA will no longer apply race- or sex-based criteria in its decision-making processes, ensuring that its programs are administered in a manner that upholds the principles of meritocracy, fairness, and equal opportunity for all participants,” said the rule, signed by acting General Counsel Ralph Linden.