Evening Report | October 14, 2021
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Drought improvement for Northern Plains and Upper Midwest… Above-normal temperatures persisted for the Northern Plains and Midwest the week ended Oct. 12. But a strong surface low pressure system brought heavy rain to the Dakotas and northern Minnesota, resulting in broad one-category improvements in drought, according to today’s U.S. Drought Monitor. After the storm system had passed, a surface low-pressure system developed in the Rockies and over the Southern Plains, bringing several inches of rain and further improving drought conditions that had intensified quickly during September. The low-pressure system brought heavy rain to the western Corn Belt later in the reporting period, resulting in further drought improvement. Areas that missed out on the rains in the Great Plains saw drought conditions worsen amid the unseasonable warm temperatures and high winds.
Today’s Drought Monitor shows 39.6% of the Midwest is impacted by abnormal dryness or drought, which was a three-point improvement from the week prior. Minnesota and Iowa remain the driest.
On the High Plains, drought improvement in the Dakotas was basically offset by drought worsening in areas farther to the south, especially in eastern areas of Colorado. Today’s update shows 84.5% of the High Plains is impacted by abnormal dryness or drought, basically steady with the week prior. The top winter wheat producing state of Kansas is in relatively good shape, with just 14.6% drought coverage.
Drought also expanded notably in Texas over the past week, with elevated temperatures and high winds speeding along evaporation. Today’s update shows 53.3% of the Lone Star state is impacted by abnormal dryness or drought, an 8.3-point jump from the week prior.
Oklahoma saw several inches of rain that helped improve conditions across central areas. But drought worsened in areas that missed the rains. Dryness/drought coverage climbed roughly 3 percentage points to 95.6%, but the amount classified as drought eased 7.2 percentage points. Find related maps here.
CPC issues La Nina advisory… The Climate Prediction Center (CPC) says La Nina conditions have developed and are expected to continue into the winter. There are 87% odds La Nina conditions will continue in December 2021 through February 2022 and 77% odds it will continue in the January through March of 2022 period. The system characterized by cool sea surface temperatures could lead to dryness issues for some areas of South America, but at present, concerns are limited.
By spring, odds slightly favor a shift to ENSO-neutral conditions, where neither La Nina nor El Nino conditions are present.
China takes more steps to limit fertilizer exports… China’s customs office on Wednesday announced it would require inspection certificates to ship fertilizer and related materials, a move that is generally viewed as a de facto ban on exports of fertilizer. Urea futures on the Zhengzhou Commodity Exchange have fallen 10% since the announcement. A surge in coal prices and concerns about power shortages and crackdowns on energy use had shot urea futures prices more than 70% higher this year. China is the world’s largest phosphate exporter.
China’s customs office also released a statement yesterday announcing a list of 29 fertilizer products and items used to make fertilizer that now require an inspection and quarantine report or certificate before they can be shipped out. Those measures take effect Oct. 15.
EU is considering proposals to alleviate energy crises like the one it now faces... It also endorsed short-term measures being taken or planned by around 20 of the bloc’s 27 members, including emergency income support to help cover energy needs, tax cuts and working with international partners on gas supplies to ease price pressures. The EU also said it would look at voluntarily buying gas jointly to build up reserves, which currently cover around 20% of the bloc’s annual demand. EU leaders are set to discuss the proposals at a meeting next week.
Russia’s rising leverage in global energy markets… Natural gas shortages that drove prices to records in Europe have exposed Russia’s rising leverage over global energy markets, with Moscow now playing a key role in everything from OPEC negotiations to coal exports to China, the Wall Street Journal reports. Russia, the world’s largest exporter of natural gas and the source of more than a third of Europe’s gas, has emerged as a critical supplier with the power to quickly alleviate the continent’s deficit.
White House looking to address rising fuel, natural gas shortages… The White House is discussing options to address fuel and natural gas shortages that have driven prices higher, White House Press Secretary Jen Psaki said Wednesday.” Psaki said, “The president has asked his economic team, as they do on any range of issues impacting the public, to continue to discuss what the options are that we can take to address these shortages.”
White House again blames big packers for some food inflation… Food prices rose 4.6% in September, and it didn’t take long for the White House to blame consolidation in the meat industry. Supermarket prices rose 1.2% last month and grocery prices are now up 4.5% over the past 12 months. Beef prices rose 4.8% and are up nearly 18% for the past 12 months. Psaki singled out meatpackers for blame when it comes to rising food prices. The price of meat is “an issue that has been impacting them (consumers) nearly every single day,” Psaki said. She said rising meat prices are due in part “to competition, and the small number of large meat producers who have a dominance over the market.”
USDA’s Vilsack to meet with Mexican counterpart next week in Iowa... USDA Secretary Tom Vilsack will host meetings with Mexico’s Secretary of Agriculture and Rural Development Víctor Manuel Villalobos Arámbula Oct. 20-21 in Des Moines, Iowa. Vilsack will be there to participate in the World Food Prize Laureate Award ceremony. While no agenda was signaled by USDA in announcing the meetings, the topic of the presidential decree in Mexico for the country to halt imports of GMO corn, a situation which our sources have noted is steeped in uncertainty as the decree lacks specificity as the key question that remains unanswered is whether the decree applies to corn imported for food use or corn imported for feed use, the latter of which would have a significant impact on U.S. corn exports to Mexico. Vilsack has insisted he has been assured there will not be an impact on U.S. corn exported to Mexico for feed use, but that is not clear yet, according to our sources. The recent Mexican rejection of an approval of a GMO corn variety will probably be a discussion point.
Pelosi: Democrats face ‘difficult decisions’ to trim $3.5 trillion spending plan… As the latest Oct. 31 “deadline” for passage approaches, House Speaker Nancy Pelosi (D-Calif.) is warning that difficult decisions must be made to pare down Biden’s “expansive plans for reimagining the nation’s social service programs and tackling climate change.” Democrats’ efforts to reduce the $3.5-trillion package to about $2 trillion, are raising tough questions that Biden and his party are rushing to answer by the self-imposed deadline.
Progressive Democrats are warning colleagues against a “false choice” over what to keep or cut as Democrats scale back. In a letter to Pelosi and Senate Majority Leader Chuck Schumer (D-N.Y.) on Wednesday, the leaders of the Congressional Progressive Caucus argue the package should not simply be narrowed as centrist lawmakers prefer, but instead kept as Biden’s bigger vision but for fewer than 10 years. The progressives wrote, “Much has been made in recent weeks about the compromises necessary to enact this transformative agenda. ... We have been told that we can either adequately fund a small number of investments or legislate broadly, but only make a shallow, short-term impact. We would argue that this is a false choice.”
