California Finalizes Prop 12 Implementation Rules; NPPC & Farm Bureau File Petition Reply Brief to SCOTUS

Oil prices plunge to lowest level since January over global economic growth concerns

Oil prices fall to the lowest levels since January. On Wednesday, oil tumbled to the lowest since January as a dollar surge and global demand concerns weigh on prices despite the threat of disruption to Russian supplies. U.S. benchmark West Texas Intermediate sank below $82 while the global Brent benchmark fell below $88.

Dollar strength this year has dominated the performance of other currencies, with the yen, euro and British pound at multi-decade lows. And China has also acted, as detailed in the China section.

Federal Reserve Chairman Jerome Powell said this morning that the central bank is focused on strongly pushing back against rising prices in order to avoid the “very high social costs” that came about during the high inflation period of the 1970s. “History cautions strongly against prematurely loosening policy,” Powell said during a moderated discussion at the Cato Institute, a libertarian think tank in Washington. “I can assure you that my colleagues and I are strongly committed to this project, and we will keep at it until the job is done.” The event is Powell’s last scheduled public appearance before the Fed’s next policy meeting on Sept. 20-21.

Goldman Sachs now expects the Fed to hike by 75 basis points this month and 50 basis points in November, up from their previous forecasts of 50 basis points and 25 basis points respectively.

European markets lost early gains today after the European Central Bank announced a 75-basis point interest rate rise.

President Joe Biden will host a call with allies today about next steps in support of Ukraine against Russia’s invasion, according to people familiar with the matter. Biden will lead the video session late this morning Washington time with several participants, including Group of Seven leaders, as well as the leaders of NATO and the European Union. The talks come after the U.S. announced plans to provide $2 billion in foreign military financing to bolster defense capabilities in Ukraine and 18 neighboring countries, Secretary of State Antony Blinken announced.

Turkish President Tayyip Erdogan echoed statements by Russian President Vladimir Putin that Ukrainian grain appears to be going to rich western countries and not the neediest nations, saying that Putin was correct in his statements that the grain under the deal negotiated with Russia, Ukraine, the U.N. and Turkey was going to wealthy countries. More in Russia/Ukraine section.

A Senate panel approved President Biden’s agricultural trade pick, moving Doug McKalip closer to confirmation for a key position that’s been empty for over a year. The finance panel voted 27-0 to send McKalip’s nomination to the full chamber for a vote to be chief agricultural negotiator at the U.S. Trade Representative office.

Senate Agriculture Committee Ranking Member John Boozman (R-Ark.) wants an explanation from USDA on what happened that led to the weekly Export Sales reporting glitch that has seen USDA suspend its weekly report after the launch of a new reporting system was fraught with problems, prompting USDA to retract the report. More on this below.

The National Grain and Feed Association (NGFA) urged Congress to intervene, if necessary, to prevent any interruptions of rail service that could occur if negotiations fail between rail carriers and labor groups. Railroads and rail labor have until Sept. 16 to reach an agreement that would prevent a lockout or strike after the Presidential Emergency Board published a proposed settlement on Aug. 17. Details in Market section.

California’s Prop 12 implementation rules finally completed. More than three years after the statutory deadline, California finalized its Proposition 12 implementation rules. The National Pork Producers Council (NPPC) says, “Any farmers raising pigs that provide pork products to the California market must register and will be required to have California agents inspect their farms, which will create serious biosecurity threats.” The U.S. Supreme Court is scheduled on Oct. 11 to begin hearing opposition to Prop 12 brought by NPPC and the American Farm Bureau Federation. Details in Livestock section.

California’s Fast Act faces a referendum. Details in Food Industry section.

Doctors ‘concerned’ about Queen Elizabeth’s health. Buckingham Palace said the 96-year-old monarch was placed under medical supervision but remains at her home in Scotland.

Election Day 2022 is 61 days away. Election Day 2024 is 789 days away.

Equities today: Global stock markets were mostly firmer overnight, following the strong gains in the U.S. stock market on Wednesday. U.S. Dow opened around 160 points lower and is currently around 100 points lower. In Asia, Japan +2.3%. Hong Kong -1%. China -0.3%. India +1.1%. In Europe, at midday, London +0.2%. Paris +0.4%. Frankfurt -0.3%.

U.S. equities yesterday: The Dow gained 435.98 points, 1.40%, at 31,581.28. The Nasdaq rose 246.99 points, 2.14%, at 11,791.90. The S&P 500 added 71.68 points, 1.83%, at 3,979.87.

Agriculture markets yesterday:

• Corn: December futures fell 5 cents to $6.71, after earlier reaching $6.88, the highest intraday price since June 23.
• Soy complex: November soybeans fell 15 1/4 cents to $13.83 1/2, the contract’s lowest closing price since Aug. 16. October soymeal rose $4.40 to $415.00, while October soyoil fell122 points to 63.68 cents.
• Wheat: December SRW wheat rose 27 1/4 cents at $8.44 1/4, the contract’s highest closing price since July 11. December HRW wheat gained 19 1/2 cents to $9.01 1/2. December spring wheat rose 10 1/4 cents to $9.00.
• Cotton: December cotton fell 193 points to 101.62 cents, a four-week closing low.
• Cattle: October live cattle fell 80 cents to $144.25 after rising as high as $145.50 earlier in the session. October feeder futures tumbled $2.15 to $183.95.
• Hogs: October lean hogs fell 2.5 cents to $91.075, while deferred contracts ended firmer. The CME lean hog index fell $1.48 to $103.26, the lowest since May 23, and is expected to drop another $1.78 today.
  

Ag markets today: Grain and soybean futures traded both sides of unchanged overnight, with corn weaker while soybeans and wheat were firmer this morning. As of 7:30 a.m. ET, corn futures were trading 1 to 3 cents lower, soybeans were 4 to 5 cents higher, winter wheat futures were mostly 1 to 3 cents higher and spring wheat was 6 to 7 cents higher. Front-month crude oil futures were nearly 50 cents higher and the U.S. dollar index is around 400 points lower this morning.

Technical viewpoints from Jim Wyckoff:

On tap today:

• European Central Bank is expected to lift its benchmark interest rate to 0.75% from zero. (8:15 a.m. ET) UPDATE: The ECB hiked interest rates by a historic three-quarters of a percentage point and pledging “several” further increases, even as the outlook for economic growth darkens. The ECB raised its outlook for inflation this year and next, while slashing its forecast for economic expansion in 2023. The 0.9% projection for growth next year is still more optimistic than the 0.7% median of predictions collected by Bloomberg. Bloomberg Economics sees an advance of only 0.4%. The ECB also suspended its two-tier system for remunerating excess reserves.
• U.S. jobless claims are expected to rise to 235,000 in the week ended Sept. 3 from 232,000 one week earlier. (8:30 a.m. ET)
• Federal Reserve Chairman Jerome Powell speaks at a Cato Institute conference at 9:10 a.m. ET.
• Additional Fed speakers: Chicago’s Charles Evans on the economy and monetary policy at 12 p.m. ET, and Minneapolis’s Neel Kashkari on the labor market at 2:15 p.m. ET.
• Treasury Secretary Janet Yellen remarks on the economy at 2 p.m. ET.
• Fed releases its consumer credit report for July at 3 p.m. ET.
• China’s consumer price index for August is expected to increase 2.8% from one year earlier, and its producer-price index is forecast to rise 3% from one year earlier. (9:30 p.m. ET)

Fed’s vice chair signals more rate increases ahead as inflation remains too hot. Federal Reserve Vice Chair Lael Brainard says the central bank will need to see “several months” of low monthly inflation data to be convinced that rapid price growth is finally cooling, raising the odds that Fed leaders will again raise interest rates by three-quarters of a percentage point when they meet later this month. “We are in this for as long as it takes to get inflation down,” Brainard said, in remarks to an annual conference of The Clearing House and Bank Policy Institute. Brainard also suggested that corporate decision-making was partly to blame for rising prices. She said that high profit margins in some industries, including retailers and car dealers, suggest companies could be using market power to raise prices — and that reducing those markups “could make an important contribution to reduced inflation pressures in consumer goods.” She warned that it would take time for the Fed’s efforts to work their way through the economy to reduce consumer demand and bring down inflation, which could eventually raise the risk of the Fed going too far. But, she said, “if history is any guide, it is important to avoid the risk of pulling back too soon.”

Federal Reserve gave its summary on current economic conditions, known as the Beige Book. The report showed that economic activity was little changed in many regions across the U.S., and that growth outlooks remain weak.

The number of references to the word “shortage” in the Federal Reserve’s latest Beige Book report edged higher after declining for three straight reports, according to a Bloomberg tally.

Goldman Sachs raised its forecast for Federal Reserve interest rate hikes late Wednesday. It now sees a 75-basis point hike later this month, citing several hawkish comments from Fed officials in recent weeks. The bank’s analysts also lifted their expectations for November’s meeting, forecasting a 50-basis point hike. The U.S. lender had previously expected a 50-basis point hike in September followed by a 25 basis point rise in November. Goldman stuck to its forecast for a 25-basis point hike in December, seeing the fed-funds rate at 3.75% to 4% by the year end.

Bottom line: The Fed will meet on Sept. 20-21 to determine the immediate future path of interest rates. The market is becoming increasingly confident that the central bank will hike by 75 basis points. CME Fed funds futures are at 82% for 75-basis-point rise at the September FOMC.

U.S. trade deficit falls sharply in July. The Commerce Department reported the trade deficit fell 12.6% from $80.5 billion in June to $70.65 billion in July. Economists had expected the deficit to fall to $70.5 billion. Exports were up 0.2% to $259.29 billion, while imports fell 2.9% to $329.94 billion. From an accounting perspective, Wednesday’s numbers bode well for U.S. economic growth in the third quarter, as trade deficits subtract from gross domestic product. But the figures also suggest cooling U.S. demand, a potential headwind for global economic growth.

U.S. ag trade deficit shrinks a little in July. The U.S. exported $14.9 billion of ag goods in July against imports of $15.8 billion for a trade deficit of $938.3 million. That was down slightly from a trade deficit of nearly $1.1 billion in June. Through the first 10 months of fiscal year 2022, ag exports total $167.3 billion against imports of $161.21 billion for a surplus of $6.16 billion. USDA forecasts fiscal year 2022 ag exports at $196.0 billion and imports at $192.0 billion, which would result in a trade surplus of $4.0 billion.

Economic output in Japan rebounded to pre-pandemic levels in the second quarter of 2022. GDP expanded by 3.5% year-on-year, a faster rate than had been estimated. Growth was helped by the easing of covid-19 restrictions, which had suppressed consumer and business spending. However, rising inflation and a sliding yen could still drag down growth in the current quarter.

Boozman calls for USDA to refocus its responsibilities amid export sales fiasco. U.S. Senator John Boozman (R-AR), ranking member of the Senate Ag Committee, is calling USDA to focus on day-to-day functions, not the Biden administration’s political goals, after the hastily executed rollout of a new export sales data reporting system failed.

In a letter sent to USDA Secretary Tom Vilsack, Boozman said the misstep raises concerns USDA senior officials are more focused on implementing the Biden administration’s political agenda than conducting the vital day-to-day responsibilities that stakeholders depend on.

“From a stakeholder perspective, this misstep suggests USDA’s senior leadership is not attune to the department’s important, day-to-day functions. I strongly encourage you to ensure that senior USDA leadership does not put the administration’s political agenda ahead of the department’s fundamental mission, which is to provide stability to U.S. agriculture and its stakeholders,” Boozman wrote.

Boozman noted this unforced error was costly and avoidable. “While I appreciate the need to modernize outdated systems, the decision was made to launch a new reporting system before properly training reporting entities and proper testing for technical glitches. As a result of what some suggest was a hurried decision to launch, U.S. and world traders are now limited in price discovery for many commodities for a duration of three weeks, notably at the beginning of the marketing year for corn and soybeans. I am concerned about how this will impact global food price volatility in a time of high inflation and food supply challenges with Russia’s invasion of Ukraine and worsening crop conditions in the U.S. and abroad,” Boozman wrote.

Boozman requested a detailed plan for the outreach, education and training of reporting entities and other key stakeholders as well as a timeframe for the future roll out of the new system.

Market perspectives:

• Outside markets: The U.S. dollar index is lower on a corrective pullback after hitting a 20-year high Wednesday. As of this week, the dollar is up 13% against the euro, 15% against the British pound, and 20% against Japan’s yen, according to Bloomberg data. The yield on the 10-year U.S. Treasury note is fetching 3.25%. Crude is higher bit off overnight highs, with U.S. crude around $82.20 per barrel and Brent around $88.20 per barrel. Gold and silver futures are higher, with gold around $1,737 per troy ounce and silver around $18.58 per troy ounce.

• Rail unions, carriers race deadline. Several rail unions and carriers will be meeting with the National Mediation Board this week to discuss recommendations issued by a Presidential Emergency Board last month to resolve a contract dispute. Labor Secretary Marty Walsh attended a meeting with both sides Wednesday, as seven of the 12 unions have not reached a tentative agreement based on the recommendations. Rail unions and carriers will have until Sept. 16 to accept or reject the plan from the emergency board.

Meanwhile, the National Grain and Feed Association (NGFA) urged Congress to intervene, if necessary, to prevent any interruptions of rail service that could occur if negotiations fail between rail carriers and labor groups. In a Sept. 8 letter to leaders of the Senate Committee on Commerce, Science and Transportation and the House Transportation and Infrastructure Committee, NGFA and 30 other members of the Agricultural Transportation Working Group asked Congress to prevent a rail stoppage “of any duration,” noting that uninterrupted rail service is vital to the American agricultural economy. “A complete stoppage of the rail system would lead to shutdowns or slowdowns of rail-dependent facilities resulting in devastating consequences to our national and global food security,” the groups noted.

• Ag trade: Taiwan purchased 55,375 MT of U.S. milling wheat.

• South Africa, the world’s largest exporter of citrus fruit after Spain, will voluntarily stop exporting Valencia oranges to the European Union from areas affected by Citrus Black Spot starting Sept. 16.

• La Niña could extend into January. The latest ENSO forecast model runs by the U.S. National Oceanic and Atmospheric Administration (NOAA) recently have suggested that La Niña may last longer than previously suggested. The model runs had previously suggested La Nina would weaken greatly in December and dissipate in January, but now the model has delayed that decay another month.

World Weather Inc. says: “The significance of this new forecast is huge for several areas in the world, but first on the list is South America. The longer La Niña lingers the higher the potential will be for another less-than-ideal South America growing season and the higher the potential will be for too much rain to fall in eastern Australia. India will likely have another wet winter and dryness may be an issue again in the central United States during the spring of 2023 if La Niña lasts too long.”

But World Weather also notes: “If La Niña dissipates in the middle of winter some of the U.S. weather concerns should diminish or dissipate and that is a real possibility in 2023.”

• In California, the operator that manages most of the state’s power grid issued an alert today calling on residents to set thermostats to 78 degrees or higher, avoid using major appliances and turn off all unnecessary lights in the evening. In neighboring Nevada, residents have also been urged to reduce electricity usage due to a significant reduction in the available energy supply.

• NWS weather: Hazardous weather associated with Hurricane Kay to begin entering southern California and parts of the Desert Southwest on Friday... ...Dangerous heat continues throughout central and northern California through the end of the week, with well above average temperatures building into the Pacific Northwest by the weekend... ...Critical Fire Weather conditions forecast throughout portions of the Intermountain West and Central Plains... ...Unsettled weather and flash flood chances forecast over parts of the Southeast and eastern Gulf Coast.

Items in Pro Farmer’s First Thing Today include:

• Quiet, two-sided trade overnight
• Turkey’s president sides with Putin on grain exports
• China pork imports expected to decline in 2023 (details in China section)
• Slow developing cash cattle market
• Futures/cash spread narrows in hog market but attitudes still pessimistic

— Summary: Turkish President Tayyip Erdogan echoed statements by Russian President Vladimir Putin that Ukrainian grain appears to be going to rich western countries and not the neediest nations, saying that Putin was correct in his statements that the grain under the deal negotiated with Russia, Ukraine, the U.N. and Turkey was going to wealthy countries.

• Putin: ‘We’ve gained, not lost, from sanctions over Ukraine.’ Russian President Vladimir Putin claimed on Wednesday that Russia had not lost anything because of its war in Ukraine. He threatened to cut off energy supplies if price caps are imposed on Russia’s oil and gas exports, warning the West it would be “frozen” like a wolf’s tail in a famous Russian fairy tale (Russian folk story The Sister-Fox and the Wolf).

  He also called into question the U.N.-brokered deal that allows Ukraine to export its grain via the Black Sea. “If we exclude Turkey as an intermediary country, then almost all the grain exported from Ukraine is sent not to the poorest developing countries, but to European Union countries,” he said. “Once again, developing countries have simply been deceived and continue to be deceived. It is obvious that with this approach, the scale of food problems in the world will only increase ... which can lead to an unprecedented humanitarian catastrophe.” His comments raised the possibility the pact could unravel if it cannot be successfully renegotiated or might not be renewed by Moscow when it expires in late November.

  Speaking at an economic forum in the far eastern Russian city of Vladivostok, Putin said that all of Russia’s actions were designed to strengthen the country’s sovereignty and were aimed at “helping people” living in the Donbas region of eastern Ukraine. “We have not lost anything and will not lose anything,” Putin said. “In terms of what we have gained, I can say that the main gain has been the strengthening of our sovereignty.”

  He did not mention NATO’s build-up of forces in eastern Europe or its planned admission of Finland and Sweden as members, thwarting his stated aim of preventing the Western alliance’s expansion. He conceded, however, that Moscow’s decision to send troops into Ukraine had created a “certain polarization, both in the world and within the country.”

  He accused Western countries of “undermining the key pillars of the world economic system built over centuries.”

  Russia’s economy would contract by “around 2% or a little more” this year and the budget would be in surplus, he said. But a U.S. study in July said sanctions were “catastrophically crippling” the Russian economy, but the country itself has produced figures to suggest it is holding up. Russia has reaped high revenues from its energy exports amid soaring prices — but would lose much of this should supplies to Europe continue to be cut.
  

• Russia is set to restrict retail investors from buying securities from “unfriendly” countries that have imposed sanctions. The Bank of Russia said more than 5 million investors had their holdings in foreign securities frozen, thanks to moves by the West. In October, brokerages will begin restricting access.
• France will restart a shuttered pipeline to send natural gas to an energy-strapped Germany. It can deliver about 2% of Germany’s gas needs over the colder months, according to Reuters, which should bring at least some respite for Europe’s largest economy as Russia continues to squeeze energy supplies.

— CBO cuts IRA deficit reduction. The Inflation Reduction Act (IRA) is now projected to lower the U.S. budget deficit by $238.5 billion over the next decade, according to updated estimates from the Congressional Budget Office (CBO). That is less than the $300 billion noted by Democrats as they passed the package last month. CBO cited changes to provisions in the law to lower prescription drug costs and they also lowered the amount of revenue they expect to be generated by additional hiring at the IRS. CBO said the IRS provisions would generate $180 billion in new revenue over 10 years, down from $204 billion initially. Changes to tax provisions at the request of Sen. Krysten Sinema (D-Ariz.) also tempered the deficit reduction score.

— A Senate committee approved President Biden’s agricultural trade nominee, moving Doug McKalip closer to confirmation for a key post that’s been empty for over a year. The Finance panel voted 27-0 in a bipartisan manner to report McKalip favorably to the full chamber for a vote to be chief agricultural negotiator at the U.S. Trade Representative’s office. Senators have urged the Biden administration to focus more on agricultural trade amid global disruptions such as the Russian invasion of Ukraine and its impact on food supply and fertilizer prices

McKalip, a USDA trade adviser, has promised to make up for lost time with trade agreements to improve American farmers’ market access in countries with high trade barriers. “He has fans on both sides of the aisle, and we expect to work closely with him once confirmed,” Sen. Ron Wyden (D-Ore.), the chair of the finance committee, said.

— John Z. Lee easily won bipartisan confirmation as the first Asian-American judge on the U.S. Court of Appeals for the Seventh Circuit as Senate Democrats begin a pre-election push to advance judicial picks. Lee, who was confirmed 50-44 to the Chicago-based court that deals with appeals from Illinois, Indiana, and Wisconsin, moves up from the federal trial bench where he was appointed by former President Barack Obama.

— The U.S. dollar’s strength has prompted particularly aggressive moves from China. It’s up 8% against the yuan in 2022. The dollar’s relentless advance has sent China’s foreign exchange reserves to the lowest point since 2018, Chinese government data revealed this week, as the value of its other assets declines. Meanwhile, the People’s Bank of China has moved to shield its currency from further declines as it nears the psychological threshold of 7 per dollar. Beijing has imposed a stronger-than-expected reference rate for the yuan for the 12th day in a row.

Depreciation pressure on the yuan may constrain China’s ability to expand monetary policy in the second half of the year to shore up slowing economic growth, economists say. Link for more via the South China Morning Post.

— China, Israel free-trade deal, Beijing’s first in Middle East, in ‘last stages.’ After discussions dating back to 2016, a breakthrough trade deal between China and Israel is “in its last stages,” Israeli officials noted.

— Taiwan’s Tsai Ing-wen tells U.S. lawmakers she’s ‘confident’ about trade agreement. Taiwanese president thanks congressional delegation for ‘rock-solid support’ and says negotiations under new trade pact framework will begin soon.

— China pork imports expected to decline in 2023. USDA’s attaché in China expects the country’s pork production to increase 1 MMT to 53 MMT, which would remain below pre-African swine fever levels but be in line with consumer demand. The attaché forecasts pork imports will decline 8% from this year to 1.85 MMT “as domestic production and prices stabilize. Additionally, imports are expected to be constrained as global pork prices are less competitive compared to domestic prices.” The post expects China’s beef production to rise 300,000 MT to 7.4 MMT. Beef imports are forecast to decline to 2.5 MMT amid “high global beef prices, lower domestic prices and a weaker economy impacting consumers purchasing decisions of high-value products such as imported beef.”

— IPEF start. The U.S. is set to host the first gathering of Asian nations on an economic agreement envisioned by the White House as a counter to China’s rising influence in the region. Thirteen countries are expected to send representatives to the two-day kickoff event starting today in Los Angeles for the Indo-Pacific Economic Framework for Prosperity, or IPEF, which covers about 40% of global gross domestic product. It includes Japan, India, South Korea, Australia and Indonesia, all members of the Group of 20 largest economies.

The U.S. will seek to focus on non-tariff issues that can still deliver market access for American exporters, a Biden administration official said Wednesday, without providing specifics beyond the four so-called pillars of the framework — trade; supply chains; clean energy, decarbonization and infrastructure; and taxes and anti-corruption. Among those, a potential point of progress could be efforts to combat climate change, particularly after Biden and his Democratic allies in Congress recently secured $375 billion for green energy development.

— U.S./South Korea talks on EVs. South Korea Trade Minister Ahn Duk-geun will hold weekly talks with U.S. Trade Representative Katherine Tai on ways to minimize damage from the Inflation Reduction Act on South Korean carmakers, Yonhap reports, citing comments from Ahn. “The U.S. government fully understands the seriousness of this issue, and so we plan to continue our consultations on how it can actually be resolved with practical measures,” Ahn said following a meeting with Tai.

— New British PM Liz Truss announces cap on energy bills to combat cost-of-living crisis. The price cap in the U.K., set by the regulator Ofgem, essentially limits the amount a supplier can charge for their tariffs. Truss announced the typical household “will pay no more than £2,500 ($2,880) per year for each of the next two years,” which the prime minister said will give the average household “a £1,000 saving per year.” The cap will be in place from Oct. 1. There will be an equivalent guarantee for businesses for the next six months. There will then be further support for vulnerable sectors such as hospitality, the prime minister said.

— NPPC issues statement on SCOTUS reply brief to petitioners on California Proposition 12. The following statement was released Wednesday by Terry Wolters, National Pork Producers Council (NPPC) president:

“Today’s (Wed., Sept. 7) filing of our reply brief to petitioners brings the National Pork Producers Council and the American Farm Bureau Federation one step closer to the Supreme Court hearing our case on how California Proposition 12 violates the U. S. Constitution.

“Ironically, California’s Department of Food and Agriculture also announced today it finally completed the Proposition 12 implementation rules, more than three years after the original statutory deadline. This delay unnecessarily exacerbated pork supply chain disruptions and now creates significant concerns for farmers that these arbitrary regulations put the nation’s pig herd at risk of disease. Any farmers raising pigs that provide pork products to the California market must register and will be required to have California agents inspect their farms, which will create serious biosecurity threats across the country.

“We look forward to presenting our case before the Supreme Court on Oct. 11 to defend the livelihoods of America’s pork producers.”

Background: California voters in 2018 passed Proposition 12, which prohibited the sale of pork products in the state unless pork producers house their livestock according to certain space requirements and directed state agencies to issue implementing regulations. Plaintiffs in the case claim that California voters, who consume 13% of the nation’s pork but raise roughly 0.13% of the nation’s breeding herd, effectively forced out-of-state farmers to follow California’s agriculture regulations rather than the regulations in their own states. Such state action, according to plaintiffs, violates federalism principles and the dormant Commerce Clause — a legal doctrine derived from the Constitution’s Commerce Clause that bars states from passing legislation that ostensibly regulates interstate commerce. NPPC and the American Farm Bureau Federation (AFBF) petitioned the Supreme Court in September 2021. The California Grocers Association also opposes Proposition 12, citing that “the pork industry is ill prepared for the high requirements imposed by Prop 12.”

Link to NPPC and AFBF’s SCOTUS reply brief to petitioners.

— California’s Fast Act faces referendum. Soon after California Democratic Gov. Gavin Newsom signed landmark legislation regulating fast food labor, a group led by the International Franchise Association and the National Restaurant Association filed a referendum seeking to overturn the law. Qualifying a referendum suspends the law in question until voters can weigh in. That would mean delaying minimum wage increases that can hit $22 an hour by the end of next year, should the law take effect as planned.

— Summary:

• Global Covid-19 cases at 606,949,037 with 6,508,102 deaths.
• U.S. case count is at 95,020,855 with 1,048,989 deaths.
• Johns Hopkins University Coronavirus Resource Center says there have been 610,012,616 doses administered, 224,113,439 have been fully vaccinated, or 68.02% of the U.S. population.

— Pennsylvania Democratic Senate candidate John Fetterman said on Wednesday he would debate his Republican opponent, Mehmet Oz — without saying when or where — and that he would seek an accommodation for speech and hearing difficulties he continues to experience after suffering a stroke in May. But the statement was unlikely to end weeks of cajoling from Oz, who’s made increasingly pointed attacks on Fetterman’s fitness.

— Sabato’s Crystal Ball: Forecasting the House and Senate. The group’s latest report has something for both Democrats and Republicans. Link for details.

— WRDA talks progressing. Negotiations on the bipartisan 2022 Water Resources Development Act (WRDA) legislation (Senate amendment to HR 7776) have been going well and will continue this month, according to congressional aides. Staffers for the Senate Environment and Public Works Committee met during the August recess to discuss next steps. The House and Senate need to hold a conference committee this fall to settle some differences between the chambers’ versions. Congress needs to pass a final bill before the end of the year. The biennial legislation authorizes waterway improvements and spending for flood control and coastal resilience across the country.

— Rail service & ag hearing Sept. 15. Two House Transportation and Infrastructure subcommittees — Railroads, Pipelines, and Hazardous Materials; and Livestock and Foreign Agriculture — will hold a joint hearing on Thursday, Sept. 15 examining the impact of rail service challenges on agricultural shippers.

— Queen Elizabeth II is under medical supervision at her Balmoral residence in Scotland, after her doctors said they were concerned about her health, according to an official statement on Thursday. Buckingham Palace said the Queen “remains comfortable” and is staying at Balmoral. Prince Charles and his wife Camilla, Duchess of Wales, are traveling to Balmoral along with Charles’ eldest son Prince William, according to a statement from their residence.

— USDA clears genetically engineered purple tomato. USDA’s Animal and Plant Health Inspection Service said Wednesday that it had approved the sale of a genetically engineered tomato altered to change its color and enhance its nutritional quality. The purple tomato was developed to have high levels of anthocyanins, which are linked with health benefits.

WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | California phase-out of gas-powered vehicles | RFS | IRA: Biofuels | IRA: Ag | Student loan forgiveness | Russia/Ukraine war, lessons learned | Election predictions: Split Ticket |