The Week Ahead: Nov. 24, 2024
— FDA advances front-of-package nutrition labeling proposal. The Food and Drug Administration (FDA) has sent a proposed rule for front-of-package (FOP) nutrition labeling to the White House’s Office of Management and Budget (OMB), marking a key milestone in President Biden’s National Strategy on Hunger, Nutrition, and Health. The initiative aims to enhance consumer awareness and combat diet-related diseases by providing clear, at-a-glance nutrition information on food packaging. Highlights: The proposal, now under OMB review, will soon open for public input, reflecting the administration’s commitment to implementing this policy before the end of President Biden’s term. — Rand Paul to lead Covid-19 origins investigation, eyeing NIH reforms. Sen. Rand Paul (R-Ky.), the incoming chair of the Senate Homeland Security Committee, plans to investigate the origins of Covid-19, with a focus on U.S. funding of research in Wuhan, China. Paul has been a vocal critic of the National Institutes of Health (NIH) and Dr. Anthony Fauci, alleging misinformation about U.S. involvement in pathogen-altering research through grants to EcoHealth Alliance. Paul’s new role grants him unilateral subpoena power, allowing him to independently compel the release of documents or testimonies, a power he says he intends to use in pursuing his investigation. The inquiry could bolster Republican-led efforts to reorganize the NIH, an initiative gaining momentum among lawmakers. Proposals range from restructuring the agency to refocusing research priorities, with figures like Robert F. Kennedy Jr. advocating for major personnel changes and a shift toward chronic disease research. Additionally, Paul aims to expose financial conflicts among government scientists, particularly concerning royalties from vaccines and other products they helped develop. He argues for greater transparency in the influence of pharmaceutical companies on government policies. — Canada’s strategy for U.S. trade negotiations: potentially excluding Mexico. Canadian Prime Minister Justin Trudeau has indicated a willingness to negotiate a trade agreement directly with the incoming Trump administration, potentially sidelining Mexico, the Wall Street Journal reports (link). As preparations intensify for the upcoming review of the U.S.-Mexico-Canada Agreement (USMCA) scheduled for next year, Trudeau and other Canadian officials have expressed concerns about Mexico’s role as a conduit for Chinese goods into North America, which could undermine trade interests in both Canada and the U.S. Trudeau mentioned these issues in discussions with Mexican President Claudia Sheinbaum during the G-0 summit in Brazil. Trudeau stated, “There have been real and genuine concerns raised about Chinese investment into Mexico,” emphasizing that while collaboration is preferable, Canada may need to explore alternative options if Mexico does not address these concerns. Sheinbaum has downplayed Trudeau’s remarks, labeling them as political posturing ahead of Canada’s elections next year, where Trudeau’s approval ratings have recently declined. Mexican trade officials argue that there is no substantial evidence supporting claims that China is using Mexico as a loophole to export goods tariff-free to the U.S. and Canada. Mexico responds. Luis Rosendo Gutiérrez, Mexico’s deputy trade minister, highlighted that Chinese foreign direct investment is significantly more substantial in the U.S. and Canada compared to Mexico, countering fears of a backdoor trade route. Trudeau’s government appears to be aligning itself with Trump’s critical stance on Chinese investments in Mexico, aiming to strengthen ties with the new administration despite past tensions. The dynamics of this relationship are crucial, especially since Canada and Mexico rely heavily on the U.S. market for their exports. The potential shift in Canada’s approach raises concerns among critics who warn that isolating Mexico could backfire, recalling past negotiations where cooperation among all three countries proved essential. As negotiations for the USMCA review approach, Mexican officials are advocating for a framework that addresses Chinese imports within North America. Trudeau’s administration has already taken steps to align its policies with those of the U.S., including implementing tariffs on Chinese-made products. The auto industry remains a focal point in these discussions, given its intricate supply chain across the three nations. |
WASHINGTON FOCUS |
Both chambers of Congress are currently on holiday recess. The Senate returns the afternoon of Monday, Dec. 2, and the House returns Dec. 3.
— When Congress returns in early December, several significant events and legislative priorities are anticipated. They include:
• Continuing Resolution (CR): Congress has enacted a Continuing Resolution to maintain government funding through Dec. 20, 2024. This CR allows for essential services to continue while Congress negotiates longer-term appropriations for fiscal year (FY) 2025. The upcoming session will likely focus on whether to pass an omnibus spending package or another CR to extend funding further into the new year. House Speaker Mike Johnson (R-La.) wants a CR through March 2025.
• Appropriations bills: Congress must address the twelve appropriations bills necessary for funding federal discretionary programs, which make up about one-third of the federal budget. Only five of these bills have passed the House, and none have yet cleared the Senate. The outcome of these negotiations will be crucial in determining federal spending priorities moving forward. But like the farm bill, appropriators again could not find consensus on clearly separate measures even though they had a long time to do so. They will kick the can into 2025.
• Another 2018 Farm Bill extension. With several farm programs set to expire, Congress will again need to consider extending these programs beyond their current deadlines. A previous attempt to pass a comprehensive five-year farm bill failed, largely because of the slow-walk approach of retiring Senate Ag Chairwoman Debbie Stabenow (D-Mich.), necessitating further action in the next session of Congress.
• Disaster aid: Not if but how much lawmakers will eventually approve. At least $24 billion ($21 billion in direct payments) to the ag sector is expected, with farm-state lawmakers likely including language telling USDA how to implement the program to avoid the very unpopular approach it took in the most recent disaster payouts.
• Financial aid to ag sector? Some farm-state lawmakers want to attach language to any must-pass bill that would increase current reference prices and boost some crop insurance incentives. If they are successful, this would increase farm bill baseline scoring when the new Congress gets ready to try another attempt at finalizing a new farm bill in 2025. This is why this approach is called a stealth farm bill.
• Judicial nominations: The Senate is expected to continue its work on judicial nominations, including various district and circuit court judges. These appointments are critical for filling vacancies in the federal judiciary and will likely be a priority as the session progresses.
• China-related legislation: The House is anticipated to debate several bills aimed at addressing issues related to China, including economic security and technology transfer. This includes legislation that may require Senate approval for international treaties related to pandemic preparedness.
• Counter-drone program: The authorization for counter-drone programs is set to expire, and Congress will need to act on this issue as well, particularly in light of ongoing security concerns.
— The pick to lead USDA was a tilt-a-whirl. First it was the list of around 15 potential candidates to lead USDA — none of which made it. Then there were some late possibilities. Those did not make the final announcement, either. Then on Friday, CNN broke the “news” that President-elect Donald Trump was going to offer the job to former Sen. Kelly Loeffler (R-Ga.). On Friday evening Trump announced a slew of appointments (link), but not Loeffler. That left most Washingtonians thinking she was not going to get USDA’s top post. They were correct. The Wall Street Journal on Saturday was the first to report the slot would likely be given to Brooke Rollins, president of the America First Policy Institute (link for background). Trump later on Saturday officially offered and announced Rollins as his USDA choice.
Trump’s eventual choice stems from a combination of Rollins’ close ties to Trump, her background in policy, and her leadership role in a think tank aligned with his administration’s priorities. Rollins has developed a strong rapport with Trump over the years, characterized by loyalty and mutual respect. Trump has previously praised her contributions to his first administration, which likely influenced his decision to nominate her for this significant role. Her previous experience includes serving as an aide to former Texas Governor Rick Perry and leading the Texas Public Policy Foundation, further solidifying her credentials in policymaking.
Rollins will have clout. An ally of Jared Kushner, Trump’s son-in-law, Rollins was once considered a contender to be White House chief of staff. Susie Wiles, who helped run Trump’s campaign, was chosen for that role.
Trump’s selection of Rollins appears to be strategic, aiming to fill his Cabinet with individuals who share his vision and can effectively advocate for his policies. In announcing her nomination, Trump emphasized Rollins’ commitment to supporting American farmers, whom he described as “the true backbone of our country.” This aligns with his broader agricultural policies, which have focused on protecting farmers from international competition and providing them with substantial aid during trade disputes. Those policies will likely continue in Trump 2.0.
The decision to nominate Rollins also comes after a period of internal deliberation within Trump’s circle regarding who would best fit the role. Despite some expectations that he might choose someone with more direct agricultural experience, such as former Sen. Kelly Loeffler, Trump opted for Rollins amid ongoing discussions about the position. This suggests that loyalty and established relationships within his inner circle played a crucial role in her selection.
As for the parlor game on guessing USDA or any Cabinet appointments, this should again show it truly is a game of conjecture that frequently changes. Regarding the USDA slot, some potential candidates should have learned, again, that you do not lobby for the position, especially with Trump and his top officials who abhor such a development.
A former USDA official emails: “I have said this until I am blue in the face… this speculation about Ag secretary is a complete waste of time… a vast majority of the time if you are on a list… it isn’t THEIR list… over my career I have seen this time and time again… people like to see their name on a list… but the only real list that matters is the one the inner circle for the President-elect has… and a vast majority of the time it doesn’t have any of the names put out by the press. PS: I love that CNN was the first one to say it was Loeffler… a fitting end to their great election coverage.”
— GOP nominee scrutiny intensifies amid transition. President-elect Donald Trump’s intelligence and defense nominees are under fire as confirmation battles heat up. Tulsi Gabbard, nominated for director of national intelligence, faces bipartisan questions over her 2017 meeting with Syrian President Bashar al-Assad and her past comments on Russia. Sen. James Lankford (R-Okla.) emphasized the need for clarity on her actions during her congressional tenure.
Defense nominee Pete Hegseth also draws attention over past sexual assault allegations, which he denies, as some Republican senators rally to his defense. Meanwhile, Trump’s team signals potential shifts in U.S. foreign policy, particularly regarding Ukraine, while affirming unity during the presidential transition.
— Trade policy in 2025: navigating uncertainty. As President-elect Donald Trump prepares to re-enter the White House, trade policy is expected to take center stage in 2025. While the president has significant unilateral authority over trade decisions, collaboration with select government agencies remains a key component of the process. For those seeking clarity on the evolving trade landscape, a Wells Fargo commentary and graphic provide a concise overview of recent trade legislation, key decision-makers, and the timeline for potential changes.
OTHER EVENTS & HEARINGS |
Monday, Nov. 25
· White House turkey pardon, Christmas tree. White House hosts the National Thanksgiving Turkey Presentation to “pardon” two turkeys raised in Northfield, Minnesota, by National Turkey Federation Chairman John Zimmerman and his family on their turkey farm. The White House also hosts an event with military-connected families to receive the 2024 White House Christmas Tree, a 20-foot Fraser Fir from Newland, North Carolina.
· U.S./China rivalry. Center for Strategic and International Studies virtual discussion on “Difficult Decisions: Allies’ Perspectives on the U.S./-China Rivalry.”
· Energy security. German Marshall Fund of the United States discussion on “Geopolitics and Energy Security.”
· NATO and the Baltic Sea region. Johns Hopkins University School of Advanced International Studies Bologna Institute for Policy Research virtual discussion on “Beyond NATO Expansion: Ensuring Security in the Baltic Sea Region.”
Tuesday, Nov. 26
· China’s economy. Brookings Institution virtual discussion on “China’s Slowing Economy: What China is Doing About It, and What It Means for the Rest of the World.”
· SEC agenda. Federalist Society for Law and Public Policy Studies virtual discussion on “What Could the Next Administration’s SEC Agenda Look Like?”
Wednesday, Nov. 27
· Markets will observe normal trading hours.
· Thanksgiving-related feeding events. Safeway, Goodwill, FAITH-Glen Burnie, others host events to provide Thanksgiving meals.
Thursday, Nov. 28
· Thanksgiving. U.S. gov’t offices and markets are closed for the Thanksgiving holiday.
· Thanksgiving run. So Others Might Eat (SOME) holds annual Thanksgiving “Trot for Hunger,” to support the hungry and homeless.
· Holiday display. U.S. Botanic Garden opens its annual “Season’s Greenings” holiday display featuring G-gauge model trains that will run daily between 10 a.m. and 5 p.m. in the gated outdoor gardens, and the Conservatory will feature poinsettias, holiday decor, and D.C. landmarks made from plants; runs through Jan. 5 except for Christmas Day.
Friday, Nov. 29
· Market schedules. U.S. gov’t offices are open. The New York Stock Exchange will observe abbreviated trading hours, closing at noon CT. The bond market will close early at 1 p.m. CT. U.S. grain and livestock markets will close early at 12:05 p.m. CT.
· Holiday displays. George Washington’s Mount Vernon holds its “Winter Glow” to kick off the holiday season with an “18th-century experience surrounded by festive lighting set to holiday music.”
ECONOMIC REPORTS & EVENTS |
Wall Street gears up for a shorter trading week due to Thanksgiving on Thursday, with early closure on Friday. Despite the break, key economic and corporate updates dominate the calendar:
• Economic data: Wednesday will bring a data surge, including initial jobless claims, an updated U.S. GDP growth estimate, and October’s personal income and outlays report, featuring the Fed’s favored inflation gauge — the core PCE price index.
• Federal Reserve: Minutes from the November policy meeting will be released Tuesday. The likelihood of a December rate cut remains uncertain following Chair Jerome Powell’s cautious comments.
• Earnings and IPOs: Major names like Dell, CrowdStrike, and Analog Devices are set to report earnings. Additionally, Chinese robotaxi firm Pony AI will launch its IPO, targeting a $4.6 billion valuation with shares priced between $11 and $13.deflator numbers.
Monday. Nov. 25
· Chicago Fed National Activity Index
· Dallas Fed Mfg. Survey
· Earnings: Zoom
Tuesday, Nov. 26
· September’s figures for the S&P CoreLogic Case-Shiller index of U.S. house prices. The index dropped by 0.3% in August, the first month-on-month decline since January.
· FHFA House Price Index
· Consumer Confidence
· Richmond Fed Manufacturing
· New Home Sales
· FOMC Minutes
· Earnings: Dell and HP
Wednesday, Nov. 27
· Durable Goods Orders
· GDP
· International Trade in Goods
· Wholesale Inventories
· Jobless Claims
· Personal Income & Outlays
· Chicago PMI
· Pending Home Sales Index
Thursday, Nov. 28
· Thanksgiving. U.S. gov’t offices and markets are closed for the Thanksgiving holiday.
Friday, Nov. 29
• America’s Christmas shopping season officially starts on Black Friday. A report from Deloitte forecasts that sales over the season will grow at their slowest pace since 2018, as frugal consumers become more reluctant to tap their savings for spending splurges.
• Canada’s economy has been expanding by 2.1% at an annualized rate in the second quarter. Figures for the third quarter will be released. One headwind comes from the new tariffs that U.S. President-elect Donald Trump is contemplating. Canada sends about 75% of its exports to the United States.
• Euro area releases inflation data for November. The annual rate was 2% in October, up from 1.7% in September.
KEY USDA & INTERNATIONAL AG & ENERGY REPORTS & EVENTS |
Key upcoming events in agriculture and sugar markets:
• Monday: The European Commission will release its monthly crop conditions report.
• Tuesday-Wednesday: The International Sugar Organization (ISO) will host a two-day seminar in London.
• This week: Brazil’s Conab will publish data on cane, sugar, and ethanol production.
In the energy sector, the North Sea crude loading schedules for January are anticipated this Thursday, coinciding with the expiration of Brent futures for the same month. Meanwhile, the Energy Intelligence Forum in London will convene, featuring prominent industry leaders as speakers.
Monday, Nov. 25
Ag reports and events:
· Export Inspections
· Food Price Outlook
· Cotton and Wool Yearbook
· Cold Storage
· Peanut Stocks and Processing
· Poultry Slaughter
· Crop Progress
· JRC MARS bulletin on crop conditions in Europe
· Malaysia’s Nov. 1-25 palm oil exports
· Unica cane crush, sugar production (tentative)
Energy reports and events:
· Energy Intelligence Forum, London; runs through Wednesday
· G7 foreign ministers meeting in Fiuggi/Anagni, Italy, with discussions to include the crises in the Middle East and Ukraine; runs through Tuesday
· Holiday: Myanma
Tuesday, Nov. 26
Ag reports and events:
· International Sugar Organization Seminar, London, day 1
· EU weekly grain, oilseed import and export data
· Dairy products: Per capita consumption (Annual)
· Outlook for US Agricultural Trade
· Per capita consumption of selected cheese varieties (Annual)
Energy reports and events:
· API US inventory report
· EU-GCC Investment & Finance Green Transition Forum, Abu Dhabi
· Energy Risk Europe Conference, London
· Brent January options expire
· Equinor Autumn Conference, Oslo
· Energy Intelligence Forum, London (through Nov. 27)
· G7 foreign ministers meeting in Fiuggi/Anagni, Italy, with discussions to include the crises in the Middle East and Ukraine (last day)
Wednesday, Nov. 27
Ag reports and events:
· International Sugar Organization Seminar, London, day 2
· Livestock and Meat Domestic Data
· Broiler Hatchery
Energy reports and events:
· Energy Intelligence Forum, London (last day)
· European Aviation Conference, Antwerp (through Nov. 29)
· EIA Petroleum Status Report
· Weekly Ethanol Production
· EIA Natural Gas Report
· Genscape weekly crude inventory report
· Power Europe conference, Amsterdam; runs through Friday
· BNEF Forum Paris: Industry Decarbonization
· Baker-Hughes Rig Count
Thursday, Nov. 28
Ag reports and events:
· Brazil’s Conab to release cane, sugar and ethanol output data
· Port of Rouen data on French grain exports
Energy reports and events:
· Insights Global weekly oil product inventories in Europe’s ARA region
· European Aviation Conference, Antwerp (through Nov. 29)
· Singapore onshore oil product stockpile weekly data
· Electricity Storage Network Annual Conference 2024, London
· Power Europe conference, Amsterdam; runs through Friday
· North Sea programs due (January)
· Holiday: United States; Panama
Friday, Nov. 29
Ag reports and events:
· FranceAgriMer’s weekly crop condition report
· CFTC Commitments of Traders delayed until Monday
· Export Sales
· Egg Products
· Agricultural Prices
· Peanut Prices
Energy reports and events:
· Power Europe conference, Amsterdam (last day)
· European Aviation Conference, Antwerp (last day)
· ICE weekly Commitments of Traders report for Brent, gasoil
· Brent January futures expire
KEY LINKS |
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 | | Russia/Ukraine war, lessons learned | | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | New farm bill primer | | Gov’t payments to farmers by program | Farmer working capital | USDA Ag Outlook Forum |