Dysfunctional House Again Faces FY 2024 Funding Deadline

Houthi ship attacks | U.S. boosts sanctions on Russia | Fedspeak | Natgas prices | Election updates

Jim Wiesemeyer

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February 23, 2024 08:37 AM

Houthi ship attacks | U.S. boosts sanctions on Russia | Fedspeak | Natgas prices | Election updates

Today’s Digital Newspaper

MARKET FOCUS

Nvidia surge continues
CNN fear/greed indicator currently at 78, signaling “extreme greed”
Fed Vice Chair foresees soft landing with rate cuts on horizon
Other Fedspeak
Goldman Sachs adjusts, now says Fed will start reducing interest rates in June
FinCEN proposes reporting requirement for cash real estate purchase
AT&T outage being investigated
U.S. destroys 6 drones as Houthi ship attacks continue
Despite Houthi attacks in Red Sea, there is optimism in global shipping industry
U.S. container imports, especially on West Coast, experiencing a surge
Moody’s: Red Sea attacks not driving inflation
Renewable diesel’s surge outpacing market demand
U.S. natural gas market finds price floor
Recent weekly EIA report delivered mixed outcome
U.S. natural gas market finds price floor
Agricultural land values strong in 2023, resilient despite economic factors
Ag markets today
Soybeans main sales item to China in weekly USDA update
Ag trade update
NWS weather outlook
Pro Farmer First Thing Today items

CONGRESS

FY 2024 deadlines approaching
Next week in Senate; USDA Secretary Vilsack to testify Wednesday

ISRAEL/HAMAS CONFLICT

Netanyahu presents post-war plan for Gaza
CIA Director William Burns to meet senior leaders from Middle East

RUSSIA & UKRAINE

President Biden slaps sanctions on 500 Russian targets
Schumer visits Ukraine, meets with Zelenskyy and Ukrainian military officials
Latvia first EU country to ban agricultural imports from Russia and Belarus

POLICY

Equity commission releases recommendations for USDA reform

CHINA

Xi Jinping stresses need to reform strict farmland quotas for economic development
China securities regulator says penalties will be severe in market crackdown

ENERGY & CLIMATE CHANGs

EPA will allow Midwest states to request year-round availability of E15 fuel in 2025
Reuters: SEC removes Scope 3 emissions reporting requirement for U.S.-listed firms

LIVESTOCK, NUTRITION & FOOD INDUSTRY

FDA releases guidance for plant-based genome editing
USDA to announce additional rule under the Packers and Stockyards Act

POLITICS & ELECTIONS

South Carolina’s Republican primary takes place Saturday
Gallup: Biden’s job approval edges down to 38%
Potential scenarios if Biden or Trump exit party ticket before inauguration
Cori Bush faces steep primary defeat amidst spending controversy
Assessing some House toss-up races
Report: To succeed in rural areas, Dems must embrace authentically rural candidates
A second dose of Trump on trade would differ from the first

OTHER ITEMS OF NOTE

Courts and migrants
Cotton AWP hits highest mark in more than a
Private American spacecraft, Odysseus, lands on moon

MARKET FOCUS

— Equities today: Asian and European stock markets were mixed but mostly firmer in overnight trading. U.S. Dow opened up around 100 points. Stock markets in Europe reached a new record high on Friday. A day earlier the Stoxx Europe 600 beat a record set in January 2022. The U.S. (Dow and S&P 500) and Japan also reached all-time highs on Thursday, spurred by Nvidia’s bumper earnings report. In Asia, Japan closed. Hong Kong -0.1%. China +0.6%. India flat. In Europe, at midday, London flat. Paris +0.6%. Frankfurt +0.1%.

U.S. equities yesterday: All three major indices registered gains with the Dow and S&P 500 notching new record closes while the Nasdaq traded above its prior record finish but didn’t finish above that level. The Dow gained 456.87 points, 1.18%, at 39,069.11. The Nasdaq rose 460.75 points, 2.96%, at 16,041.62. The S&P 500 was up 105.23 points, 2.11%, at 5,087.03.

— Nvidia’s surge to an all-time high is the biggest single-session increase of market value in history, besting Meta’s historic gain just three weeks ago. Shares of the chipmaker jumped 16% Thursday, adding about $277 billion in market capitalization and bringing its total market value near $2 trillion. The addition eclipsed the $197 billion gain made by Facebook-parent Meta at the start of the month.

— The CNN fear/greed indicator is currently at 78, signaling “extreme greed,” a significant shift from its “Extreme Fear” reading of 20 in early October. This indicator, increasingly followed on Wall Street, amalgamates seven momentum and sentiment indicators, offering a comprehensive view of investor and market sentiment. The prevailing message is unambiguous: Investors exhibit greed and perceive minimal near-term risks.

— Ag markets today: Corn, soybeans and wheat firmed amid corrective buying during the overnight session. As of 7:30 a.m. ET, corn futures were trading 2 cents higher, soybeans were 2 to 6 cents higher, SRW wheat was 5 to 7 cents higher, HRW wheat was 1 to 2 cents higher and HRS wheat was 3 to 4 cents higher. Front-month crude oil futures were more than $1.00 lower, and the U.S. dollar index was down nearly 150 points.

Predictably slow developing cash cattle market. Cash cattle negotiations remained limited Thursday, with neither packers nor feedlots in a hurry to get anything done. This week’s trade will likely come after the Cattle on Feed Report – and could be limited in volume unless packers unexpectedly become active bidders for supplies. Packers are trying to improve current poor margins and manage supplies. A strong performance in wholesale beef trade with strong price gains and active movement on Thursday will help, though packer margins remain deep in the red.

Cash hog fundamentals stay strong. The CME lean hog index rose another 81 cents to $78.78 as of Feb. 21, extending the seasonal recovery that started at the beginning of this year. The pork cutout value firmed $1.72 to $91.89 after losses the two previous days. Price action over the past week suggests the $90.00 level may have flipped from a ceiling to a price floor for the pork cutout.

— Agriculture markets yesterday:

Corn: March corn fell 5 cents to $4.06, a new contract low close.
Soy complex: March soybean futures fell 13 cents to $11.47 3/4, marking a fresh for-the-move low and settling near session lows. March soymeal futures dropped $7.10 to $334.90, closing near session lows. March bean oil futures slid 62 points to 44.21 cents.
Wheat: May SRW wheat closed up 1 1/4 cents at $5.79 1/4. May HRW wheat lost 3 cents at $5.71 1/2. Both markets’ prices closed nearer their session lows. May spring wheat futures dropped 6 cents to $6.55 1/2, settling near session lows.
Cotton: May cotton futures surged 123 points before settling at 94.46 cents, nearer session highs. Nearby March futures rose 160 points to 94.20 cents.
Cattle: April live cattle fell $1.15 at $186.55, nearer the session low and hit a 3.5-month high early on. May feeder cattle rose 20 cents at $259.325, nearer the session low after reaching a four-month high early in the day.
Hogs: Hog futures once again broke out to the upside Thursday, with nearby April jumping $1.225 to $87.20.

— Quotes of note:

Fed Vice Chair foresees soft landing with rate cuts on horizon. Philip Jefferson, the Vice Chair of the Federal Reserve’s Board of Governors, predicts a soft landing for the U.S. economy, anticipating future interest rate cuts. Jefferson, a voting member of the Federal Open Market Committee (FOMC), believes that if inflation continues to ease, policy restraint will likely be dialed back later in the year. His assessment aligns with recent statements from other Fed officials, including Chairman Jerome Powell.
Despite acknowledging a robust economic outlook, Jefferson highlighted the need for continued vigilance regarding inflation, which has been gradually moderating. He emphasized the importance of consumer spending and the labor market in influencing inflation dynamics. Jefferson compared the current economic environment to the mid-1990s, suggesting parallels with a potential soft-landing scenario.
However, Jefferson also identified uncertainties that could impact Fed policy decisions, including resilient consumer spending, potential weakening of employment, and geopolitical risks. He advises caution against moving too quickly to reduce rates, as excessive easing could hinder progress in restoring price stability.
Futures-market pricing implies about a 30% likelihood of a reduction in the federal-funds rate — currently at a target range of 5.25% to 5.50% — at the FOMC’s May meeting and 70% odds for a rate cut in June.
Other Fedspeak: Philadelphia Fed President Patrick Harker emphasized the risks of easing policy too soon while saying it will likely be appropriate to cut this year. And Governor Lisa Cook said she would like to see more progress on inflation before beginning to cut interest rates.
Economists at Goldman Sachs have adjusted their prediction for when the Federal Reserve will start reducing interest rates, moving it from May to June. This change comes in response to recent statements from Fed officials indicating reduced worry about maintaining rates at higher levels for an extended period. The economists note that the Fed has emphasized the necessity of concrete evidence indicating a slowdown in inflation before implementing rate cuts.
Courts and migrants: “The legality of any proposal will ultimately turn on the details that emerge but the courts have already made clear during the Trump administration that asylum may not be categorically foreclosed simply based on where one enters the country.” — Lee Gelernt, an attorney with the American Civil Liberties Union/

— FinCEN proposes reporting requirement for cash real estate purchase. The Financial Crimes Enforcement Network (FinCEN) is proposing a new requirement for certain financial entities, like title companies, to report cash purchases of residential real estate. The aim is to combat potential money laundering, particularly in large cities such as New York or Miami, where purchases via LLCs or trusts are common. In a dispatch on Farm CPA Report’s (link) Paul Neiffer notes that under the proposal, any cash purchase of residential real estate by a trust, LLC, or similar entity would need to be reported. This includes land intended for future home construction, potentially impacting farmland purchases. However, financed purchases through regulated financial institutions would be exempt, except in cases where the seller provides financing.

Certain low-risk transfers, such as those due to death, divorce, or bankruptcy, would be exempt from reporting. However, there is no exemption based on property value.

In transactions involving no reporting person, such as a title company, the individual preparing the deed, often an attorney or title company, would be responsible for reporting.

For farmers, most transactions financed by banks would be exempt. However, cash purchases or those involving seller financing could trigger reporting requirements, adding an additional bureaucratic layer. “All-in-all, just another layer of bureaucracy that farmers will have to deal with if this requirement is put into place. It is currently just a proposal but will likely happen sometime in the future. While the proposal is not yet finalized, it is expected to be implemented in the future,” Neiffer concludes.

— Agricultural land values strong in 2023, resilient despite economic factors. Despite a slowdown in the farm economy and rising interest rates, agricultural real estate values remained robust until the close of 2023. Reports from Federal Reserve District Surveys indicate that the value of nonirrigated cropland surged by up to 10% in certain regions compared to the previous year. While increased financing costs and narrower profit margins for key commodities could potentially dampen farmland values, as of the beginning of 2024, these factors have not significantly impacted land markets. Link for details.

Market perspectives:

— Outside markets: The U.S. dollar index was weaker, with the euro and British pound both firmer against the greenback. The yield on the 10-year U.S. Treasury note was weaker, trading around 4.30%, with a mostly negative tone in global government bond yields. Crude oil futures continued lower, with US crude falling to around $77.30 per barrel and Brent to around $81.50 per barrel. Gold and silver were firmer ahead of US trading, with gold around $2,037 per troy ounce and silver around $22.78 per troy ounce.

— Despite recent challenges such as Houthi attacks in the Red Sea, there is optimism in the global shipping industry due to the influx of container ships ordered two to three years ago, according to industry forecasts cited by the New York Times (link). These ships were ordered during the pandemic-driven surge in world trade, and their entry into service is expected to help shipping companies maintain regular service, particularly for longer-distance routes.

Moreover, U.S. container imports, especially on the West Coast, are experiencing a surge, as reported by industry observer Freightwaves (link). The increase in January’s inbound volume, following a rise in December, reflects robust demand for tangible goods and demonstrates the economy’s resilience despite challenges.

— Moody’s: Red Sea attacks not driving inflation. The conflict in the Red Sea escalated Thursday as U.S. forces and a coalition warship intercepted and destroyed six Houthi drones deemed a threat to coalition vessels. Concurrently, a Houthi missile struck a cargo ship, reportedly owned by the UK, in the Gulf of Aden. Earlier, the Houthis declared a ban on ships linked to Israel, the U.S., and Britain, alleging support for Gaza Palestinians, and have been targeting vessels from these countries since November. While attacks on merchant vessels in the Red Sea have delayed cargo and sent shipping costs higher, soft demand and ample ship availability are muting the impact on inflation, analysts from Moody’s Investor Service said.

— Renewable diesel’s surge is outpacing market demand, creating a challenging outlook for refiners in 2024, according to agricultural economist Scott Irwin of the University of Illinois. Despite exceeding the Renewable Fuel Standard mandate, U.S. production capacity for biodiesel and renewable diesel continues to rise, expected to surpass 7 billion gallons soon. This oversupply situation is anticipated to worsen in 2024, prompting plant closures and reduced production. While the boom has boosted soybean prices for farmers, the global increase in supplies is offsetting this benefit, dampening expectations of renewable diesel as a solution to agricultural challenges — for farmers, the boom has meant an additional $2 a bushel in soybean prices; soybean oil is a leading feedstock for renewable diesel. Link to video of webinar.

— U.S. natural gas market finds a price floor. Prices for the fuel had their biggest single-day gain in more than 18 months Wednesday after one of the largest domestic producers, Chesapeake Energy Corp., said it was slashing its output forecast. Bloomberg notes that gas storage levels are more than 20% above the five-year average. So even if other producers follow Chesapeake’s lead and cut production, there’s still plenty of backup fuel to burn through.

— Recent weekly EIA report delivered a mixed outcome, with a smaller-than-expected crude build and a significant draw in distillates, perceived as bullish by investors. WTI crude oil futures saw a modest gain of 0.73%, while refined products outperformed, with gasoline futures rising by 1.54% and distillate futures by 1.70%.

Commercial crude oil stockpiles increased by 3.5 million barrels last week, slightly surpassing estimates but notably lower than API’s reported build. The smaller build, coupled with a minor draw in gasoline and a substantial drawdown in distillate stockpiles, supported a rally post-release of the data.

The refinery utilization rate remained stagnant at 80.6%, contributing to the recurring pattern of oil builds and product inventory drawdowns due to low input demand. Concerns are arising about potential product supply constraints if refinery utilization doesn’t pick up significantly in the coming weeks, further fueling the bid in energy markets.

While gasoline demand saw a modest increase, distillates demand surged, explaining the significant draw in distillate stockpiles. However, demand is steady, though not robust enough to fully support a rally beyond $80/barrel in WTI.

Overall, the uptrend in oil prices from the previous week remains intact but fragile, supported by tight physical markets and positive fundamental influences. The next target for oil is $80.50/barrel, with initial support levels at $76 to $78/barrel.

— Ag trade update: Egypt purchased 60,250 MT of soyoil from unspecified origins. Tunisia purchased about 100,000 MT of soft wheat from unspecified origins.

— NWS weather outlook: Light snow over parts of Northern New England on Saturday... ...Light snow over parts of the Upper Midwest to the Central Appalachians... ...Rain along the East Coast from the Mid-Atlantic to the Southeast on Saturday.

Items in Pro Farmer’s First Thing Today include:

• Grains firmer overnight
• French wheat crop ratings inch up
• China’s new home prices extend declines despite support measures
• Cold Storage Report out this afternoon

CONGRESS

— Congress faces a packed agenda, balancing crucial must-pass items with internal strife. Funding the gov’t is the immediate priority, with a shutdown looming if action isn’t taken by March 1 for 20% of the government (including USDA) and March 8 for the remaining 80%. While lawmakers aim to avert a shutdown, time constraints and recess schedules make another temporary funding bill likely. House Speaker Mike Johnson’s (R-La.) leadership challenges among House Republicans add complexity, impacting decision-making. Major legislation, including military aid and surveillance reform, faces uncertainty, with bipartisan bills like rail safety measures also stalled. However, a bipartisan tax package stands as a potential breakthrough amid the gridlock. Legislative efforts are expected to wind down by late spring to focus on campaigning ahead of the elections.

Of note: The House Freedom Caucus posted a letter (link) with its demands for riders to appropriations bills.

— Next week, the Senate will commence the trial of Alejandro Mayorkas following his impeachment by the House earlier this month. The week kicks off with votes on advancing judicial nominations for the Southern District of Florida and confirming Hampton Dellinger for the U.S. Office of Special Counsel. Additionally, various bills addressing issues such as revitalizing Washington’s RFK stadium, combating Covid-19 loan fraud, expediting nuclear energy licensing, and addressing small business and education matters are up for possible House votes. Acting Labor Secretary Julie Su’s confirmation vote is scheduled for Tuesday in the Senate Health, Education, Labor, and Pensions Committee, while USDA Secretary Tom Vilsack will testify before the Senate Agriculture Committee on Wednesday.

ISRAEL/HAMAS CONFLICT

— Binyamin Netanyahu, Israel’s prime minister, presented his post-war plan for Gaza. Netanyahu called for “complete demilitarization” in the enclave and refused to recognize a Palestinian State. His proposal also includes plans for an indefinite Israeli military presence in Gaza. It does not mention the Palestinian Authority, which currently runs the West Bank. The plans are at odds with U.S. officials.

Of note: CIA Director William Burns is expected to meet senior leaders from the Middle East in the coming days, a possible sign that negotiations have revived to pause the fighting and secure the release of hostages held by Hamas.

RUSSIA/UKRAINE

— President Biden announced sanctions against Russian President Vladimir Putin in response to the death of Russian opposition figure Alexei Navalny. The decision came after a meeting with Navalny’s widow and daughter. Navalny died in a penal colony, with Russian authorities attributing his death to natural causes, a claim disputed by Biden and Navalny’s supporters, who blame Putin. Navalny, a prominent critic of Putin, was serving a prison sentence widely condemned as politically motivated. He had previously survived an assassination attempt believed to be orchestrated by the Russian internal security service.

Biden had warned Putin during a summit in 2021 about the consequences of Navalny’s death. The sanctions, described as “robust,” aim to choke off the Russian war machine and will build upon previous measures, including blacklisting Putin and sanctioning Russian banks. Despite sanctions, Russia has managed to sustain its economy by selling oil and evading restrictions on critical technologies through third countries.

Hundreds of new measures will hit Russia’s war machine ahead of the second anniversary of its full-scale invasion of Ukraine on Saturday. Other reported targets include companies around the world that help Russia avoid sanctions, as well as people involved in the death last week of Alexei Navalny.

— Senate Majority Leader Chuck Schumer (D-N.Y.) arrived in Ukraine Friday morning, Punchbowl News reports, marking the highest-ranking congressional leader’s visit to the war-torn nation since then-Speaker Nancy Pelosi’s (D-Calif.) trip nearly two years prior. Schumer’s delegation landed in Lviv, western Ukraine, from Poland, with plans to meet President Volodymyr Zelenskyy and Ukrainian military officials.

In an interview with Punchbowl News ahead of his visit, Schumer said his goal is twofold — reassure the Ukrainians that “America has not given up on them,” and try to persuade his colleagues back home, particularly House Speaker Mike Johnson (R-La.), to move swiftly on an aid package. “We want to get in detail about how the lack of armaments and the inability to pass this supplemental hurts Ukraine, and what the consequences will be if we don’t do it.”

Four other Democratic senators joined Schumer in Ukraine — Jack Reed (D-R.I.), Richard Blumenthal (D-Conn.), Michael Bennet (D-Colo.) and Maggie Hassan (D-N.H.). When asked about it not being a bipartisan delegation, Schumer noted that Senate Minority Leader Mitch McConnell (R-Ky.) only took Republicans with him when he visited Ukraine in May of 2022.

— Latvia became the first EU country to ban agricultural imports from Russia and Belarus, a move prompted by Moscow’s invasion of Ukraine. The ban, approved by Latvia’s parliament, reflects the nation’s strong stance against Russia’s actions and its push for tougher sanctions. The prohibition excludes transit of grain to other markets. Janis Reirs, chairman of the budget committee, emphasized the importance of economic security in national security and condemned support for the Russian regime through consumption of its products.

Although the EU doesn’t heavily rely on Russian grain imports, Latvia imported €280 million ($303 million) worth of Russian agricultural products in the first 10 months of 2023, making it the second largest importer in the EU. The government has two weeks to issue regulations after the law’s enforcement.

POLICY UPDATE

— Equity commission’s recommendations for USDA reform aim for ‘sweeping and generational change.’ USDA is urged to implement extensive reforms to ensure fairness for all, according to recommendations from an administration-appointed commission. The Equity Commission, led by co-chair Ertharin Cousin, proposed 66 unanimously adopted recommendations (link) spanning nine areas, including eliminating bias in USDA offices and programs and extending SNAP benefits to U.S. territories. USDA Secretary Tom Vilsack emphasized the seriousness of addressing historical injustices, affirming commitment to the commission’s proposals. Former United Farm Workers union president Arturo Rodriguez highlighted the importance of including farmworker perspectives in the process, with recommendations addressing farmworker conditions and access to nutrition programs. Rep. David Scott (D-Ga.) views the report as a significant step towards rectifying systemic inequities within USDA programs, ultimately benefitting American agriculture.

CHINA UPDATE

— Soybeans main sales item to China in weekly USDA update. USDA’s weekly update on Export Sales of U.S. ag commodities for the week ended Feb. 15 included no sales activity for 2024-25 and activity for 2023-24 that included net sales of 3,522 metric tons of wheat, 127 metric tons of corn, 8,797 metric tons of sorghum, 391,710 metric tons of soybeans (mostly switched from unknown destinations to China) and net sales of 6,905 running bales of upland cotton. Net sales for 2024 of 750 metric tons of beef and 601 metric tons of pork were also reported.

— China leader Xi Jinping emphasized the need to reform strict farmland quotas to foster economic development during a recent meeting of the Central Commission for Comprehensively Deepening Reform (CCCDR). China’s current land management system, focused on protecting farmland to ensure food security, hampers development in areas like suburban Shanghai and Shenzhen. The CCCDR approved a document to reform land policies, aiming to free up land for development in economically advantageous regions. Pilot efforts are expected to begin this year, potentially unlocking growth potential in industries like food processing and cold chain logistics, according to Trivium China.

— China securities regulator says penalties will be severe in market crackdown. China’s securities regulator said it would toughen penalties on fraudulent listings, accounting scams and misappropriation of funds by big shareholders, as part of a crackdown to boost confidence in the stock market. The China Securities Regulatory Commission (CSRC) also said it would target insider trading and market manipulation more precisely, removing regulatory blind spots. In the two weeks since veteran regulator Wu Qing was appointed CSRC chair, the watchdog has increased scrutiny on computer-driven quant trading and punished breaches of market rules.

— China’s real-estate crisis just got worse. A prolonged fall in home prices shows the huge task facing policymakers, who have so far proved unable to turn the market around. Link to details via the Wall Street Journal.

ENERGY & CLIMATE CHANGE

— EPA announced that it will allow Midwest states to request year-round availability of E15 fuel starting in 2025. This decision comes as the EPA plans to remove the 1-pound per square inch (psi) Reid vapor pressure (RVP) waiver for summer gasoline-ethanol blended fuels containing 10% ethanol. Effective April 28, 2025, the waiver will be removed in Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin. Additionally, the EPA will finalize regulatory amendments to remove the 1-psi waiver for E10 in these states and establish a process for requesting reinstatement of the waiver. The EPA also intends to eliminate regulations that extended the 1-psi RVP waiver to fuel blends between 10% and 15% ethanol. This decision follows input from public meetings and a comment period, with the EPA citing concerns over insufficient fuel supply as a reason for delaying the effective date. Link to pre-publication of the final rule.

The final rule was sent to the Office of Management and Budget for review on Dec. 18 with five meetings held at the agency on the topic. While OMB still showed the final rule as pending review as of Feb. 22, expectations are that it will change to being completed as of Feb. 22 as EPA Administrator Michael Regan signed the final rule on that date and it will be published at some point in the future in the Federal Register.

Link to access the pre-publication final rule, technical support documents and cost analysis, and responses to public comments.

Of note: Prior to EPA’s announcement, USDA Secretary Tom Vilsack said until year-round sales of E15 is cleared next year, the administration would likely issue temporary waivers this summer to enable such sales as needed — as it did in 2022 and 2023. The American Coalition for Ethanol (ACE) said “The administration rightfully exercised its authority to grant emergency waivers in 2022 and 2023, and we will be pushing for a solution covering the summer of 2024 as well.”

Renewable Fuels Association President Geoff Cooper said the decision is “a double-edged sword.” “On one hand, the EPA decision finally allows retailers in these eight states to sell E15 year-round. But on the other hand, it delays implementation until 2025, creating uncertainty and confusion about the availability of lower-cost, lower-carbon E15 this coming summer.” Cooper said, “While we are pleased to see EPA has finally approved year-round E15 in these eight states, we are extremely disappointed by the agency’s needless decision to delay implementation until 2025. It’s helpful to finally have some certainty about 2025 and beyond, but what happens this summer? The Biden administration missed its statutory deadline to finalize the governors’ petition by more than 500 days, and now it claims there just isn’t enough time to implement the rule in time for summer 2024.”

“Why should ethanol producers, farmers, fuel retailers, and consumers in these states be penalized for EPA’s foot-dragging and failure to meet a clear deadline? With the 2024 summer driving season just a few months away, we are urging the administration to take additional action that will ensure consumers have uninterrupted access to lower-cost, lower-carbon E15 this summer,” Cooper said.

Cooper also said RFA is urging Congress to adopt legislation that would resolve this issue permanently. “If Congress passed the bipartisan Nationwide Consumer and Fuel Retailer Choice Act, we wouldn’t be in this situation. But a couple of stubborn East Coast refiners and their champions in the Senate continue to put up roadblocks to the enactment of this commonsense legislation that would slash emissions and reduce fuel prices for consumers. It’s time to lay aside parochial oil refiner interests and do what is right for the country.”

Growth Energy CEO Emily Skor said, “We commend EPA for finalizing its rule, and we thank the eight midwestern governors who have now successfully secured a future for year-round E15 in their states. This is a win for the residents of Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin, and a win for biofuel producers and fuel retailers.” Skor added that “while this is great news, drivers will need a solution for this summer to minimize disruptions and make sure they have the same access to E15 that they’ve had for the past five summers. E15 saves drivers money while helping them lower their carbon emissions. We look forward to working with policymakers to ensure that consumers can have permanent access to these benefits all year long.”

— Reuters: SEC removes Scope 3 emissions reporting requirement for U.S.-listed companies. The Securities & Exchange Commission (SEC) has reportedly removed the requirement for U.S.-listed companies to report Scope 3 emissions, which include greenhouse gases released throughout a company’s supply chain and product consumption by customers, according to Reuters. Scope 3 emissions can constitute up to 70% of a company’s carbon footprint. Concerns were raised in the agricultural sector regarding potential additional reporting burdens on farmers. While it’s unclear if reporting requirements for Scope 1 and Scope 2 emissions, more directly linked to company operations, were altered, the SEC stated that changes to its draft regulation were considered based on public feedback. The final regulation draft requires approval from all five SEC commissioners, and it’s uncertain when this vote will occur. USDA Secretary Tom Vilsack expressed concerns about Scope 3 emissions reporting, emphasizing the importance of voluntary, incentive-based approaches over mandates. Some worry that broad reporting mandates could lead to legal challenges, though SEC Chairman Gary Gensler maintains the rule’s legal defensibility.

LIVESTOCK, NUTRITION & FOOD INDUSTRY

— FDA released guidance for industry on voluntary premarket engagement for foods derived from plants produced using genome editing. This guidance aims to support innovation and provide more food choices for consumers. It reaffirms the risk-based approach taken by the FDA for foods derived from new plant varieties, which also applies to foods from genome-edited plants. The guidance outlines two voluntary processes through which firms can inform the FDA of the steps taken to ensure the safety of foods from their genome-edited plant varieties: voluntary premarket consultations and voluntary premarket meetings. These processes are designed to facilitate the pathway to market for foods from genome-edited plants while maintaining FDA safeguards. Link for details.

— USDA is set to announce an additional rule under the Packers and Stockyards Act (P&SA), following completion of the Office of Management and Budget’s review of a final rule from USDA’s Agricultural Marketing Service (AMS). This rule, titled “Inclusive Competition and Market Integrity Under the Packers and Stockyards Act,” supplements recent revisions in regulations outlining criteria for determining undue or unreasonable conduct by packers, contractors, or live poultry dealers. Aimed at providing essential clarity, the rule defines violations of the P&SA, irrespective of their impact on competition.

USDA acknowledges industry division regarding the inclusion of specific prohibited conduct examples. Additionally, two proposed rules under review at OMB address unfair practices, preferences, competition harm, and poultry grower payment systems. While USDA’s regulatory agenda targets February for the release of the proposed rule on unfair practices and January for the poultry grower payment system, no timeline is specified for final rules.

POLITICS & ELECTIONS

— South Carolina’s Republican primary takes place Saturday, with Donald Trump leading among likely GOP voters. Nikki Haley, his sole challenger, vows to stay in the race. Winning primaries and caucuses earn delegates, aiming for 1,215 to secure the nomination. Currently, Trump has 63 delegates to Haley’s 17, with 50 at stake in South Carolina. In contrast, South Carolina previously handed President Joe Biden his first primary win of the 2024 campaign on Feb. 3 for the Democrats.

— Gallup: Biden’s job approval edges down to 38%. Americans’ approval of President Joe Biden’s job performance has edged down three percentage points to 38%, just one point shy of his all-time low and well below the 50% threshold that has typically led to reelection for incumbents, according to Gallup. In addition, Biden registers subpar approval ratings for his handling of five key issues facing the U.S., including a new low of 28% for immigration and readings ranging from 30% to 40% for the situation in the Middle East between Israel and Hamas, foreign affairs, the economy and the situation in Ukraine. Biden’s approval rating has not risen above 44% since August 2021, and his 39.8% average rating for his third year in office was the second worst among post-World War II presidents elected to their first term.

— Potential scenarios if Biden or Trump exit party ticket before inauguration. If Joe Biden or Donald Trump were to leave their party’s ticket before Inauguration Day, various scenarios would unfold depending on the timing of the vacancy, according to Politicfact (link):

During the primary voting process: A replacement would be determined at the party’s convention, with delegates playing a crucial role. Both candidates aim to secure delegates to strengthen their positions, should a vacancy arise.
Between the end of primaries and the summer conventions: Delegates would have significant influence, potentially favoring candidates with wider party support. A candidate left standing, like Nikki Haley for Republicans, might contend for the nomination, or delegates could choose an alternative.
Between the end of the convention and Election Day: Democratic rules empower the DNC to name a replacement, likely the vice presidential nominee. For Republicans, the process is less defined, with options including reconvening the national convention.
Between the election and inauguration: The duly elected vice president would become the next president, with a new vice president subject to Senate and House approval. In the case of an incumbent president winning another term, the vice president would immediately assume the presidency.

In the event of a president-elect’s death between electoral vote casting and Congress’s counting on Jan. 6, 2025, the outcome remains uncertain, even for the National Archives and Records Administration.

— Cori Bush faces steep primary defeat amidst spending controversy. The latest poll indicates that Rep. Cori Bush (D-Mo.), known for her socialist views and anti-Israel activism, may face a significant defeat in her own party’s primary. The Remington/MOScout poll reveals that she trails her opponent, St. Louis County Prosecutor Wesley Bell, by a substantial 22 points, with Bush garnering only 28% support compared to Bell’s 50%. This potential outcome is unexpected, as there has been limited public polling on the race, and it was generally assumed that Bush would secure re-election. However, the poll suggests a different reality.

The report coincides with recent revelations regarding Bush’s spending habits, particularly her allocation of $750,000 for private security, a move that raised eyebrows given her advocacy for defunding the police. Most notably, a significant portion of this expenditure appears to have gone to her husband, who lacks a security guard license.

Bottom line: These developments, coupled with the financial figures disclosed for both candidates, paint a challenging picture for Bush’s re-election prospects. The poll, conducted among 401 likely Democrat primary voters from Feb. 7 to 9, signals a potentially significant shift in the race dynamics.

— In the 2024 House elections, a handful of tightly contested races will decide the majority, amid Republicans’ slim lead. In the upcoming 2024 elections, all 435 seats in the House of Representatives are up for contention. However, only a small portion of these races are expected to be closely contested, ultimately determining which party will control the lower chamber in the following year, according to USA Today.

The significance of the 2024 elections is amplified by the fact that Republicans currently hold the slimmest of majorities in the House. This narrow margin has hindered their ability to advance conservative agendas due to dissent within their own ranks.

Key races to watch include, according to USA Today:

Republican seats in districts won by Joe Biden: A focal point of the House races will be the 17 Republicans representing districts won by President Joe Biden in the 2020 election. Defending these seats is crucial for Republicans to maintain their fragile majority or potentially expand it.
Democratic seats in districts won by Donald Trump: There are five Democrats representing districts won by former President Donald Trump in 2020. Republicans see an opportunity to gain more breathing room in their majority by capturing some of these seats.

Also of note:

Michigan: Democratic Representatives Elissa Slotkin and Dan Kildee are vacating their competitive districts, presenting opportunities for Republicans to secure these seats.
California: There’s a chance for Democrats to flip California’s 41st congressional district from Republican to Democratic control, potentially influencing the overall balance of power in the House.

We asked David Wasserman, election analyst at the Cook Political Report with Amy Walter, to assess the above races. Here is how he responded:

Of the 17 Biden-GOP seats, there are 11 outstanding opportunities for Dems to flip seats:

AZ-01 Schweikert
AZ-06 Ciscomani
CA-13 Duarte
CA-22 Valadao
CA-27 Garcia
NJ-07 Kean
NY-04 D’Esposito
NY-17 Lawler
NY-19 Molinaro
NY-22 Williams
OR-05 Chavez-DeRemer

The other six seats are lesser opportunities: CA-45 Steel, NE-02 Bacon, VA-02 Kiggans, CA-40 Kim, NY-01 LaLota, PA-01 Fitzpatrick

Of the 5 Biden Dems, Republicans have excellent opportunities in three:

ME-02 Golden
PA-08 Cartwright
WA-03 Gluesenkamp Perez

The other two are at slightly lesser risk: AK-AL Peltola and OH-09 Kaptur

Also of note:

MI-07 and MI-08 (Slotkin, Kildee) are great pickup opportunities for GOP. CA-41 (Calvert) is a great pickup opportunity for Dems.

— To succeed in rural areas, Democrats must embrace authentically rural candidates, according to insights come from a new survey of over 10,000 rural voters — the largest-ever study of its kind — and hundreds of years of election data on rural voting patterns featured in the book, The Rural Voter: The Politics of Place and the Disuniting of America.” The survey was detailed in an article by Politico (link).

The shift of rural voters towards the Republican Party since the 1980s is attributed to a new identity centered around the shared fate of rural communities, characterized by place-based anxiety and grievance. Candidates who resonate with rural values and identity have shown success, as seen in case studies like Reps. Jared Golden, Marie Gluesenkamp Perez, and Tim Ryan.

The appeal of Donald Trump to rural America is explained not by his persona but by his authenticity as a non-typical politician who empathized with rural issues. Democrats seeking to win in rural America need targeted economic programs that address specific industry needs and demonstrate an understanding of rural concerns, according to observers.

Bottom line: For the 2024 presidential election, the authors say Democrats must recognize the significance of the rural voting bloc and address long-standing rural concerns, which extend beyond partisan allegiances. Failure to engage effectively with rural voters could have detrimental consequences for Democrats at both the national and state levels.

— A second dose of Trump on trade would differ from the first. Expect more emphasis on global trade deficits, more dramatic intervention and bigger problems for Europe. Link/paywall for more via the Financial Times.

OTHER ITEMS OF NOTE

— Cotton AWP hits highest mark in more than a year. The Adjusted World Price (AWP) for cotton rose to 75.12 cents per pound, effective today (Feb. 23), up from 73.44 cents per pound the prior week and the highest in more than a year. The current AWP is the highest since it was 75.24 cents per pound the week of Feb. 3, 2023. Meanwhile, USDA announced that Special Import Quota #19 will be established Feb. 29 for 30,041 bales of upland cotton, applying to supplies purchased no later than May 28 and entered into the U.S. no later than Aug. 26.

— Private American spacecraft, Odysseus, lands on moon. An American spacecraft, named Odysseus and developed by the Houston-based company Intuitive Machines with support from NASA, has achieved the first landing on the Moon by a private company since 1972. Odysseus is equipped with a combination of scientific and commercial instruments, including tools to aid in the establishment of a lunar observatory. It is noteworthy that this is the third spacecraft to successfully land on the Moon within the past 12 months, following missions by India and Japan.

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