Biden meets McCarthy | FDA plan on food policy & regulation | Canada dairy | Over $600 cash rent
In Today’s Digital Newspaper |
Equities: Global stock markets were mixed overnight. U.S. Dow opened around 200 points lower. In Asia, Japan +0.1%. Hong Kong +1.1%. China +0.9%. India +0.3%. In Europe, at midday, London +0.1%. Paris flat. Frankfurt +0.1%.
On Tuesday, the Dow gained 368.95 points, 1.09%, at 34,086.04. The Nasdaq gained 180.74 points, 1.67%, at 11,584.55. The S&P 500 was up 58.83 points, 1.46%, at 4,076.60. The higher finishes capped off a month of gains for all three indices, led by an 11% rise in the Nasdaq, a 6.2% increase for the S&P 500 while the Dow advanced 2.8%. The January result for the tech-heavy Nasdaq was its best monthly showing since January 2001.
Beans firmer, corn and wheat slightly lower overnight. Soybeans modestly built on Tuesday’s gains, while corn extended yesterday’s losses and wheat pulled back in overnight trade. As of 7:30 a.m. ET, corn futures were trading around 3 cents lower, soybeans were fractionally to 2 cents higher and wheat futures were 1 to 3 cents lower. Front-month crude oil futures were modestly higher and the U.S. dollar index was around 250 points lower.
Attaché slashes Argentine soybean crop estimate. The U.S. ag attaché in Argentina slashed its estimate of the country’s soybean crop to 36 MMT, 9.5 MMT below USDA’s official January forecast. The post said “dry weather and high temperatures have damaged the crop.”
Ukraine official more optimistic on grain crop than others. Ukraine’s grain production may decrease to 49.5 MMT this year from around 51 MMT last year, Interfax news agency quoted deputy economy minister Denys Kudyn as saying. Prior to last year’s invasion by Russia, Ukraine produced a record grain crop of 86 MMT in 2021. Earlier this week, the head of the Ukrainian Agribusiness Club said he expected Ukraine’s grain production to fall to between 35 MMT and 40 MMT this year.
Ag demand: South Korea purchased 117,500 MT of optional origin corn and 80,000 MT of feed wheat – 65,000 MT to expected to be sourced from Australia and 15,000 MT optional origin.
Central banks and institutions, including sovereign-wealth funds, bought about 1,136 metric tons of gold net of sales in 2022, according to a World Gold Council report Tuesday. That’s the largest volume since 1967 and marks the 13th consecutive year of net purchases.
FOMC day: The Federal Reserve this afternoon is widely expected to boost interest rates by 25 basis points, to a target range of 4.5% to 4.75%, slowing increases for the second consecutive meeting. But the focus will be on what comes after that. As usual, comments made by Fed Chair Jerome Powell will be key. Cooler pay gains add to debate on when the Fed might pause rate hikes. Worker pay gains cooled at the end of last year, adding to signs of moderating inflation, leaving the Federal Reserve on course to slow interest rate increases again and increasing the possibility of a pause in rate rises this spring. Compensation gains slowed in the second half of 2022, after touching the highest readings since the series began in 2001. Fed officials have indicated they are watching the employment-cost figures closely for signs that wage inflation may have peaked. The data could bolster the case to pause rate increases this spring — possibly after another anticipated quarter-point increase at their March 21-22 gathering. But CME Fed funds futures are not signaling an expectation for a pause in March — the probability for pause was at 17.1% with another 25-basis-point rise at an 81.8% probability.
A White House meeting is set for 3:15 p.m. ET today between President Joe Biden and Republican House Speaker Kevin McCarthy over increasing the nation’s debt ceiling. McCarthy and his House GOP conservative allies want steep cuts to domestic programs and a trim to defense spending — but not making cuts to two programs to avoid voter blowback: Medicare and Social Security. White House officials insist they will not negotiate with House Republicans on the need for Congress to raise the $31.4 trillion borrowing limit and avoid the first-ever debt default, potentially by this summer. “Show me your budget, I’ll show you mine,” Biden said Monday when asked what his message would be when the two meet Wednesday afternoon at the White House. Bottom line: The first meeting between the new speaker and president is not expected to yield any agreement on how to lift the debt ceiling. Such a solution is expected much closer to the true deadline this summer.
Biden’s proposed budget for the 2024 fiscal year — to be released March 9 — will “show how the president plans to invest in America, continue to lower costs for families, protect and strengthen Social Security and Medicare, and reduce the deficit,” National Economic Council Director Brian Deese and Office of Management and Budget Director Shalanda Young wrote in a memo released Tuesday. Link to memo.
House Majority Leader Steve Scalise (R-La.) said Republicans plan to produce a budget by April. The GOP has said it plans to have a plan that balances within 10 years — something that would require deep cuts if taxes are not raised.
The eurozone’s annual rate of inflation fell for the third-straight month in January as energy prices continued to pull back from recent peaks — a slide that is unlikely to deter the European Central Bank from raising interest rates further this week. The European Union’s statistics agency Wednesday said consumer prices in the eurozone were 8.5% higher in January than a year earlier, a slowdown from the 9.2% rate of inflation recorded in December. Stripping out volatile energy and food prices, however, inflation remains well above the ECB’s 2% target, feeding concerns among policy makers that it could lead to higher pay rises than have been common over recent decades, and further rounds of price rises.
FDA wants to consolidate its food policy and regulation divisions in the wake of last year’s national baby-formula shortage. The agency was criticized for its slow response and other food safety concerns, as supply chain issues and a formula recall panicked parents and caregivers. Abbott Laboratories, which makes Similac and other brands, halted production at its Sturgis, Mich., factory because of product safety concerns. “Today, I am announcing a new, transformative vision for the FDA Human Foods Program,” said Commissioner Robert Califf. “Creating a Human Foods Program under a single leader who reports directly to the Commissioner unifies and elevates the program while removing redundancies, enabling the agency to oversee human food in a more effective and efficient way.” The revamped foods program would absorb the functions of Center for Food Safety and Applied Nutrition and the Office of Food Policy and Response, as well as some of the work of the Office of Regulatory Affairs. The Center for Veterinary Medicine (CVM) would continue as a separate office; “the relevant food safety activities will be closely coordinated” between the CVM director and the deputy commissioner for human foods, said Califf.
Under Califf’s proposal, the deputy commissioner for food “will have decision-making authority over policy, strategy and regulatory program activities within the Human Foods Program, as well as resource allocation and risk prioritization.” An advisory committee of outside experts would look at “challenging and emerging issues in food safety, nutrition and innovative food technologies.”
Principal deputy commissioner Janet Woodcock said an “implementation and change” group of FDA managers already was laying the groundwork to make the reorganization a reality. “We look forward to sharing further details next month and in the future on our progress,” she said.
The deputy commissioner will be named by spring, Califf told the Associated Press. Link to more via the WSJ.
Whole Foods Market is asking suppliers to help it bring down prices. The grocer told suppliers at a recent virtual summit that it wants to lower retail prices in its stores as companies’ own costs start to decline.
USDA withholds releasing the names of everyone who receives farm subsidy payments, hiding the names of a portion of farm subsidy recipients. An advocacy group that publishes the data says that the decision to withhold recipient names obscures how billions of dollars of taxpayer money is spent. “It’s a mystery as to why the USDA began to hide the names of many recipients,” said Scott Faber, senior vice president for government affairs for the Environment Working Group (EWG), which files a Freedom of Information Request every year to obtain information about who receives farm subsidies, where the recipients live and how much they get. That information then goes into a public database that dates back to 1995. The most recent version, containing data from 2020 and 2021, was released Wednesday. Faber said USDA told them the changes occurred because of a software update to its reporting system in 2019, during the Trump administration. USDA has denied the nonprofit’s appeals requesting the names of the obscured individuals.
Millions in California food benefits stolen. California’s EBT cards lack security features common to credit and debit cards, allowing thieves to steal millions of dollars of cash and food benefits allotted to low-income families. Link for details.
A new way to rent ground gains traction… with cash rent bids in Illinois topping $600 per acre. So says an agweb.com item (link).
Meanwhile, CommonGround (formerly Cashrent.com) just did a cash rent auction in Fulton County, Illinois. They said the cash rent auction in Fulton County brought $620 an acre… which is a record for them. The Founder and CEO of CommonGround told Tyne Morgan over the last two and a half years, their average landowner experiences roughly 39.5% increase in ROI, but on land that hasn’t been negotiated in several years, those cash rents are up 60% to 120% when negotiated via a cash rent auction. Tyne’s full television story airs this weekend on U.S. Farm Report.
A Jan. 31 deadline to strike a deal on voluntarily cutting water use of the Colorado River has come and passed amid a historic drought and record low reservoir levels. While a proposal called the “consensus-based modeling alternative,” was jointly submitted by six Western states, California — the largest user of the Colorado River — is not on board. It plans to submit its own plan to protect one of America’s most important natural resources, which supplies water to 40 million people. The federal government might now have to impose cuts that will likely end up in court.
U.S. requests second USMCA dispute panel to probe revised Canada dairy TRQ plan. U.S. Trade Representative (USTR) Katherine Tai announced Tuesday that the U.S. formally requested a second U.S.-Mexico-Canada Agreement (USMCA) dispute panel to probe Canadian dairy tariff-rate quotas (TRQs) after revisions to the quotas following an earlier dispute panel ruling failed to bring Canada into compliance with the pact’s dairy market access provisions.
Canada reacts. Canada’s Minister of International Trade, Export Promotion, Small Business and Economic Development Mary Ng criticized the U.S. decision to seek a second dispute panel. “Canada is disappointed that the United States has requested a dispute settlement panel,” she said. “Canada will continue to defend our supply management system and the market access that Canada and the United States have agreed on. We will stand firm against attempts to renegotiate agreements during the dispute settlement panel process.”
Comments: When USMCA was initially completed, the hope was the new trade agreement would accelerate trade disputes. That has not occurred.
U.S. officials said Russia is not complying with New START, the two countries’ last remaining nuclear-arms control treaty. Russia has suspended weapons inspections and pulled out of consultations, officials from the U.S. State Department said in a report to Congress. The compliance failures heighten concerns that the two powers will be unable to negotiate an extension to New START, which expires in 2026.
EPA says Bristol Bay mines still possible after Pebble blocked. The EPA’s decision on Tuesday barring the Pebble Limited Partnership from dumping mine waste into Alaska’s Bristol Bay watershed doesn’t prohibit all mining for gold, copper, and other minerals in the area of the world’s largest wild salmon fishery, EPA officials said.
House Republicans move ahead with effort to oust Omar from panel. The House is set to vote as early as today on a resolution to remove Ilhan Omar (D-Minn.) from the Foreign Affairs Committee as Speaker McCarthy persuaded at least two Republican holdouts to support the move.
House Republicans are aiming to move a supply chain package in May, Rep. Dusty Johnson (R-S.D.), a co-chair of the Congressional Supply Chain Caucus, said. Johnson said he wants the upcoming package to address trucking challenges, as well as issues in ocean shipping that weren’t addressed in an overhaul enacted during the last Congress. Johnson and Rep. Jim Costa (D-Calif.) last week introduced a bill (HR 471) to streamline licensing for truck drivers and expand parking access.
Backer of bigger plane seats wins House aviation panel post. Rep. Steve Cohen (D-Tenn.) will serve as top Democrat on the House subcommittee that oversees aviation as Congress works on legislation to reauthorize the Federal Aviation Administration.
Speaking of airlines, Delta is switching on free wi-fi for about 80% of its domestic fleet starting today. To access free wi-fi on Delta flights, you’ll need to sign in to your Delta SkyMiles frequent flyer account (but that’s also free). Delta says its Viasat-powered internet will give you “video-streaming capable wi-fi speeds…from takeoff to touchdown.” This isn’t a small investment for Delta: CEO Ed Bastian said the company has spent more than $1 billion on free wi-fi. Currently, JetBlue is the only other large U.S. airline that offers free wi-fi, but American is in trial mode and Hawaii Airlines could launch free wi-fi later this year through SpaceX’s Starlink service.
Moneyball. The upcoming Super Bowl between the Kansas City Chiefs and Philadelphia Eagles is the third-most expensive of all time, with the average ticket price nearing $10,000 and the most expensive seat going for almost $40,000.
Global cases of Covid-19 are at 670,817,645 with 6,833,530 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 102,347,197 with 1,108,512 deaths. The U.S. Center for Disease Control and Prevention said that there have been 668,814,259 doses administered, 268,927,705 have received at least one vaccine, or 81.0% of the U.S. population.
NWS weather: Prolonged and significant ice storm continues across much of the southern Plains and Mid-South... ...Heavy rain and scattered flash floods possible across parts of the Deep South and Southeast on Thursday... ...Bitter cold and dangerous wind chills to enter the northern Plains and Upper Midwest on Thursday before sweeping into the Northeast by Friday.
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