Financial Markets Still at Odds with Fed Remarks, Outlook

Farm bill developments | U.S./Mexico corn trade issue | India rice and wheat subsidies

Policy Updates
Policy Updates
(Farm Journal)

Farm bill developments | U.S./Mexico corn trade issue | India rice and wheat subsidies



In Today’s Digital Newspaper

President Biden and House Speaker Kevin McCarthy (R-Calif.) began face-to-face debt-ceiling discussions at the White House. The meeting came as House Republicans have said they want to cut government spending in exchange for voting to increase the nation’s borrowing limit, but haven’t agreed among themselves on what cuts they want. The White House has insisted that there will be no negotiating over the debt limit and reiterated on Wednesday that Congress should raise it without conditions. McCarthy’s take on the first session: “I think our first meeting was a good meeting. I think, at the end of the day, we can find common ground.”

As expected, the Federal Reserve hiked its policy rate by 25 basis points to 4.50%-4.75% on Wednesday, slowing the rapid tightening campaign that had dented stocks and other assets in 2022. “We’ve [now] raised rates four and a half percentage points, and we’re talking about a couple of more rate hikes to get to that level we think is appropriately restrictive,” Fed Chair Jay Powell declared. “Why do we think that’s probably necessary? We think because inflation is still running very hot.”

The U.S. is expected to send Ukraine longer-range smart bombs. The new smart weapon is expected to be included in the next batch of U.S. military aid for Ukraine, which could be announced as soon as Friday. It has a range of 94 miles — longer than that of any bomb the U.S. has so far provided to Ukraine — and can be fired from rocket-launchers such as the Himars system the U.S. has already supplied.

Russian forces claimed new advances in their effort to encircle the eastern Ukrainian city of Bakhmut, while European leaders arrived in Kyiv to discuss further military aid. The European Union will double the number of Ukrainian troops it trains to 30,000, a senior EU official said.

We have several ag-related policy updates in the Policy, Trade and Energy sections today.

BP will dial back its push into renewable energy. Disappointed in the returns from some of the oil giant’s renewable investments, CEO Bernard Looney plans to pursue a narrower green-energy strategy and place less emphasis on environmental, social and governance goals, to help clarify that those aren’t distracting the company from its ability to deliver profits, the Wall Street Journal reports, citing people familiar with recent discussions. Analysts and some investors say BP’s pledges to shift away from fossil fuels and into renewable energy risk handicapping the company’s performance.

An early look at 2024 House races is out by respected analyst Dave Wasserman of the Cook Political Report with Amy Walter. See Politics & Elections section for details.

The Justice Department found no classified documents during a Wednesday search of President Biden’s beach house.

MARKET FOCUS

Equities today: Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed opening. In Asia, Japan +0.2%. Hong Kong -0.5%. China flat. India +0.4%. In Europe, at midday, London +0.5%. Paris +0.6%. Frankfurt +1.4%.

U.S. equities yesterday: Despite being in negative territory ahead of the Fed meeting conclusion, major indices rose into the closing bell and finished higher. The Dow edged up 6.92 points, 0.02%, at 34,092.96. The Nasdaq gained 231.77 points, 2.00%, at 11,816.32. The S&P 500 ended up 42.61 points, 1.05%, at 4,119.21.

Ag markets today: Soy complex futures traded higher overnight, while wheat favored the upside and corn faded to a mixed tone this morning. As of 7:30 a.m. ET, corn futures were trading fractionally on either side of unchanged, soybeans were 7 to 8 cents higher, SRW wheat futures were around a penny higher, HRW wheat was narrowly mixed and HRS wheat was 2 to 4 cents higher. Front-month crude oil futures were modestly lower, and the U.S. dollar index was around 100 points lower.

Technical viewpoints from Jim Wyckoff:

Biden, McCarthy make ‘no promises’ on debt, will keep talking. House Speaker Kevin McCarthy (R-Calif.) left a White House meeting with President Joe Biden on Wednesday afternoon saying they had a “good conversation” but made “no agreements, no promises” regarding the debt limit. McCarthy said he and Biden left the meeting promising to continue the conversation. McCarthy said he’s hopeful he can strike a deal on raising the debt limit with Biden well before the deadline when the nation would no longer be able to pay its bills. He said the discussion went better than he expected. “I think, at the end of the day, we can find common ground,” McCarthy said as he left the White House.

The Federal Reserve announced Wednesday it would raise its short-term interest rate by a quarter percentage point. It’s the eighth increase since the central bank began its tightening cycle in March and brings the federal funds rate to a range of 4.5% to 4.75%, up from near zero last March. The ratcheting back of hikes comes as price increases ease in the U.S. but are still a concern. “Inflation has eased somewhat but remains elevated,” the Fed said. Fed Chair Jerome Powell hinted that it could halt its campaign after “a couple more rate hikes.” In its statement, the Fed repeated that “ongoing (rate) increases … will be appropriate” to bring down yearly inflation to the Fed’s 2% goal. At a news conference, Powell said inflation “has moderated but remains too high… We still think there’s work to be done there,” he said. “We haven’t made a decision on exactly where” rates will peak.

Powell said the Fed ultimately could stop short of the level officials forecast in December or go beyond it, depending on how rapidly inflation falls. He initially said the central bank would rather err on the side of hiking too much to stamp out high inflation. “I continue to think that it’s very difficult to manage the risk of doing too little,” he said.

Terminal rate ahead. Powell signaled that if inflation follows the course officials expect, the Fed is on track to push the Fed’s key rate to the 5% to 5.25% level and then pause. That would require two more quarter-point hikes — in March and May. “We’re talking about a couple more rate hikes to get to that level that is sufficiently restrictive,” he said.

Powell has said the central bank won’t halt its hiking campaign until it sees clear evidence that wage growth is slowing in service industries like health care, education and restaurants. Price increases in those sectors account for the lion’s share of inflation, he said, and they’re tied mostly to labor costs. Powell has said he’s looking for a better balance of labor demand and supply to ensure wage growth is moderating. Service prices represent more than half of the government inflation basket.

How a WSJ commentary item favors the Fed’s current approach and admits confusion about market reaction. “The employment cost index for the 2022 fourth quarter, released this week, showed compensation up 1%, and 5.1% over the preceding 12 months. Personal-consumption expenditure inflation is still 5% on an annual basis while the Fed’s target is 2%. That sounds like more work-to-do to us,” the Wall Street Journal says in a commentary item (link). “But markets must believe that Mr. Powell doesn’t mean what he says, or else that inflation is going to fall so fast and so clearly that the Fed will stop at one more 25-point increase in March. That would take the fed funds interest rate to 5%, from 4.75% after Wednesday. This would explain the stock and bond rallies on Wednesday. The yield on the 2-year Treasury note fell eight basis points to 4.13%, while the 10-year fell nearly nine points to 3.42%. This is consistent with the generally looser financial conditions that have prevailed since the Fed’s last meeting in December when it raised fed funds by 50 basis points… The Fed is right in our view not to declare premature victory. The worst result would be stop-and-start policy that leaves inflation well above the Fed’s target. Markets can make their bets, but the central bank’s vital job is correcting its historic inflation mistake.”

BOE, ECB raises interest rates another 50 basis points. The Bank of England (BOE) raised interest rates another 50 basis points — its 10th hike — pushing the benchmark lending rate to 4%. But BOE dropped its pledge to keep increasing rates “forcefully” if needed and said inflation had probably peaked. BOE said its string of interest rate hikes since December 2021 were likely to have an increasing impact on the economy. That should help to bring inflation down to about 4% by the end of this year, signaling the series of rate hikes might be coming to a completion.

The European Central Bank also raised rates another 50 basis points this morning.

Multinationals drawn to Mexico. Companies from around the world are moving production and equipment to Mexico as they seek a manufacturing hub closer to the U.S., part of a broader shift in global trade, the WSJ reports (link). Some companies are relocating from Asia, while others are investing millions of dollars to raise output of goods that are exported tariff-free to the U.S. Economists and executives say supply-chain disruptions, prolonged Covid-related shutdowns in China, soaring shipping rates and geopolitical uncertainty caused by Russia’s invasion of Ukraine are fueling the nearshoring trend.

Market perspectives:

• Outside markets: The U.S. dollar index has weakened, moving below the 101 mark at times during overnight action for the first time since April. The yield on the 10-year U.S. Treasury note has fallen, trading around 3.37%, with a mostly lower tone in global government bond yields. Crude oil futures were lower, with U.S. crude around $76.20 per barrel and Brent around $82.50 per barrel. Gold was registering strong gains, trading around $1,969 per troy ounce, with advances in silver with futures trading around $24.50 per troy ounce.

• Global potash prices, down 25% in the fourth quarter, could slide further in the first half as farmers curb consumption and inventories build, signaling a supply-chain refill, Bloomberg Intelligence says.

• Jet-fuel prices are climbing, propelled by diminished supplies and swelling demand, and they threaten to push airfares higher. Link for details.

• Freight rail shipping trends are bumping up hard against local community concerns in Chicago. Norfolk Southern faces big hurdles there in trying to expand a freight yard that has become a big part of its U.S. network, the Wall Street Journal writes (link), in a clash that highlights the significance of the region as a rail hub and the challenges of running rail operations through a dense urban area. Opposition has developed as Norfolk Southern has sought to move more containers through one of the city’s poorest neighborhoods under a multiyear, multimillion-dollar project. Norfolk Southern says it needs more space to handle longer trains and more volume. Experts say the project is part of a bigger trend that has seen railroads depend more on containers moving through intermodal terminals like the one in Chicago. Shifting freight volumes have increasingly put logistics operations alongside residential areas, however, and triggered local disputes.

• Ag trade: Algeria purchased 30,000 MT of corn expected to be sourced from Argentina. South Korea bought 60,000 MT of feed wheat that can be sourced from the U.S., Australia, Romania or Bulgaria. Jordan tendered to buy up to 120,000 MT of optional origin milling wheat.

• NWS weather outlook: Significant ice storm across the southern Plains and Mid-South to gradually end today... ...Bitter cold and dangerous wind chills to enter the northern Plains and Upper Midwest before sweeping into the Northeast by Friday... ...Periods of heavy snow return to the Sierra and Cascades late this week into the weekend.

Items in Pro Farmer’s First Thing Today include:

• Varied grain price tone overnight
• StoneX raises Brazilian soybean crop estimate
• Slow developing cash cattle market
• Cash hog market still searching for a low

RUSSIA/UKRAINE

— Summary: A major new Russian offensive on Ukraine may already have begun. Hundreds of thousands of troops moved into Ukraine and artillery barrages increased. Moscow is estimated to now have 320,000 soldiers in the country, more than double its initial force, and fighting is fierce around Bakhmut in the east. Analysts expected a new push, perhaps the biggest to date. “I think it has started,” Ukrainian President Volodymyr Zelenskyy said. This month sees the one-year anniversary (Feb. 24) of Russia’s invasion, and the Kremlin wants a symbolic breakthrough. Its new top general, Valery Gerasimov, is trying to use overwhelming manpower to achieve it.

  • A Ukrainian billionaire was arrested in a corruption purge by Kyiv. The homes of the head of the tax authority and a former minister were also raided, following last week’s resignations of several senior officials. President Volodymyr Zelenskyy, elected on an anti-corruption platform, meets European Union leaders on Friday. Ukraine is keen to join the EU but its high level of corruption, second only to Russia’s among European countries, is an obstacle.
  • “We don’t see any signs” that Vladimir Putin is “preparing for peace,” NATO Secretary General Jens Stoltenberg said on a trip to South Korea this week. “We see the opposite.” Russia is mobilizing perhaps another 200,000 soldiers, “actively acquiring new weapons, more ammunition,” and Putin hasn’t backed off his core goal “to control Ukraine,” he added. “As long as this is the case, we need to be prepared for the long haul.”

POLICY UPDATE

— Stabenow makes clear she wants no cuts in big funding boost already in place for climate programs. Senate Agriculture Committee Chair Debbie Stabenow (D-Mich.) put done a marker insisting she will not agree to any cuts to the funding she got in the Inflation Reduction Act for climate-related farming practices. “We’ll negotiate everything, but I’m not interested in any way in rolling back what farmers want on conservation,” she said after the committee’s first farm bill hearing of the year on Wednesday. “It’s one of those situations that’s really a win-win, because it’s not only about addressing the climate crisis, but farmers want more carbon in the soil, because it’s healthier soil. Everybody else agrees because they don’t want it in the atmosphere.”

— Stepped-up basis will get focus with rural tilt on House Ways and Means panel. Tax policy geared toward farmers and others that transfer land and other assets to heirs will get a renewed focus at the Ways and Means Committee this year, a marker of the panel’s more rural tilt while still promoting measures that favor business. Chairman Jason Smith (R-Mo.) has cast himself as a champion for working families, small businesses, and farmers, “not the people on K Street.” With the retirement of former Rep. Kevin Brady (R-Texas), whose district included Houston suburbs, and the exit of former Rep. Tom Rice (R-S.C.), whose district included Myrtle Beach, and the addition of members like Reps. Randy Feenstra (R-Iowa) and Claudia Tenney (R-N.Y.), the panel now has greater rural representation.

The step-up in basis tax rule reduces the capital gains tax on inherited property. The Joint Committee on Taxation has noted that the failure to collect these taxes costs $40 billion per year, citing a 2021 Congressional Research Service report. In Democratic proposals to eliminate the provision, lawmakers have included exemptions of up to $1 million and for farmers.

Rep. Bill Pascrell (D-N.J.), who has introduced legislation on the issue, told Bloomberg Tax that “people are getting away with murder” on the issue. There’s room for compromise, though, Pascrell said. “We’ve made some considerations for farmers, small farmers, but there’s no question in my mind that inheritance has never been taxed many times,” Pascrell said. “Anybody who believes that your inheritance should not be taxed, I’ll listen to, but that, to me, is probably in the top five of what needs to be reformed.”

With Republicans now in control of the House, Feenstra said he wants to introduce legislation shielding the stepped-up basis and like-kind exchanges. The upcoming farm bill will be the first opportunity to add in those types of policies, as well as extending or renewing tax measures from the 2017 tax law that expired at the end of 2022, Feenstra said. “There’s great opportunity for that Ways and Means can work with the Agriculture Committee,” Feenstra said, “and make sure whether it be in conservation, an energy title, or even a research and development title.”

Tenney said she hopes to make other tax measures benefiting farmers permanent, pointing to the 2017 tax law’s 20% pass-through deduction for certain businesses, which she said benefits farms in her district.

Feenstra also wants to see full bonus depreciation, which allowed companies to immediately expense capital expenditures, and which starts to phase out this year, make a return. A research and development tax deduction that expired last year could also be included in the farm bill, Feenstra said.

Bloomberg interviews Rep. Frank Lucas (R-Okla.) who returned as a member on House Ag Committee. Lucas, if you recall, was House Ag Chairman on the 2014 Farm Bill, which saw some major challenges. Some of the items he told Bloomberg in an interview:

  • What advice do you have for Chairman Thompson, who’s coming into a divided Congress that could face some similar challenges? “GT is in a really strong position. He has the experience, he has the temperament for the role, because you’re pulling lots of different factions and perspectives. One of the advantages he has that I did not have: leadership in the House—and I want to say, majority and minority leadership—this time they understand how important the farm bill process is and why that safety net, both for production and consumption, can’t be allowed to fall apart, to expire.”
  • The Freedom Caucus already signaled it might use the farm bill for leverage. Are you expecting that to cause delays? “Bills that go through regular order typically never have the support of those on the hard left, or the hard right. It is a coalition of the middle that passes the Farm Bill. So bear that in mind. It’s just the way it works. Second point, which is unique to this farm bill: There’s not going to be that many pieces of legislation — big pieces — that pass this time. If you listen to the whispers in the hallway, there’s already discussion and acknowledgment that the farm bill is a must-do. There’s also a number of other committees trying to figure out how they can attach to the farm bill in some final conference report. So if GT writes the must-pass bill, and everybody wants to be on board, sometimes the mob, the hoard, the herd, can create momentum by just all pushing together for their individual vested interests.”
  • So everyone has a vested interest in getting it done? “There’s going to be a train going on the tracks and everybody wants to get on, and from my perspective, why shouldn’t it be the farm bill? It could be the train everybody wants to catch a ride on. One of the other challenges GT has is time, because of the gyrations the Republican Conference went through [to elect Speaker Kevin McCarthy]. We’re basically starting 2023 two months behind. The committee has to hold a variety of hearings to verify what’s worked and determine what didn’t work to achieve consensus both here in town and around the country. It’s a laborious process. We may wind up with an extension, short-term, intermediate, I don’t know.”
  • You’ve said some lawmakers in Congress don’t understand the importance of a farm safety net because they don’t realize where their dinner comes from. How are those conversations going now? “We’re helped this time because during the Covid process—when packing plants shut down, for instance, and suddenly the hamburger and the pork chops disappeared out of the grocery stores and out of the big chain food stores—they got a shock, a real shock. And while Congress is like America in general — maybe we don’t have the longest memory that we should — it’s still fresh enough. It will help.”
  • The last Congress saw introduction of some bills to address competition in cattle markets. Should we expect movement on those? “Still a very important issue out in the countryside. This is one of those things, in my opinion, do not expect that to be addressed in the farm bill. Because there is an ongoing Department of Justice investigation, started in the Trump administration, continuing in the Biden administration, looking at whether the anti-monopoly codes, the Packers and Stockyards Act — all the various federal laws that deal with these issues — if they’re being violated.”
  • Any chance of a livestock title being added to the farm bill? “No, I don’t see anything dramatic. Nobody’s going to move until the Justice reports because we can’t be certain of what needs to be addressed, because they have access to information, we don’t have access to.”

— Market development funding was a topic discussed at Wednesday’s farm bill hearing in the Senate Ag Committee. Even as studies show export promotion funding returns nearly $24 in increased trade volumes per dollar spent, Sen. Amy Klobuchar (D-Minn.) said the U.S. still trails competitors like the EU. “According to your testimony, the EU’s export program for wine alone was greater than the entire budget of all of USDA’s market development programs,” she said. “I think that should concern our colleagues when we look at a balance as much as we enjoy pairing up with the EU and drinking their wine.” Taylor explained that while MAP is funded at $200 million annually, the program receives about $300 million in funding requests, with similar patterns seen for the companion Foreign Market Development (FMD) program. “They are highly prescribed funds, but also highly leveraged,” . USDA Undersecretary for Trade and Foreign Agricultural Affairs Alexis Taylor said. “As you point out, the impact and return we see we [and] receive on [them] is pretty impressive.”

PERSONNEL

— President Biden saluted outgoing White House chief of staff Ron Klain and welcomed his successor, Jeff Zients, in the East Room yesterday. “This is the best job I’ve ever had,” said Klain. Klain has worked for the president off and on for 36 years. Klain’s last day is Feb. 8, the day after the State of the Union.

— U.S. Labor Secretary Marty Walsh has been approached about running the NHL Players Association and is in consideration for the gig, in what could be the second major shakeup to the Biden administration in recent weeks. Link for more via Politico.

CHINA UPDATE

— The U.S. is beginning to detain imports of aluminum products suspected of being made through forced labor, particularly from China’s Xinjiang region, according to one of the world’s biggest shipping firms. U.S. Customs and Border Protection has begun issuing “detention notices” for such products, AP Moller-Maersk A/S said Tuesday on its website, adding that the action will most likely target aluminum used in automotive parts. When asked about the issue at a regular press briefing in Beijing, China’s Foreign Ministry spokeswoman Mao Ning said the U.S. was politicizing trade issues and destabilizing supply chains “with the excuse of a non-existing genocide in Xinjiang.” China would take measures to defend the legitimate and lawful rights and interests of Chinese companies, she added.

— American deal making in China has dried up. Only about 0.4% of global private equity investment from the U.S. went into China last year, according to the American Investment Council, down from 1.2% in 2017. About 2.3% of U.S. venture capital investments were made in China last year, down from 10% in 2017. The New York Times says dealmakers say that trend is likely to persist as long as tensions with China do.

TRADE POLICY

— Biden administration officials pressed at farm bill hearing on Mexico corn trade issue. “When it comes to agricultural trade, the concern I hear most from Iowans is access to Mexico’s corn market,” said Sen. Chuck Grassley (R-Iowa). “With over 90% of the corn acreage in the United States being planted to biotech seeds and Mexico being the number one purchaser of U.S. corn, I’m concerned that this decree is not being met with urgency that it deserves,” he said, referring to Mexican President Andrés Manuel López Obrador’s decree that would phase out imports of GM corn in 2024 — extended to 2025 under a compromise López Obrador’s administration recently offered, but which the U.S. rejected.

Grassley recalled his role as former chair of the Senate Finance Committee, and support of USMCA. He noted the U.S. Trade Representative’s (USTR) move Tuesday (Jan. 31) to seek a second dispute panel aimed at seeing Canada meet dairy market access commitments it made under the pact and asked why the Biden administration has yet to do the same relative to Mexico’s policy on GM corn imports. USDA Undersecretary for Trade and Foreign Agricultural Affairs Alexis Taylor responded: “We are engaging with urgency on this issue. We certainly appreciate the potential impact that the proposed decree could have on our corn growers here in the United States, but much broader than that, fundamentally our trading system globally, but also within the USMCA [which] is built upon science-based policies.” She stressed that the U.S. would hold Mexico to its commitments under USMCA and would work closely with the Senate Ag panel on the issue. Grassley asked Taylor whether she had a timeline on negotiations. “We have been very clear that the USMCA gives us a process to go down if we cannot find resolution on this issue, and that we reserve all of those rights,” Taylor said.

— India rice, wheat subsidies. During a Senate Ag panel yesterday on the new farm bill, ranking member John Boozman (R-Ark.) pressed USDA Undersecretary for Trade and Foreign Agricultural Affairs Alexis Taylor on how the Biden administration and Congress can hold India accountable for violating World Trade Organization (WTO) subsidy rules for rice and wheat. “I have been engaging as with my team, since I’ve been at USDA on this topic, as I committed to you, I would,” Taylor said. “While we do have grave concerns, and it is one that we are looking at multiple approaches to try and address within, again, the multilateral forum, to try and bring some resolution and certainty to our rice and wheat producers who are seeing impact from the subsidies.”

Perspective: What Boozman nor Taylor commented on was the historical pushback by the State Department and others in the Biden and Trump administration against pressing India too hard on this issue, due to geopolitical concerns.

ENERGY & CLIMATE CHANGE

— Biofuels and trade surfaced during a farm bill hearing yesterday by the Senate Ag Committee. Sen. Joni Ernst (R-Iowa) asked if USDA was focusing on ways to boost exports of lower-carbon fuels, including ethanol, to trade partners like India via the Farm Bill’s Market Access Program (MAP), which helps promote exports of U.S. agricultural products and commodities. “I think there are many countries where there are a lot of potential, but also large challenges,” USDA Undersecretary for Trade and Foreign Agricultural Affairs Alexis Taylor said. “I think we are open to working with industry partners, the U.S. Grains Council, to make sure that we are targeting those priority markets.”

LIVESTOCK, FOOD & BEVERAGE INDUSTRY

— With egg prices surging in the US, some Americans are trying to lower their grocery bills by buying them south of the border. The only problem: It’s illegal to bring them back into the country, and now seizures of eggs at some U.S./Mexico border crossings have surged more than 300%.

— Conclusion of OMB review of USDA proposed rule on Product of USA labeling opens door for announcement. The review by the Office of Management and Budget (OMB) of USDA’s proposed rule on voluntary Product of USA labeling has been completed, setting the stage for USDA to announce the measure.

USDA received three petitions requesting changes in the Product of USA labeling effort. USDA’s Food Safety and Inspection Service (FSIS) said it examined the current rules and two alternatives that were proposed — amend policies to state FSIS-regulated products may be labeled as Product of USA only if significant ingredients are of domestic origin and; to amend the policy to provide that any FSIS regulated product labeled as Made in the USA, Product of the USA, USA Beef or in any other manner that suggests that the origin is the United States, be derived from animals that have been born, raised, and slaughtered in the United States.

USDA acknowledged that there will be costs associated with entities voluntarily changing their labels because of “any revised Product of USA labeling claim definition.” But the agency argued the proposed rule is expected to benefit both consumers and producers by providing more information on what Product of USA means.

USDA forwarded its plan to OMB Dec. 5, 2022, and there was one meeting held on Jan. 31 with representatives of the North American Meat Institute (NAMI). They argued the proposed rule, if it puts in place a born, raised and slaughtered definition for the voluntary labeling effort, would be counter to the Federal Meat Inspection Act (FMIA), the very law that USDA cited as being the legal basis for the proposed rule. NAMI also criticized what they say was a shift at USDA to not engage with various stakeholders on the issue, including those from Canada and Mexico, given the number of animals that come in from Mexico and Canada that are eventually proposed into pork and beef in the U.S.

USDA did embark on a consumer survey process in developing the proposed rule. In documents provided to OMB, NAMI said USDA should go back one step in the process and issue an advance notice of proposed rulemaking as opposed to a proposed rule as NAMI argued that the processing of animals into pork and beef marks a substantial transformation from the animal that walked in the door of the facility.

Now what? It is unclear when USDA will announce the proposed rule. USDA Secretary Tom Vilsack frequently uses industry speeches to unveil new programs or announcements.

HEALTH UPDATE

Summary:

  • Global Covid-19 cases at 671,100,246with 6,836,082 deaths.
  • U.S. case count is at 102,463,110 with 1,109,687 deaths.
  • Johns Hopkins University Coronavirus Resource Center says 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.

— House Republicans began hearings focused on the origins of the Covid-19 pandemic and the federal government response. The hearings on Wednesday, by the House Oversight and Accountability Committee and an Energy and Commerce subcommittee, were the first in what is expected to be a series by Republican lawmakers who had been airing concerns about the Biden administration’s handling of the public-health crisis,

— Drugmakers raised list prices of nearly 1,000 prescription medicines by an average of 5.6% at the start of this year — restrained increases as the industry faces federal efforts to lower drug costs.

POLITICS & ELECTIONS

— An early look at 2024 House races. Dave Wasserman is House editor for the Cook Political Report with Amy Walter. His initial look at 2024 House races is summed up as follows: “With 18 Republicans sitting in districts carried by President Biden in 2020 and just five Democrats sitting in districts carried by Donald Trump, there are more than enough vulnerable GOP seats on the table to keep the House in play for Democrats.” He adds: “Of course, a true debt limit catastrophe could lead to a greater backlash against Republicans.”

CONGRESS

— Mike Lee, Rick Scott lose key committee seats; Scott blames McConnell. Republican Sens. Mike Lee of Utah and Rick Scott of Florida were removed from the Senate Commerce Committee, as the Senate restructures around its one-seat Democrat majority. Scott told Fox News Digital he blames Senate Minority Leader Mitch McConnell (R-Ky.) for the removal.

OTHER ITEMS OF NOTE

— The Justice Department found no classified documents during a search of President Biden’s beach house in Rehoboth, Del., on Wednesday, Biden’s lawyer said, but took some materials and handwritten notes.

— Kenya is asking the U.S. to pay for the expansion of a joint counterterrorism base, raising concerns that the country could turn to China if the Americans balk, according to U.S. officials.

— $8: The Biden administration’s proposed limit for late fees on credit cards. The rule put forward by the Consumer Financial Protection Bureau aims to lower penalties from as much as $41 for a missed payment.

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 | Student loan forgiveness | Russia/Ukraine war, lessons learned | Election predictions: Split-ticket | Congress to-do list | SCOTUS on WOTUS | SCOTUS on Prop 12 | New farm bill primer | China outlook | Omnibus spending package |