FOMC Day: No Rate Cut Expected, but Signal Likely of One Coming

News/Markets/Policy Updates: July 31, 2024

MARKET FOCUS
· Background on key FOMC issues ahead of today’s announcements
· Dem Senators urge Fed to cut rates, warn delay would yield to political pressure
· Starbucks earnings for fiscal third quarter of 2024 reveal mixed results
· Meta reaches $1.4 billion settlement with Texas over privacy
· Boeing hires Kelly Ortberg as next CEO
· Bank of Japan makes significant monetary policy adjustments
· Ag markets today
· USDA daily sale: 104,572 MT corn to unknown destinations during MY 2024-2025
· Ag trade update
· NWS outlook
· Pro Farmer First Thing Today items

CONGRESS
· Senate tax bill faces contentious vote

ISRAEL/HAMAS CONFLICT
· Israeli airstrike in Beirut suburb Israeli kills ‘most senior’ Hezbollah military commander
· Hamas’ top political leader, Ismail Haniyeh, dead after targeted raid in Iran today

RUSSIA & UKRAINE
· UGA cuts Ukraine’s 2024 grain and oilseeds crop forecast
· Strong start to 2024-25 for Ukraine’s grain exports

CHINA
· Sinograin to increase domestic wheat storage
· China to issue sliding tariff rate cotton import quotas to non-state firms
· China’s manufacturing sector extends slump in July
· U.S. says start of new China tariffs will be delayed by at least two weeks

TRADE POLICY
· WTO: merchandise trade growth to exceed long-term avg. TY, accelerate into 2025

ENERGY & CLIMATE CHANGE
· Biden briefing today on implementation of Inflation Reduction Act (IRA)
· Vilsack press call to announce next steps in USDA’s efforts to implement IRA
· Lawmakers urge Yellen to limit biofuel tax credit to domestic producers
· Wind and solar generated more electricity than fossil fuels in EU first half this year

LIVESTOCK, NUTRITION & FOOD INDUSTRY
· USDA: no need for mandatory testing for HPAI in dairy cattle
· Expanded recall of Boar’s Head meat linked with listeria outbreak

POLITICS & ELECTIONS
· Updates on the presidential elections
· Nate Silver’s election forecast
· House races update from Sabato’s Crystal Ball
· Ongoing riots in Venezuela response to controversial presidential election results
· Kari Lake secures Republican Senate primary win in Arizona

OTHER ITEMS OF NOTE
· Univ. of Arizona joins STARS College Network to boost rural student enrollment
· Rick Gibson, prominent figure in crop insurance industry, passed away on Monday, 88

— Equities today: Asian and European stock indexes were mostly higher overnight. U.S. Dow opened around 50 points higher. Nasdaq is currently up around 400 points. In Asia, Japan +1.5%. Hong Kong +2%. China +2.1%. India +0.4%. In Europe, at midday, London +1.4%. Paris +1.4%. Frankfurt +0.4%.

U.S. equities yesterday: U.S. equities finished with pressure on tech shares while the Dow moved higher. The Dow ended up 203.40 points, 0.50%, at 40,743.33. The Nasdaq fell 222.78 points, 1.28%, at 17,147.42. The S&P 500 declined 27.10 points, 0.50%, at 5,436.44.

— Starbucks recently reported its earnings for the fiscal third quarter of 2024, revealing mixed results that met some expectations while falling short in other areas. Net Income of $1.05 billion, was down from $1.14 billion in the same quarter last year. Earnings Per Share (EPS) at 93 cents met analysts’ expectations. Revenue of $9.11 billion, fell short of the expected $9.24 billion. Starbucks opened 526 net new stores during the quarter. North America segment revenue grew by 1% to $6.8 billion, primarily due to new store openings and improvements in the licensed store sector. Despite the mixed results, Starbucks’ shares rose by over 2% in after-hours trading, reflecting some investor confidence in the company’s strategic initiatives and cost management efforts. The company reaffirmed its full-year 2024 guidance, indicating a cautious but optimistic outlook for the remainder of the fiscal year. Starbucks continues to face challenges both in the U.S. and international markets, with significant competition in China from local coffee shops. Consumers have noted frustration with high prices, leading to a decline in transactions as customers reach their limit with high-priced beverages.

— Meta reaches a $1.4 billion settlement with Texas over privacy violations. The agreement by Facebook’s parent company ends a fight over whether the tech giant ran afoul of state law by automatically tagging users’ faces on its site. Yesterday’s settlement is the largest by a state over privacy violations, according to Ken Paxton, Texas’s attorney general.

— Boeing hires Kelly Ortberg as next CEO. Boeing has appointed Robert K. “Kelly” Ortberg as its new President and Chief Executive Officer, effective Aug. 8, 2024. Ortberg, a seasoned aerospace executive, succeeds Dave Calhoun, who announced his intention to retire earlier this year. Ortberg is well-known in the aerospace industry, having previously served as the CEO of Rockwell Collins, a major supplier to Boeing, which later became Collins Aerospace. Ortberg steps into his new role at a critical time for Boeing. The company has faced significant challenges, including safety concerns and financial losses. Recently, a panel detached from a 737 Max plane during an Alaska Airlines flight, reigniting scrutiny over Boeing’s safety standards. Additionally, Boeing reported a core operating loss of $1.4 billion in the second quarter of 2024, more than triple the loss from the previous year.

— Oil prices were lower Tuesday, falling to seven-week lows as investors worried about demand from China. Chinese leaders have vowed to step up support for the economy, but investors expect such measures will be limited since the Third Plenum policy meeting largely reiterated existing goals. WTI traded down $1.08, -1.4% to close at $74.73. Brent traded down $1.15, -1.4%, to close at $78.63. (Oil prices are higher today after a top Hamas leader was assassinated in Iran.)

— Ag markets today: Soybeans posted corrective gains during the overnight session, while corn and wheat remained near their recent lows. As of 7:30 a.m. ET, corn futures were trading fractionally higher, soybeans were mostly 9 cents higher and wheat futures were fractionally to 2 cents lower. The U.S. dollar index was nearly 500 points lower, and front-month crude oil futures were around $2.50 higher.

Expected slow start to cash cattle negotiations. After packers raised cash cattle bids and purchased a relatively large amount of cattle last week, expectations were this week’s trade would be pushed deep into the week. That’s indeed the case, as bids and asking prices haven’t surfaced. With showlists higher in Kansas, Nebraska and Colorado, most cash sources expect steady/weaker cash prices.

Cash hog index marks new seasonal top. The CME lean hog index is up another 30 cents to $92.59 as of July 29, eclipsing the mid-May high. Instead of what appeared at the time to be an earlier-than-normal seasonal peak, the cash index will now post a later-than-typical top. August lean hog futures finished Tuesday at a $1.39 discount to the cash index, suggesting traders sense a seasonal top will be posted soon.

— Agriculture markets yesterday:

• Corn: December corn futures closed down 7 1/4 cents at $4.05 and near the session low.

• Soy complex: November soybeans fell 18 1/4 cents to $10.21 1/4, marking a fresh 3 1/2-year low close. December soymeal closed $5.50 lower at $318.00, near the session low. September soyoil showed relative strength, rising 13 points to 42.71 cents and forging a high-range close.

• Wheat: December SRW futures sunk 6 1/4 cents to $5.49 and settled near mid-range. December HRW futures fell 3 cents to $5.66 1/4 and closed nearer session highs. September HRS futures fell 7 cents to $5.84 1/2.

• Cotton: December cotton rose 34 points to 69.55 cents, a near mid-range close.

• Cattle: October live cattle futures firmed 65 cents to $187.45 while nearby August futures rallied 72.5 cents to $187.70. September feeder cattle futures rose 87.5 cents to $256.95.

• Hogs: October lean hogs fell 5 cents at $74.775, near the mid-point of the day’s range.

— Of note:

· Warren, Hickenlooper, and Whitehouse urge Fed to cut rates, warn delay would yield to political pressure. Sen. Elizabeth Warren (D-Mass.), along with Sens. John Hickenlooper (D-Colo.) and Sheldon Whitehouse (R.I.), urged the Federal Reserve to cut interest rates, arguing that delaying such action would succumb to political pressure from Republicans. In a letter to Fed Chair Jay Powell, the senators emphasized the importance of following economic data, citing decreases in the Personal Consumption Expenditures index and concerns about rising unemployment and slowing wage growth. They warned that not cutting rates would suggest the Fed is yielding to political bullying and neglecting its mandate to promote maximum employment and stable prices. Despite market expectations for a rate cut in September, some Republicans, including Donald Trump, believe cutting rates before the election would be politically motivated. Fed officials maintain that their decisions are based on economic data, not politics.

· “We believe Powell will wait until Jackson Hole end August to deliver the explicit September cut signal,” Evercore ISI’s Krishna Guha wrote in a research note. “The Fed leadership is proceeding methodically to build the case for a cut and internal consensus as to the game plan for subsequent moves.”

· $120 billion: The total global losses in the first half of 2024 from catastrophic flooding, extreme storms and two earthquakes, according to estimates from Munich Reinsurance. These losses were lower than the amount from 2023.

· “What I saw made me ashamed. As a career law enforcement officer and a 25-year-veteran with the Secret Service, I cannot defend why that roof was not better secured.” — Acting Secret Service Director Ronald Rowe Jr. speaking to U.S. senators about the attempted assassination of former President Donald Trump at a rally in Butler, Pennsylvania.

· “America doesn’t understand that with this blow, they are turning the biggest supporter of the U.S. into its largest detractor.” — A Huawei executive speaking to the company’s founder Ren Zhengfei. (U.S. attempts to weaken Chinese telecommunications giant Huawei have only made it stronger.)

— Expectations for today’s FOMC announcements. The Federal Open Market Committee (FOMC) will conclude its meeting this afternoon at 2 p.m. ET. Here are key expectations and considerations:

Interest rate decision: Holding rates steady. The consensus among economists and market analysts is that the Federal Reserve will keep interest rates unchanged at their current range of 5.25%-5.50%. This decision is influenced by the recent cooling of inflation and the need for more economic data to justify any rate cuts.

Economic indicators and data
• Inflation and employment: The Fed’s decision will be heavily influenced by recent inflation data and labor market conditions. June’s inflation figures showed a moderation, aligning with expectations. The upcoming nonfarm payrolls report, expected to show a steady unemployment rate and job additions, will also be crucial.
• Dual mandate: The Fed continues to balance its dual mandate of maximum employment and price stability. While inflation is cooling, the labor market’s strength remains a focal point.

September rate cut: There is growing confidence that the Fed may signal a rate cut in September if economic conditions continue to show positive trends. Market expectations suggest a high probability of a rate cut in September, with some analysts predicting multiple cuts by the end of the year.

Current state of the Fed’s balance sheet. As of mid-July 2024, the Federal Reserve’s balance sheet stands at approximately $7.2 trillion. This figure reflects the cumulative impact of various monetary policy actions, including large-scale asset purchases (quantitative easing) initiated during economic crises such as the 2008 financial crisis and the Covid-19 pandemic. These actions have significantly increased the Fed’s holdings of securities like mortgage-backed securities (MBS) and U.S. Treasuries.

In recent years, the Fed has been engaged in quantitative tightening (QT), a process aimed at reducing the size of its balance sheet by allowing securities to mature without reinvestment. This process is intended to gradually withdraw liquidity from the financial system, counteracting the expansive effects of earlier quantitative easing measures. As of July 2024, the Fed continues to monitor liquidity conditions closely, ensuring that the QT process does not unduly tighten financial conditions.

Balance sheet management. While the interest rate decision will take center stage, the Fed’s balance sheet management will also be an important topic. Here are key points to consider:
• Continuation of QT: The Fed is likely to continue its current QT policies, allowing its balance sheet to shrink gradually. This approach aims to balance the need for liquidity with the goal of normalizing monetary policy.
• Monitoring liquidity: The Fed will keep a close eye on liquidity conditions. There is a particular focus on the reverse repurchase agreement (RRP) facility, which has seen stable balances around $400 billion. This indicates excess liquidity in the system, which the Fed aims to manage carefully to avoid market disruptions.
• Potential adjustments: While no immediate changes to the QT process are expected, the Fed may signal its readiness to adjust the pace of balance sheet reduction if economic conditions warrant it. This flexibility ensures that the Fed can respond to any unexpected changes in financial stability or economic growth.

Bottom line: Setting the stage: The July meeting is expected to be used to prepare the markets for a potential rate cut in September. This might involve subtle changes in the language of the FOMC statement to emphasize the importance of achieving the 2% inflation target and monitoring economic uncertainties.

Market focus: Investors are closely watching for any hints from Fed Chair Jerome Powell regarding future rate cuts. The stock market has shown sensitivity to Powell’s comments, with expectations of a September cut already priced in by many traders.

Economic outlook: The Fed’s projections and statements will be scrutinized for insights into the future economic outlook, including growth, unemployment, and inflation expectations.

Of note: Powell is key. He will probably say the Fed is seeing some easing of the tight labor conditions and remain focused on that and getting inflation to their 2% goal. They will say they still need to see more evidence that inflation is sustainably headed toward their goal with progress being made on that front. Many analysts expect Powell to repeat his mantra: We know that reducing policy restraint too soon or too much could result in a reversal of the progress that we’ve seen on inflation. At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment.

— The Bank of Japan (BOJ) made significant monetary policy adjustments:

· Rate increase: The BOJ raised its key interest rate to 0.25%, up from the previous range of 0% to 0.1%.
· Bond purchases reduction: The BOJ plans to cut its monthly purchases of government bonds from 6 trillion yen ($39 billion) to half that amount by the first quarter of 2026. The decision was made with a 7-2 vote.
· Yen strengthening: Following the announcement, the yen strengthened. BOJ Governor Kazuo Ueda noted this as a factor in their decision-making, which is unusual since the BOJ typically does not consider exchange rates in its monetary policy decisions.
· Policy context: The BOJ ended its negative-interest-rate policy in March. Ueda mentioned that the BOJ would continue raising rates if economic and price data align with their projections. He noted that real interest rates are still negative and that the current rate rise does not strongly impact the economy.
· Economic impacts: A weak yen has been a challenge for the Japanese economy, prompting the government to spend $36 billion in July to support the currency. Narrowing the interest rate gap between Japan and the U.S. could attract investment back to Japan, potentially boosting the economy further.

Bottom line: These changes mark a shift in BOJ’s approach, with potential long-term implications for Japan’s economic stability and growth.

(Wall Street Journal )

Market perspectives:

— Outside markets: The U.S. dollar index was weaker, with the euro and British pound firmer against the U.S. currency. The yield on the 10-year U.S. Treasury note was weaker, trading around 4.12%, with a mostly lower tone in global government bond yields. Crude was sharply higher, with U.S. crude around $77.35 per barrel and Brent around $80.45 per barrel. Gold and silver were registering gains, with gold around $2,463 per troy ounce and silver around $28.85 per troy ounce.

— USDA daily sale: 104,572 MT corn to unknown destinations during MY 2024-2025.

— Ag trade update: Taiwan purchased 65,000 MT of Brazilian corn.

— NWS outlook: Dangerous heatwave expands from the Plains/Mississippi Valley into the Southeast as another heatwave develops over portions of the West... ...Severe weather and flash flooding expected for the Northern/Central Plains and Midwest Wednesday into Thursday... ...Another threat for flash flooding Wednesday in northern New England... ...Monsoonal shower and thunderstorm chances continue for the Southwest.

(NWS)

Items in Pro Farmer’s First Thing Today include:

• Soybeans firm overnight, buying limited in corn and wheat
• Fed comments will be in focus this afternoon
• Rains boost Aussie wheat production prospects
• Eurozone consumer inflation unexpectedly increases

— Senate tax bill faces contentious vote. The Wyden-Smith tax bill, which passed with bipartisan support in the House, is set for a Senate vote today. It faces opposition and is unlikely to achieve the 60 votes needed for cloture due to Senate Republicans’ resistance.

GOP debate: During a GOP lunch, Sen. Susan Collins (R-Maine) suggested advancing the bill with the possibility of amendments, facing strong pushback from Sen. Mike Crapo (R-Id.), who prefers waiting until Republicans potentially control Congress next year.

Democrats are focusing on support for the child tax credit (CTC) expansion.

Republican supporters include Sens. Markwayne Mullin (R-Okla.) and Josh Hawley (R-Mo.), who plan to vote “yes,” emphasizing tax cuts and pro-family policies.

Some Republicans prefer addressing taxes in 2025 when Trump’s tax cuts expire and criticize the CTC expansion and timing.

Some Democrats, like Sen. Chris Murphy (D-Ct.), have concerns about the bill’s balance between corporate tax cuts and family aid. Sen. Joe Manchin (I-W.Va.) remains undecided.

Outlook: The bill is unlikely to pass but will highlight Senate Republicans blocking the CTC expansion, a key issue in the presidential race — thus it’s a show vote pushed by Majority Leader Chuck Schumer (D-N.Y.).

— Israeli airstrike in Beirut suburb Israeli kills ‘most senior’ Hezbollah military commander accused in deaths of 12 children and teens. The Israeli military conducted an airstrike in Haret Hreik, a suburb of Beirut, Lebanon, targeting Fuad Shukr, a Hezbollah commander. This strike was in retaliation for an attack in the Israeli-controlled Golan Heights over the weekend that resulted in the deaths of 12 children and teenagers. The Israeli military confirmed in an X post that it had taken out Shukr in the strike. Hezbollah, a powerful Lebanese militia, denied responsibility for the Golan Heights attack. Haret Hreik is known as the headquarters for Hezbollah and was heavily damaged by Israeli airstrikes during the 2006 war between Israel and Hezbollah.

Reaction. Israel Prime Minister Benjamin Netanyahu had vowed a severe response to the Golan Heights attack. Western officials urged Israel to show restraint to prevent escalation of the conflict with Hezbollah.

Bottom line: Hezbollah previously warned of a response to its senior leaders being targeted, and U.S. and Arab diplomats now fear the situation could spiral, the Wall Street Journal reported. However, one analyst argued the incident shows “how exposed Hezbollah is to Israeli intelligence.”

— Hamas’ top political leader, Ismail Haniyeh, is dead after a targeted raid in Iran today, according to the Palestinian militant group. Hamas accused Israel of the killing while Israeli officials had “no comment” when asked about the Tehran attack. Haniyeh was there for the inauguration ceremony of new Iranian President Masoud Pezeshkian.

Market impact: Oil prices rose. Brent crude, the international oil benchmark, was up more than 2% after the death of Ismail Haniyeh. Iran and Hamas blamed Israel for the killing, which threatened to engulf the region in further conflict.

— UGA cuts Ukraine’s 2024 grain and oilseeds crop forecast. Ukrainian grain traders union UGA cut Ukraine’s 2024 combined grain and oilseeds crop forecast by 2.8 MMT to 71.8 MMT due to a heatwave across the country. UGA said production could include 23.4 MMT of corn, 19.8 MMT of wheat, 4.95 MMT of barley, 12.8 MMT of sunseeds, 4.8 MMT of soybeans and 4.3 MMT of rapeseed.

— Strong start to 2024-25 for Ukraine’s grain exports. Ukraine exported 3.4 MMT of grains during July, up sharply from 2.2 MMT during the month last year, based on ag ministry data. The volume included 1.44 MMT of wheat, 1.51 MMT of corn and 477,000 MT of barley.

— Sinograin to increase domestic wheat storage. China’s state grains stockpiler Sinograin said it will continue to increase domestic wheat storage in the country’s main producing areas in 2024. It will also work with local governments to provide services for farmers to sell grain.

— China to issue sliding tariff rate cotton import quotas to non-state firms. China will issue 200,000 MT in sliding tariff rate cotton import quotas to non-state firms to meet the needs of the domestic textile industry, state planner National Development and Reform Commission said. The announcement didn’t specify when the import quota will be issued. China issued 750,000 MT of such quotas in 2023.

— China’s manufacturing sector extends slump in July. China’s official manufacturing purchasing managers index slumped to a five-month low of 49.4 in July, the third straight month of contraction in factory activity and the lowest reading since February. Factories continued to grapple with weak demand and low prices.

— U.S. says start of new China tariffs will be delayed by at least two weeks. The U.S. Trade Representative’s office said on Tuesday some of the steep U.S. tariff increases on an array of Chinese imports, including electric vehicles and their batteries, computer chips and medical products will be delayed by at least two weeks. Link to details via Reuters.

— WTO expects merchandise trade growth to exceed the long-term average this year and accelerate into 2025, with Asia driving recovery despite global challenges. The World Trade Organization (WTO) reiterated its expectation that merchandise trade growth will surpass the long-term annual average this year and is set to accelerate into 2025. The recovery from last year’s slump in goods trade is uneven, with Asia being the primary driver of exports and imports. The WTO is optimistic about 2025, predicting that all regions will contribute to export and import growth. However, longer-term projections carry more uncertainty. Services trade, particularly in digital commerce and travel, is growing at a much faster rate than goods trade. Despite the positive outlook, global trade faces significant challenges, including wars, diplomatic tensions, the climate crisis, and rising protectionism. WTO Director-General Ngozi Okonjo-Iweala acknowledged these difficult times for global trade in the report.

— President Biden will receive a briefing today on the implementation of the Inflation Reduction Act (IRA). This morning, USDA Secretary Tom Vilsack and Steve Benjamin, Senior Advisor to the President and White House Director of Public Engagement, will hold a press call to announce the next steps in USDA’s efforts to implement the IRA.

— Lawmakers urge Yellen to limit biofuel tax credit to domestic producers. A bipartisan group of lawmakers in a letter (link) called on Treasury Secretary Janet Yellen to ensure that the biofuel tax credits under the Clean Fuel Production Credit (CFPC), also known as Section 45Z, are limited to domestic producers. This initiative is part of a broader effort to protect U.S. agriculture and biofuel industries from the adverse impacts of foreign competition, particularly from the influx of used cooking oil (UCO) imports, which are often used as feedstocks for biofuel production. (A similar letter farm groups was sent to Yellen on July 17.)

The lawmakers argue that allowing foreign feedstocks to qualify for U.S. tax credits undermines American farmers and biofuel producers. They contend that U.S. tax credits should not subsidize foreign agricultural producers, which would place domestic agriculture at a disadvantage.

The CFPC, effective Jan. 1, 2025, is designed to consolidate and replace previous biofuel incentives. It provides a nonrefundable general business credit for qualifying transportation fuels that meet specific emissions criteria and are produced in the United States. Lawmakers are pushing for final guidelines to be issued before the tax incentive takes effect to ensure regulatory certainty and support for domestic biofuel production.

The surge in imports of used cooking oil, particularly from China, has raised concerns about potential fraud and the negative impact on domestic biofuel producers. There are allegations that some of these imports might be blended with fresh vegetable oils, which could distort commodity prices and violate U.S. biofuel regulations. This has led to calls for stricter verification and certification processes to ensure the integrity of imported feedstocks.

Final Guidelines for 45Z: Lawmakers have requested that the Treasury issue final guidelines for the CFPC to ensure that only domestically produced biofuels qualify for the tax credits.

Sustainable Aviation Fuel (SAF) tax credit: The current SAF tax credit, known as Section 40B, is criticized for its stringent requirements that no domestically produced ethanol can meet. Lawmakers are advocating for more inclusive guidelines that support domestic production.

Broader array of technologies and practices: The letter to Yellen also calls for the inclusion of a wider range of climate-smart agricultural practices and technologies to support the decarbonization of existing biofuel production.

Implications: The push to limit tax credits to domestic producers is seen as a move to bolster U.S. biofuel production and protect domestic agricultural interests. By ensuring that tax incentives are directed towards U.S. producers, lawmakers aim to enhance the competitiveness of domestic biofuels in the global market and support the broader goals of the Biden administration’s climate policies.

— Wind and solar generated more electricity than fossil fuels in the European Union in the first half of this year. The rapid growth of wind and solar energy in the European Union has led to a significant shift in the electricity generation landscape. Link for details.

Record renewable generation. In the first half of 2024, wind and solar generated 30% of the EU’s electricity, surpassing fossil fuels at 27%. Renewables, including hydropower, accounted for over 50% of Europe’s power generation in this period. This marks a historic transition, with fossil fuels reaching an all-time low share in the EU’s electricity mix.

Declining fossil fuel use. Fossil fuel generation fell by 17% compared to the previous year, despite increasing electricity demand. Coal-fired power generation contributed just 8.6% to the electricity mix in April 2024, a 30% year-on-year decline. Gas generation saw a 22% year-on-year decline, accounting for 12.1% of the mix in April 2024.

Country-specific achievements• Germany added over 14 GW of solar capacity in 2023, becoming the first EU member state to add more than 10 GW in a single year.
• Spain saw the largest absolute increase in solar generation, with a 9.4 TWh (+26%) growth.
• Portugal achieved 61% of its electricity consumption from renewables in 2023.

Outlook: Grid infrastructure remains a significant bottleneck, with energy grid expansion taking 5-15 years compared to 1-5 years for renewable projects. The EU Action Plan for Grids proposes a €584 billion investment until 2030 to address grid concerns. Maintaining this pace of transition will require policy focus on easing barriers to wind and solar integration, including grid connections.

Impacts: This shift represents a “permanent structural change” in the EU’s energy landscape. The rapid growth of renewables is outpacing previous expectations and putting pressure on grid infrastructure to keep up. While the transition is progressing faster than in other sectors, challenges remain in grid expansion, permitting processes, and ensuring balanced growth across all EU member states. The next phase of the energy transition will likely focus on grid modernization, energy storage solutions, and policies to support continued renewable energy growth while maintaining grid stability and reliability.

— USDA sees no need for mandatory testing for highly pathogenic avian influenza (HPAI) in dairy cattle.

· Voluntary efforts: USDA Undersecretary Eric Deeble stated that current voluntary measures are effective, making mandatory testing unnecessary.

· Federal order: The existing federal order requires testing of lactating dairy animals crossing state lines, but no “extraordinary emergency authority” is warranted.

· State measures: Colorado has implemented mandatory bulk testing due to a concentrated dairy industry in one county. Other states have testing requirements for dairy animals at events like fairs.

· CDC initiatives: The CDC announced a $10 million investment to address bird flu in farm workers. Half will be spent educating and training farm workers about how to avoid being infected. The other half will pay for seasonal flu vaccines for an estimated 200,000 farm workers who tend livestock and poultry. The CDC hopes to vaccinate all of them but acknowledges that less than half of the general population typically gets a flu shot.

· Human cases: There are 14 known human infections of highly pathogenic avian influenza that resulted from contact with infected dairy cattle and poultry in the United States, and all but one has happened in the past four months — nine are confirmed in Colorado among workers eradicating chickens at two poultry farms. The CDC considers the risk to the public low and has no pending human tests.

· Preventing mutations: Vaccinating farm workers against seasonal influenza aims to reduce the risk of new flu strains emerging.

· Milk production: HPAI has not significantly impacted U.S. milk production on a national scale.

— Boar’s Head, a well-known deli meat company, is recalling an additional 7 million pounds of their products due to a listeria outbreak. The recall is due to an outbreak of listeria, a dangerous bacterium, linked to two deaths and dozens of illnesses across 13 states. The recall involves various types of meats, such as liverwurst, ham, and salami, produced at their Virginia plant. The products have sell-by dates ranging from July 29 to Oct. 17. This new recall adds to an earlier one involving over 200,000 pounds of similar products. The issue was first detected when a liverwurst sample from Maryland tested positive for listeria. Subsequent tests confirmed the same listeria strain was causing illnesses. Consumers are advised to check their deli meat products and follow recall guidelines to prevent potential health risks.

— Ongoing riots in Venezuela are a response to the controversial presidential election results. At least a dozen people have been killed, and more than 700 arrested amid the protests. President Nicolás Maduro has accused opposition leader María Corina Machado and presidential candidate Edmundo González of inciting violence. Protesters are urging Maduro to release the voting data from the election. Machado claims that the opposition holds about 73% of the voting tallies, which they argue proves Maduro did not win. Despite the opposition’s claims, the national electoral authority declared Maduro the winner, granting him a third term and continuing the socialist party’s 25-year rule. Venezuela’s opposition and several Latin American leaders are refusing to recognize Maduro’s victory.

— Kari Lake secured the Republican Senate primary win in Arizona, defeating two opponents. The election is to replace departing Arizona independent Sen. Kyrsten Sinema. She will face Democratic Rep. Ruben Gallego in November. At her election-night event, Lake, a staunch supporter of Donald Trump and a proponent of the claim that the 2020 election was stolen, characterized the upcoming Senate race in November as a “battle between good and evil.” Arizona, a crucial swing state for the upcoming presidential election, remains a center of conspiracy theories regarding the last election and will play a significant role in determining Senate control.

The Cook Political Report with Amy Walter writes: “Lake’s 55%-39% win over an under-funded opponent speaks to her underlying weaknesses as a candidate in November.”

— Univ. of Arizona joins STARS College Network to boost rural student enrollment with $150 million support. The University of Arizona (UA) has joined the STARS College Network, an initiative aimed at increasing enrollment of rural students, alongside schools like Brown University, UC Berkeley, and Northwestern University. Supported by Trott Family Philanthropies with an initial $20 million gift and a $150 million pledge over 10 years, the network provides rural students with the necessary information and support to enroll in and graduate from top colleges. Link to details via Arizona Daily Star.

— Rick Gibson, a prominent figure in the crop insurance industry, passed away on Monday at the age of 88 while on safari with his son, Kim Gibson. Rick was widely recognized for his significant contributions to the development of crop insurance policies that have become vital for farmers. Ruth Gerdes, another influential leader in the industry, praised Rick’s tenacity, drive, and skill, emphasizing that without his efforts, the revenue policies that farmers rely on today would not exist. Gibson, along with Art Barnaby and Gerdes, was instrumental in creating the first revenue insurance product, known as Crop Revenue Coverage (CRC). This innovation has had a profound impact on the crop insurance industry, providing farmers with a reliable safety net against financial losses due to adverse growing and market conditions. Gerdes highlighted Rick’s unique leadership and his willingness to work directly with farmers to address their needs. Gibson’s legacy in crop insurance is marked by his pioneering work and his commitment to improving the financial stability of farmers. His contributions have left an indelible mark on the industry, ensuring that farmers have access to essential insurance products that protect their livelihoods.

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