FOMC Decision Day

Updates: Policy/News/Markets, March 19, 2025

— White House taps RFK Jr. ally for health advisory role. The White House has appointed entrepreneur and author Calley Means as a special adviser to help implement the Trump administration’s plan to combat chronic illness. Means, an ally of Health and Human Services Secretary Robert F. Kennedy Jr., will focus on food policy and corporate influence on health. He will also assist the Make America Healthy Again Commission, established by President Donald Trump last month to evaluate chronic disease and reform federal health strategies.

— Equities today: Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed to slightly higher openings. In Asia, Japan -0.3%. Hong Kong +0.1%. China -0.1%. India +0.2%. In Europe, at midday, London -0.1%. Paris +0.4%. Frankfurt -0.4%.

Equities yesterday:

(Exchanges)

— Powell’s remarks under focus as Fed expected to hold rates steady. Federal Reserve officials are expected to keep interest rates unchanged when an announcement comes this afternoon. The Fed must evaluate the economic impact of President Trump’s policies amid inflationary pressures and slowing growth. The Fed’s updated economic forecasts will be released alongside the rate decision, with expectations of two rate cuts later this year. Powell’s post-meeting press conference will be closely scrutinized for signals on future policy direction, particularly regarding tariffs, inflation, and consumer sentiment. Investors will also watch for potential adjustments to the Fed’s balance sheet strategy in the coming months.

— Mortgage rates tick up, slowing refinancing activity. The average U.S. 30-year mortgage rate rose for the first time since early January, reaching 6.72% in the week ending March 14, according to the Mortgage Bankers Association. The increase led to a nearly 13% drop in refinancing applications, while purchase applications saw only a slight 0.1% rise. A sustained decline in rates would be crucial for improving housing affordability amid high home prices.

— BOJ holds rates amid U.S. tariff concerns. The Bank of Japan (BOJ) kept its benchmark rate unchanged at 0.5%, citing concerns over the impact of U.S. trade policies. With President Trump’s reciprocal tariffs set to be detailed in two weeks, Governor Kazuo Ueda emphasized uncertainty in global trade as a key risk factor. While the yen initially weakened to 150 per dollar before rebounding, Ueda’s remarks left the door open for a potential rate hike in May. Economists point to strong wage growth and inflation trends as signs of economic resilience, though the BOJ remains cautious amid rising global protectionism. Bond yields in Japan continue to climb, with the 30-year yield hitting its highest level since 2006. Ueda signaled no immediate intervention, stating that future rate decisions would depend on incoming data.

— Ag markets today:

• Quiet, two-sided trade overnight. Soybeans saw relative strength overnight while corn and wheat traded narrowly on either side of unchanged. As of 7:30 a.m. ET, corn was a penny lower to fractionally higher, soybeans were 2 to 3 cents higher and wheat futures were 2 cents lower to 2 cents higher. The U.S. dollar index was around 400 points higher, while front-month crude oil futures were trading near unchanged.
• Wholesale beef prices work higher. Choice cutout continues to climb in the wake of strong cash cattle prices last week. Choice rose $2.16 on Tuesday to $323.32, the highest level in over a month. Select rose $1.33 to $309.23. Cash cattle trade remains abysmal so far this week and will likely continue that way until Friday, given this week’s Cattle on Feed Report from USDA.
• Pork cutout continues choppy action. Pork cutout fell $2.01 to $95.64 Tuesday, led by a $10.88 drop in primal bellies. Movement fell to 259.78 loads, indicating relatively weak demand despite lower prices. The CME lean hog index did bounce 4 cents to $89.32.

— Ag trade: Jordan issued a tender to buy up to 120,000 MT of wheat.

— S&P Global raises corn plantings forecast. S&P Global Commodity Insights projected that U.S. farmers would plant 94.3 million acres of corn in 2025, up 800,000 acres from their previous forecast released in January and up 3.7 million acres from 2024. They left their soybean planting forecast unchanged at 83.3 million acres, down 3.8 million acres from last year. The firm lowered its cotton plantings to 10.2 million acres, down 250,000 acres from January, and projected wheat plantings at 46.6 million acres, down 250,000 acres from their earlier forecast.

— Agriculture markets yesterday:

(Exchanges)

— Update on $21 billion ag disaster relief. The December 2024 funding bill provides nearly $21 billion in disaster assistance for farmers recovering from hurricanes, droughts, wildfires, and other natural disasters from 2023-2024.

Key allocations

• $2 billion for livestock producers impacted by drought, wildfires, and floods, distributed through block grants or direct compensation.
• Block grants: $220 million for states with small agricultural sectors.
• Ad hoc relief: USDA will provide additional assistance for losses not covered by existing programs.

Implementation: USDA has discretion over distribution and eligibility criteria, with details forthcoming soon.

— Funding availability for $10 billion in ECAP payments published. The Notice of Funding Availability (NOFA) for the $10 billion Emergency Commodity Assistance Program (ECAP) (link) where farmers can sign up for the assistance starting today (March 19) has been published in the Federal Register (link). Farmers will receive payments based on 85% of the level of assistance shortly after their applications are approved. A second payment could be made if funds remain available
after the initial payments are completed. USDA announced the effort Tuesday, including per-acre payment rates and other details (see next item).

Comments: The beginning of the $10 billion in ag economic aid payments puts to rest errant conjecture that that may not be made. Also, these are no “Biden payments” as some say. The payments were pushed by a bipartisan group of lawmakers in the last Congress and supported by Donald Trump before his second term began. As for the timing of the payments, the lawmakers put a 90-day deadline on them from Dec. 21. That was a major task to complete but USDA did it and as previously noted, they are getting good marks on the completed task, including USDA Secretary Brooke Rollins, her top officials, Farm Service Agency officials, and USDA programmers.

— USDA’s Farm Service Agency (FSA) has launched the Emergency Commodity Assistance Program (ECAP) for the 2024 crop year. This program will provide up to $10 billion in direct payments to eligible agricultural producers to help mitigate the impacts of increased input costs and falling commodity prices. (Link to our special report issued Tuesday morning, March 18.)

Eligibility requirements. To qualify for ECAP payments, producers must meet the following criteria:

• Crops: USDA said that “loan commodities” except graded wool, nongraded wool, mohair, and honey, are eligible. That means wheat, corn, sorghum, barley, oats, upland cotton, extralong staple cotton, long grain rice, medium grain rice, peanuts, soybeans, other oilseeds, dry peas, lentils, small chickpeas, and large chickpeas. Eligible “other oilseeds” are canola, crambe, flax, mustard, rapeseed, safflower, sesame, and sunflower.
• Active engagement: Be actively engaged in farming.
• Interest in input expenses: Have an interest in input expenses for a covered commodity.
• Acreage reporting: Have reported acreage of eligible commodities to FSA for the 2024 crop year using an FSA-578 form. If applicable, they must also report prevent plant acres on an FSA-576 form.
• Deadline for new reports: Producers who have not previously reported 2024 crop year acreage or filed a notice of loss must submit these by August 15, 2025.

Eligible acreage and commodities

• Double cropping: Acreage with both an initial and a double crop commodity is eligible for payment on both plantings if in an approved combination.
• Multiple uses: Acreage with multiple intended uses is only eligible for one intended use.
• Grazing and planting: Producers can receive payment for both grazing small grain acreage and planting a spring commodity if there is an RMA short rate policy in effect for 2024.
• Failed or prevented planting: If an initial eligible commodity failed or was prevented from being planted, and a subsequent eligible commodity was planted, payment is limited to the initial crop unless it’s part of an approved double crop combination.
• Ineligible acreage: Volunteer, experimental, green manure, or left-standing acreage is not eligible.

Important Dates
§ Application period: March 19, 2025, through August 15, 2025.

(USDA, FSA)

How final ECAP payment rates are different from the original House Ag Committee GOP staff estimates or minimum payments for the so-called minor crops:

(Paul Neiffer)

How to apply

• Pre-filled applications: These will be mailed to producers with reported eligible commodities as of March 10, 2025.
• Submission options: Applications can be submitted in-person, electronically via Box and One-span, by fax, or online using a secure login.gov account starting March 19, 2025.
• Single application: One application covers a producer’s entire operation nationwide.
• Required forms: Producers must have the following forms on file:
  
  • Form AD-2047
  • Form CCC-901 (if applicable)
  • Form CCC-902
  • Form CCC-943 (if applicable)
  • AD-1026
  • Form SF-3881

Payment details

• Payment calculation: Payments are based on a flat rate per acre multiplied by eligible reported acres. Initial payments are factored by 85% to ensure total program payments do not exceed available funding.
• Prevented planting: Payments for prevented planting acres are limited to 50% of reported acres.
• The payments reflect the higher of: 26% of the economic loss — the difference between the expected cost of production per acre and the expected gross return per acre — or the “economic loss payment rate;” or 8% of the eligible commodity’s Price Loss Coverage reference price, multiplied by the eligible commodity’s PLC national average payment yield. The latter is the minimum payment rate.
• Payment limitations: The total ECAP payments received by a person or legal entity cannot exceed:
  
  • $125,000 if less than 75% of their average gross income from 2020 to 2022 is from farming, ranching, or forestry.
  • $250,000 if 75% or more of their average gross income from 2020 to 2022 is from farming, ranching, or forestry.

Additional resources

• ECAP calculator: Available for estimating payments.
• FSA location finder: To find local FSA offices.
• ECAP Application and Resources: Available starting March 19, 2025.
• ECAP fact sheet
• ECAP FAQs

— Oil prices decline as Russia and U.S. agree to halt energy attacks. Oil prices fell on Wednesday after Russia agreed to President Donald Trump’s proposal for Moscow and Kyiv to temporarily stop attacking each other’s energy infrastructure. The decision could potentially increase Russian oil supply to global markets. In early trading, Brent crude futures declined by 23 cents (0.3%) to $70.33 per barrel, while U.S. West Texas Intermediate (WTI) dropped 25 cents (0.4%) to $66.65 per barrel. Meanwhile, U.S. tariffs on Canada, Mexico, and China have raised recession concerns, weighing on crude oil demand and further pressuring prices. In U.S. inventory data, crude stocks rose by 4.59 million barrels for the week ending March 14, according to American Petroleum Institute figures. However, gasoline and distillate stocks declined by 1.71 million and 2.15 million barrels, respectively. Official government data is expected later Wednesday.

— Oil prices slipped Tuesday as Trump/Putin ceasefire talks raise supply speculation. Oil prices fell about 1% on Tuesday as President Trump and Russian President Putin agreed to a 30-day halt on attacks targeting energy infrastructure in Ukraine. Brent crude settled down 51 cents at $70.56 (-0.7%), while WTI dropped 68 cents to $66.90 (-1.0%). While the possibility of eased sanctions on Russian fuel exports fueled speculation of increased supply, analysts expect any impact to be gradual. Meanwhile, Wood Mackenzie revised its 2025 Brent forecast down to $73 per barrel. Geopolitical risks also kept prices volatile, as Trump pledged continued strikes on Yemen’s Houthis and warned Iran over its regional activities. Israel’s airstrikes in Gaza further escalated tensions. Analysts anticipate a 0.9 million barrel build in U.S. stockpiles this week, underscoring market uncertainty amid conflicting economic and geopolitical pressures.

— EPA expected to propose 2026 biofuel targets by spring, says Darling CEO. Darling Ingredients Inc. CEO Randall Stuewe expects the Environmental Protection Agency (EPA) to announce U.S. biofuel blending targets for 2026 by April or May. Speaking at a Piper Sandler energy conference covered by Bloomberg, Stuewe emphasized the renewable diesel industry’s need for a stronger quota, as producers seek a 2 billion-gallon increase in biomass-based diesel volumes. While he doubts the current administration will approve such a large boost, he noted that any increase would benefit Darling’s Diamond Green Diesel partnership with Valero Energy. Stuewe added that while his company remains in “good shape,” competitors are struggling. The EPA has not yet commented on the matter.

— Trump prefers Liberal leader in Canada amid trade war. President Donald Trump stated he would rather work with Canada’s Liberal Party leader, Mark Carney, to resolve the ongoing trade war, downplaying Conservative leader Pierre Poilievre. In a Fox News interview, Trump dismissed Poilievre as “no friend of mine” and suggested it would be “easier” to negotiate with a Liberal-led government. His remarks come as Canada braces for a potential national election, with Carney leading in polls. The trade dispute escalated after Trump imposed tariffs on Canadian goods, prompting retaliatory measures from Ottawa.

— Need for clarity on tariffs. Tariffs have a profound impact on businesses and economies, making transparency in policy crucial.

Impact of tariffs on businesses and economies

• Economic uncertainty: Unclear tariff policies create uncertainty, reducing consumer and business confidence and hindering investment.
• Supply chain disruptions: Industries reliant on imports, such as construction and automotive, face cost increases and delays.
• Price increases: Anticipatory price hikes due to tariffs contribute to inflationary pressures.
• Retaliatory measures: Other nations impose counter-tariffs, increasing costs for exporters and straining trade relations.

Need for clarity

• Long-term investment: Companies require stable tariff policies for strategic planning and major investments.
• Policy consistency: Shifting tariff policies make it difficult to promote domestic manufacturing.
• Market stability: Clear policies reduce financial market volatility and foster investor confidence.

— Farm Bureau releases report on. U.S tariffs and retaliatory actions. Link to the item.

• Canada: In response to U.S. tariffs, Canada imposed a 25% tariff on approximately $21 billion (CA$30 billion) of U.S. goods starting March 4, 2024. Over a quarter of these tariffs target U.S. agricultural exports, including $5.8 billion worth of products such as processed foods, coffee, wine, fresh fruit, dairy, poultry, and rice. Watermelon exports are particularly affected, with 97% of U.S. shipments previously heading to Canada. Canada has pledged a dollar-for-dollar retaliation and is considering further tariffs on an additional $87 billion in U.S. exports, potentially covering all agricultural goods. A separate $21 billion tariff package, effective March 12, targets U.S. steel and aluminum but spares agriculture.
  

  

  (Farm Bureau )

• China: In the second round of retaliatory tariffs, China imposed additional duties on U.S. agricultural products, affecting shipments leaving the U.S. after March 10 and arriving in China by April 12. The new tariffs include a 15% increase on chicken, wheat, corn, and cotton, while a 10% tariff applies to a broad range of goods, including soybeans, pork, beef, dairy, and fruits. China, the third-largest market for U.S. agricultural exports in 2024, has targeted around $21 billion worth of goods. Soybeans ($12.8 billion), cotton ($1.5 billion), and grain sorghum ($1.3 billion) are among the hardest hit. Historically, China has accounted for a significant share of U.S. exports in several categories, including macadamia nuts (99%) and frozen swine carcasses (96%). Nearly all affected products (97%) were already subject to previous retaliatory tariffs dating back to 2018 and 2020, with some reaching as high as 55%.
  

  

  (Farm Bureau )

— Senate GOP pushes to make 2017 tax cuts permanent. Senate Budget Committee Republicans are meeting with the Senate parliamentarian in the coming weeks to explore using the “current policy baseline” as a scoring method to permanently extend the 2017 Trump tax cuts. This is a priority for Senate GOP leaders, contingent on the parliamentarian’s approval. House Republicans support the effort but want assurances before committing, fearing it may disrupt the balance of their budget resolution.

The House GOP hopes to pass a compromise budget resolution the week of April 7 before recess, while Ways and Means Committee Republicans continue intensive sessions to refine their tax bill. Treasury Secretary Scott Bessent has been involved in discussions, particularly regarding tax offsets. Senate Finance Committee Republicans are also meeting regularly to shape their tax strategy.

— Odds still very low for a stand-alone farm bill this year but a GOP reconciliation bill could include a ‘plus-up’ for Title I reference prices. This could include an increase in the sugar loan rate and perhaps some changes to crop insurance that were pushed as part of the House farm bill last year.

— JD Vance will chair the Republican National Committee’s finance committee heading into the 2026 midterm election cycle, giving the vice president entrée to the world of deep-pocketed donors whose support is crucial for any future presidential aspirations. The RNC said in its announcement that this is the first time a sitting vice president has served as head of its finance committee, which organizes fundraising efforts for the party. Chairman Michael Whatley said in a statement that he was “honored to work with Vice President Vance to grow our party and ensure President Trump has the votes in Congress to Make America Great Again.”

— RFK Jr wants to overhaul infant formula industry. HHS Secretary Robert F. Kennedy Jr. has directed the FDA to strengthen oversight of the U.S. infant formula industry, marking the most significant review in over 25 years. The initiative includes a comprehensive update of formula nutrients, increased testing for heavy metals like arsenic and lead, and improved transparency from manufacturers. Dubbed “Operation Stork Speed,” the effort follows Kennedy’s longstanding concerns about toxic metals in baby formula and aims to enhance safety, nutrition, and supply chain resilience. The move is expected to drive industry-wide changes, though the full impact remains uncertain.

— Bird flu strategy sparks controversy. U.S. Health Secretary Robert F. Kennedy Jr. has suggested allowing bird flu to spread in poultry flocks rather than culling infected birds, aiming to identify immune birds. RFK Jr. argued on Fox News that allowing the virus to spread would help “identify… and preserve the birds that are immune to it.” Supported by USDA Secretary Brooke Rollins, this approach has drawn sharp criticism from some scientists who warn of potential virus mutations, risks to humans, and economic fallout. With over 162 million birds culled and 70 human cases reported since 2022, concerns about food supply disruptions and rising costs remain high.

— China expected to expand trade war arsenal. The U.S. is able to use tariffs as an effective negotiation tactic with China due to heavy imports of Chinese goods. China only imports about a third of what they export to the U.S., so they may resort to more creative trade barriers. A Reuters report noted Beijing’s blocking of soybean and lumber shipments, allowing import licenses to lapse for pork, poultry and beef and antitrust probes launched on Google and Nvidia earlier this year as examples of more non-traditional negotiation tactics. China could still manipulate exchange rates or block exports of rare metals necessary to manufacture U.S. goods if tensions continue to escalate.

— China lifts ban on Argentine poultry imports. China’s customs authority said today it has lifted a ban on poultry imports from Argentina, according to a Reuters report. Imports from Argentina were suspended in February 2023 following detection of Highly Pathogenic Avian Influenza in commercial poultry. The lift on the imports ban comes in the wake of China limiting poultry imports from the U.S.

— China urged to expand monetary stimulus amid trade war. China must implement a “more significant” monetary stimulus beyond its recently announced 30-point growth strategy to counter deflation fears and boost domestic demand amid an escalating trade war with the U.S., warned Xu Dingbo, associate dean at CEIBS. Speaking at a Beijing conference reported on by the South China Morning Post, Xu emphasized the need to shift expectations from deflation to moderate inflation. China’s consumer price index fell 0.1% year-on-year, far below the 2% target for 2025. Xu stressed that local governments, rather than Beijing, drive spending and must be financially supported. The central bank has pledged interest rate cuts but has yet to act.
Xu also noted that a U.S. dollar depreciation is likely, given the trade imbalance, and while challenging in the short term, it could push China toward higher-value manufacturing. Despite tensions, he asserted that China remains indispensable to global trade.

— NWS outlook: Heavy snow/blizzard conditions over Central Plains to the Upper Great Lakes on Wednesday; light to moderate snow over the Cascades on Thursday... ...There is an Enhanced Risk (level 3/5) of severe thunderstorms over parts of the Middle Mississippi/Ohio Valleys and Upper Great Lakes on Wednesday... ...There is a Critical Risk of fire weather over the parts of the Southern High Plains on Wednesday and Thursday.

(NWS)

8-20: FOMC blackout where Fed officials cannot comment on monetary policy or the economy.
19: FOMC meets (interest rate decision; projections; presser)
20: Spring equinox
20: NCAA women’s basketball finals
21: USDA Chicken & Eggs report | Cattle on Feed | Milk Production
25: USDA Cold Storage report | USDA Food Price Outlook
27: USDA Hogs & Pigs report
27: MLB Opening Day
28: Personal Consumption Expenditures Price Index
29: Last day of Ramadan
31: USDA Prospective Plantings, Grain Stocks and Rice Stocks reports | Ag Prices

Economic aid for farmers | Disaster aid for farmers | Farm Bureau summary of aid/disaster/farm bill extension | 45Z tax incentive program | Poultry and swine line speeds | U.S./China Phase 1 agreement | WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | RFS | IRA: Biofuels | IRA: Ag | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | Gov’t payments to farmers by program | Farmer working capital | USDA Ag Outlook Forum | Eggs/HPAI | NEC task force on HPAI, egg prices | Options for HPAI/Egg prices | Trump tariffs | Greer responses to lawmakers | Trump reciprocal tariffs |