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News/Markets/Policy Updates: Aug. 29, 2024

— Equities today: Asian and European stock indexes were mixed to weaker overnight. U.S. Dow opened around 280 points higher. In Asia, Japan flat. Hong Kong +0.5%. China -0.5%. India +0.4%. In Europe, at midday, London +0.3%. Paris +0.6%. Frankfurt +0.6%.

U.S. equities yesterday: The Dow closed down 159.08 points, 0.39%, at 41,091.42. The S&P 500 fell 33.62 points, 0.6%, to close at 5,592.18. The Nasdaq dropped 198.79 points, 1.12%, at 17,556.03.

— Nvidia reports soaring revenue but faces challenges, shares dip. Nvidia reported a significant increase in revenue, with second-quarter sales more than doubling to $30 billion, and it forecast third-quarter revenue at $32.5 billion, exceeding Wall Street expectations. However, Nvidia’s shares fell as the forecast fell short of the most optimistic predictions. The company also acknowledged production issues with its next-generation Blackwell chips, which impacted profit margins. As Nvidia navigates these challenges, smaller competitors are emerging, aiming to disrupt its dominance in the AI chip market amid the ongoing AI technology boom.

— Warren Buffett’s conglomerate, Berkshire Hathaway reached a market capitalization of over $1 trillion for the first time. This makes it the first non-technology company in the U.S. to join the exclusive “Trillion Dollar Club,” which includes giants like Apple, Nvidia, and Microsoft. The company’s stock has risen by more than 30% in 2024, significantly outperforming the S&P 500’s 18% gain during the same period. This impressive performance is attributed to strong results from its insurance businesses and overall economic optimism. Despite this success, Warren Buffett has cautioned investors not to expect “eye-popping performance” in the future, due to the challenges posed by Berkshire’s large size and the difficulty in finding substantial acquisitions that could significantly boost growth.

— Ford has scaled back its diversity, equity, and inclusion (DEI) program, joining other U.S. companies under pressure and online criticism. The automaker will no longer participate in the Human Rights Campaign’s Corporate Equality Index, has refocused employee resource groups, and is shifting some corporate sponsorships. Activist Robby Starbuck claims credit for influencing these changes, with Lowe’s also announcing a similar policy shift recently.

— Ag markets today: Soybeans firmed amid corrective buying overnight, while corn pivoted around unchanged. Winter wheat markets weakened, while spring wheat futures posted mild gains. As of 7:30 a.m. ET, corn futures were trading steady to a penny higher, soybeans were mostly 9 to 10 cents higher, SRW wheat was 3 to 5 cents lower, HRW wheat was a penny to 4 cents lower and HRS wheat was 1 to 3 cents higher. The U.S. dollar index and front-month crude oil futures were both modestly firmer.

Wholesale beef prices weaken. Choice boxed beef prices fell $4.68 to $307.29 on Wednesday, the lowest level since mid-May. Select dropped $2.62 to $297.63. That tightened the Choice/Select spread to $9.66, well below year-ago and the average for this time of year.

Seasonal pressure persists in cash hog fundamentals. The CME lean hog index is down another 37 cents to $87.45 as of Aug. 28. The index is down $6.19 from its seasonal peak on Aug. 1. The pork cutout fell 77 cents to $95.28, though that’s 73 cents above last week’s low and $1.65 higher than the July low.

— Agriculture markets yesterday:

• Corn: December corn futures fell 2 cents to $3.90 3/4 and nearer the session low.
• Soy complex: November soybean futures fell 9 1/2 cents to $9.77 though settled well off session lows. September meal futures fell $6.5 to $310.8, nearer session lows. September bean oil firmed 65 points to 41.80 cents.
• Wheat: December SRW wheat rose 6 cents to $5.41 1/2. December HRW wheat gained 9 cents to $5.55 3/4. Both markets closed nearer their session highs.
• Cotton: December cotton futures sunk 143 points to 68.55 cents and settled nearer session lows.
• Cattle: Expiring August live cattle (which go off the board at noon Friday) fell $1.425 to $183.75, while most-active October slid 77.5 cents to $178.625. August feeder futures, which expire at noon tomorrow, sagged 65 cents to $243.55 and most-active October dropped 62.5 cents to $241.30.
• Hogs: Stable cash and wholesale prices seemed to translate into mixed futures action Wednesday, with nearby October futures skidding 40 cents to $81.675, while the deferred contracts posting modest gains.

— Quotes of note:

• Fed’s Bostic signals possible rate cuts but stresses caution. Atlanta Fed President Raphael Bostic indicated that it “may be time” to cut interest rates but emphasized the need for more data before deciding. While inflation has fallen faster and unemployment has risen more rapidly than expected, Bostic remains cautious about lowering rates too soon. He prefers to wait to avoid potential future rate hikes. His remarks align with Fed Chair Jerome Powell’s recent comments that the timing of rate cuts will depend on upcoming economic data, with key reports on inflation and employment due soon. Officials will get a fresh inflation reading Friday when the personal consumption expenditures price index is released and see another update on employment next week when the Labor Department releases the August jobs report on Sept. 6.

• Fed surveys signal weakening job market as employment gauges shrink. Recent Federal Reserve regional surveys highlight growing risks to the U.S. job market, prompting the central bank’s shift toward potential interest-rate cuts. August data from five regional manufacturing reports show declining payrolls and shrinking employment in both manufacturing and service sectors. Hours worked are also on the decline, raising concerns about possible job cuts. These trends follow disappointing July job growth and suggest a moderation in the labor market, which Fed Chair Jerome Powell has acknowledged as a key concern for policymakers.

— EIU: Softening U.S. labor market signals economic slowdown ahead. The U.S. labor market, while still strong historically, is showing signs of weakening, with key indicators like the hires and quits rates declining and unemployment rising to 4.3%, according to the Economist Intelligence Unit (EIU)/link. The Fed’s tight monetary policy, coupled with a cooling labor market, raises the risk of a larger employment contraction, potentially moving away from a “soft landing” scenario, the report notes. Although inflation is within target, continued tight policy could further strain the labor market. The slowdown is expected to impact cyclical industries like construction and manufacturing more than others.

Market perspectives:

— Outside markets: The U.S. dollar index was higher, with the euro and British pound losing ground to the greenback. The yield on the 10-year U.S. Treasury note ticked down slightly, trading around 3.84%, with a mixed-to-negative tone in global government bond yields. Crude oil futures were higher, with U.S. crude around $74.90 per barrel and Brent around $77.85 per barrel. Gold and silver futures were higher, with gold at around $2,551 per troy ounce and silver at around $29.84 per troy ounce.

— Copper futures drop to $4.1/lb amid weak demand and China concerns. Copper futures declined sharply to around $4.1 per pound, reversing a recent rebound that peaked at $4.3 on Aug. 27. The downturn is fueled by renewed worries over weak demand, especially from China, where growth concerns are exacerbated by Beijing’s reluctance to support the struggling manufacturing sector, opting instead to invest in newer technologies. August manufacturing PMIs for both official and Caixin indices showed sharper-than-expected contractions, and Nvidia’s revenue outlook, which depends heavily on copper-intensive data-center construction, failed to meet optimistic forecasts.

— USDA daily export sale:
• 118,000 MT sorghum to China during the 2024/2025 marketing year

— Prolonged monsoon could threaten India’s crops. India’s monsoon rains are likely to be prolonged into late September this year due to the development of a low-pressure system in the middle of the month, two weather department officials told Reuters. “There is an increased probability of a low-pressure system developing in the third week of September, which could delay the withdrawal of the monsoon,” said a senior official of the India Meteorological Department. Above-normal rainfall due to the delayed withdrawal of the monsoon could damage India’s crops like rice, cotton, soybean, corn, and pulses, which are typically harvested from mid-September.

— Carbon registry Verra rejects China rice projects. Verra, the U.S.-based registry that sets standards for the voluntary carbon market, has rejected as many as 37 low-emission Chinese rice cultivation projects following a quality control review. The integrity of the Chinese rice projects, which make use of alternative irrigation methods to cut methane emissions caused by the decomposition of plants in rice fields, was first called into question last year. Verra has already “permanently inactivated” the methodology by which the credits generated by the projects are calculated. In what it described as an “unprecedented action,” Verra ordered project backers to pay compensation for the excess credits they issued after identifying serious failures in the way they were calculated. Shell Oil was one of the companies using offsets generated by Chinese rice projects to help meet its climate goals. The company told Reuters earlier this year it remained committed to ensuring its credit portfolio had a “verifiable carbon benefit.”

— Canadian wheat, canola production forecast to rise from year-ago. Statistics Canada estimated Canadian farmers will produce more wheat and canola compared with 2023, according to July-derived yield model estimates using satellite imagery and agroclimatic data. Increased production is expected to be driven by higher yields because of overall better growing conditions in Western Canada as of the end of July, compared with a year earlier. However, Stats Canada acknowledged that a lack of moisture and high temperatures in some parts of the Prairies continued to be a cause for concern.

Canadian wheat production is forecast to rise 4.3% to 34.4 MMT. Yield is expected to increase 5.9% to 48.5 bu. per acre. Harvested area is expected to decrease by 1.6% to 26.0 million acres.

Canadian canola production is forecast to increase 1.6% from last year to 19.5 MMT. Yield is forecast to rise 1.8% to 39.4 bu. per acre, while harvested area is expected to be down 0.4% to 21.8 million acres.

Mike Jubinville with MarketsFarm noted Western Canada had “bumper crop conditions, with the best spring rains in years and mild temps. But conditions changed during the latter half of July and start of August, turning hotter/drier. Early (and it’s early) harvest results in the southern areas of the Prairies are showing light test weight cereals (spring wheat, durum, barley, oats) and diminished yield, but higher protein. I suspect yield and crop conditions will get better when harvest really gets going further north and east from southern Alberta/southwest Saskatchewan in the next couple of weeks.”

Jubinville said, “Interesting to note that in this report… StatsCan boosted its crop totals for 2023 and 2022… adding 1 MMT to canola and 1.5 MMT to wheat. As for this year’s production, there was a lot of trade skepticism here ahead of the StatsCan report release since the data they used was five weeks old. So, there was some confusion on what to expect… how well would these numbers reflect current conditions. After voicing my own skepticism of what this report might say going into this report… concerned the numbers might come in higher than expected in reflecting early growing conditions… they in fact are probably closer to the reality of today’s more diminished yield expectations.”

— Canadian rail labor dispute resolution could mean several weeks for freight operations to fully recover. The recent labor dispute involving Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) has significantly impacted Canada’s rail freight operations. The lockout of union workers, which began on Aug. 22, led to a temporary halt in operations, causing disruptions in the supply chain and affecting both Canadian and U.S. trade. The Canada Industrial Relations Board intervened on August 24, ordering the workers back to their jobs and mandating binding arbitration to resolve the contract dispute. Despite this resolution, the union plans to challenge the arbitration in court.

Although operations have resumed, experts predict that it could take several weeks for the rail networks to fully recover. The backlog of freight, particularly hazardous materials, is a significant challenge. The embargoes and the brief shutdown have led to congestion and delays in the supply chain, affecting industries reliant on rail transport.

The disruption has had substantial economic repercussions, with billions of dollars in trade affected, particularly U.S.-bound commerce that relies on Canadian railways. The railways are crucial for transporting goods such as fertilizers, grains, and consumer products across North America.

Both CN and CPKC are working on recovery plans to address the backlog and restore normal operations. These efforts include coordinating with ports and other industry partners to manage the flow of goods and reduce congestion. However, full recovery and stabilization of supply chains may take additional time beyond the immediate resumption of operations.

(OECD, Council on Foreign Relations)

— NWS outlook: Above average heat expected to linger across the Ohio and Tennessee Valleys through Friday before a cooling trend arrives by the weekend... ...Strong to severe thunderstorms expected across the upper Midwest and Mid-Atlantic today, then across the Great Lakes on Friday... ...Some tropical heavy rain and thunderstorms could affect the western Gulf Coast region through the next couple of days.

(NWS)

Items in Pro Farmer’s First Thing Today include:

• Soybeans firmer, corn choppy and wheat varied overnight
• Argus expects 60% plunge in non-EU French wheat exports
• Eurozone economic sentiment improves, consumer confidence slumps

— Israeli military said its troops killed five Palestinian fighters who were hiding inside a mosque in the West Bank city of Tulkarm, in one of the largest assaults on the occupied territory for months.

— Ukraine grain exports far outpacing year-ago in early 2024-25. Ukraine’s grain exports through the first two months of 2024-25 totaled 6.75 MMT, up 2.15 MMT (62.3%) from the same period last year, according to ag ministry data. Shipments included 3.4 MMT of wheat, 2.2 MMT of corn and 1.1 MMT of barley.

— At the Farm Progress Show held in Boone, Iowa, discussions took place regarding the farm bill and other topics.

• House Ag Chairman GT Thompson (R-Pa.) expressed optimism about the farm bill but noted that it likely won’t be finalized until after the election. He emphasized the importance of passing the bill through the House in September, citing the need for farmers and rural communities to feel supported. Meanwhile, Thompson criticized the Biden administration for changes to financial aid forms, arguing that they disadvantage farm families when applying for college assistance.

• USDA Secretary Tom Vilsack highlighted challenges with farm income and defended the administration’s trade policies despite a widening agricultural trade deficit. He announced new funding for fertilizer plants and mentioned ongoing trials for an H5N1 vaccine for dairy cattle (see related items) Vilsack also discussed tightening regulations on claims made by companies about animal raising practices and environmental impacts, pointing to misleading labels on food products. Vilsack also addressed the issue of U.S. ag exports to China, noting that exports to China have “dropped significantly.” He attributed this decline to the sensitivity of Chinese officials to criticisms from the United States, which influences their purchasing decisions. Vilsack suggested that the Chinese government’s awareness and reaction to U.S. political and diplomatic actions are impacting trade relations, leading to reduced purchases of U.S. agricultural products. Vilsack highlighted USDA’s efforts to diversify export markets. He mentioned the $300 million provided to agricultural groups through the Regional Agricultural Promotion Program (RAPP), aimed at expanding trade opportunities in regions beyond traditional top buyers like China. This initiative seeks to increase U.S. agricultural exports to markets in Southeast Asia, Africa, and Latin America, thereby reducing reliance on major markets such as China.

— USDA awards additional $35 million in fertilizer production grants. USDA awarded another $35 million in grants under its Fertilizer Production Expansion Program (FPEP), bringing total investments to $286.6 million since January 2023. The program, funded by the Commodity Credit Corporation, aims to boost domestic fertilizer production by supporting independent businesses in modernizing equipment, implementing new technologies, and building new facilities. Recent grant recipients include Dramm Corp in Wisconsin and AdvanSix in Virginia, with projects in several states including California, Iowa, and New York. Link to a list of grant winners.

— Understanding the delay in ARC and PLC payments: A timeline breakdown. A Southern Ag Today article (link) notes that the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, crucial for U.S. farmers, typically issue payments over a year after harvest. This delay results from the need to calculate payments based on the national average price over the marketing year, which ends months after harvest. The payment timeline, established in the 2008 Farm Bill, was designed to push payments into the next fiscal year, freeing up budget resources.

SAT says the problem is that reversing this would result in another fiscal year of ARC/PLC assistance having to be provided by the existing farm bill budget. While complicated, it is simply a matter of policymakers deciding if it is better to use scarce resources to (1) accelerate the timing of payments or (2) make programmatic improvements like increasing reference prices. Over the last two farm bill cycles, policymakers have opted for leaving the timing alone and making programmatic improvements instead.

The more acute concern is this: even if Congress passes a new farm bill this fall (in time for the 2025 crop year), under current ARC and PLC payment timelines, producers will not see any assistance until after October 1, 2026 (the first month of fiscal year 2027).

Bottom line: The article concludes by noting that given growing concerns about the state of the farm economy, even with a new farm bill in place, there undoubtedly will be tremendous pressure on Congress.

(Southern Ag Today )

— Former GOP press secretary and communications director Paige Lindgren will take over as director of public affairs for biofuels producer Poet. Lindgren has worked for several Republican members of Congress and was previously deputy press secretary for the National Republican Senatorial Committee.

— China likely to miss 2024 growth target amid economic slowdown, UBS cuts forecast. Economists are increasingly doubtful that China will meet its 2024 growth target of around 5%, as economic momentum slows due to a real estate downturn and tight fiscal policies. UBS Group AG has downgraded its forecast for China’s GDP growth to 4.6% for this year, down from 4.9%, and expects 4% growth in 2025. This reflects a broader consensus among major banks, with many projecting growth under 5%. Despite weak consumer spending and declining confidence, China’s Politburo remains committed to its economic goals.

— China’s energy majors report strong exploration profits, but oil demand weakens. China’s energy giants, including Cnooc, Sinopec, and PetroChina, reported strong exploration profits, reflecting the nation’s energy security priorities. However, refining profits tumbled, making it one of the worst-performing sectors in the industrial economy. China’s oil imports dropped by 2.4% in the first seven months of 2024, the first decline in almost two decades outside of the Covid-19 period. Contributing factors include record domestic crude production, the rise of electric vehicles, and a sluggish economy that has shifted focus from traditional infrastructure projects to consumer-driven, high-tech growth. Electric vehicles and trucks powered by natural gas are set to displace 10% to 12% of gasoline and diesel demand this year, according to China National Petroleum Corp. This weakening demand poses challenges for global oil consumption.

(General Admin. of Customs, Bloomberg)

— Reuters: U.S. gov’t funding yielded hundreds of patents for China-based researchers. The U.S. Defense Department, NASA and other government agencies funded research that led to more than 1,000 U.S. patents for China-based inventors since 2010, including in sensitive fields such as biotechnology and semiconductors, data from the U.S. patent agency that was viewed by Reuters showed. The agency granted 1,020 patents from 2010 through the first quarter of 2024 that were both funded at least in part by the U.S. government and involved at least one China-residing inventor. The data does not detail whether U.S. entities or individuals share the patents. The patents included 197 in pharmaceuticals and 154 in biotechnology.

— China’s cross-border renminbi use hits record high amid closer ties with Russia. China’s use of the renminbi in cross-border transactions has surged to record levels this year, reaching 53% in July, up from 40% in 2021. This increase is driven by closer ties with Russia, following U.S. sanctions, and Beijing’s efforts to internationalize its currency while reducing dependence on the U.S. dollar. Despite these gains, the renminbi remains far behind the dollar in global trade finance, and its broader adoption is limited by China’s capital controls and the dollar’s dominance. Experts suggest China seeks greater financial autonomy rather than to challenge the dollar’s global supremacy. Link to more via the Financial Times.

— China will not impose anti-dumping measures on EU brandy, for now. Beijing said on Thursday it would not impose provisional tariffs on brandy imported from the European Union despite finding it had been sold in China below market prices, giving both sides room to breathe in tense trade talks. Link to more via Reuters.

— Tracking China’s control of overseas ports. The China Overseas Ports interactive visualizes degrees of China’s overseas port ownership by types of investment across regions and time. Link to see the visual via the Council on Foreign Relations.

(Council on Foreign Relations)

— Sen. Boozman criticizes Biden/Harris administration for record agricultural trade deficit. Senate Ag Ranking Member John Boozman (R-Ark.) criticized the Biden/Harris administration following a USDA report projecting a record agricultural trade deficit of $42.5 billion for fiscal year 2025. Boozman accused the administration of failing to maintain the U.S.’ competitive advantage in global agriculture markets and called for more robust trade promotion efforts. He urged Congress to pass a new farm bill that increases funding for key USDA trade programs, emphasizing the need for stronger advocacy for American farmers on the world stage.

(Senate Ag Committe GOP, USDA)

— Yellen urged to release biofuel tax credit guidance by Sept. 1 amid industry uncertainty. The Clean Fuels Alliance America has called on Treasury Secretary Janet Yellen (link) to issue guidance on the 45Z clean fuel tax credit, including safe harbor provisions, by Sept. 1. The biodiesel, renewable diesel, and sustainable aviation fuel industries are experiencing difficulties securing contracts and capital due to the lack of clarity on the credit, which is set to take effect on Jan. 1. The group emphasizes the urgent need for policy certainty to stabilize the market and meet project deadlines. The Treasury Department has not yet responded to the request.

Background: The Section 45Z tax credit was introduced as part of the Inflation Reduction Act (IRA/Climate Act) of 2022. It is designed to be technology-neutral, rewarding fuels that achieve significant reductions in lifecycle greenhouse gas emissions compared to traditional petroleum fuels. The credit can reach up to $1 per gallon for non-aviation fuels and $1.75 per gallon for aviation fuels, with additional incentives for further emissions reductions.

To qualify for the credit, producers must register with the IRS by obtaining a signed registration letter by Jan. 1, 2025. This registration is crucial as it confirms the producer’s eligibility for the tax credit. The Treasury Department and IRS have issued some guidance, including the registration process, but have not yet provided comprehensive details on the emissions rate tables or other critical aspects of the credit.

The delay in issuing this guidance has prompted calls from industry groups and lawmakers for expedited action. They argue that without clear rules, the ability to secure contracts and make necessary investments is hindered, potentially disrupting project timelines and threatening the market for low-carbon fuels. The Treasury Department has not yet responded to these requests for accelerated guidance issuance.

— Maersk CEO Vincent Clerc called on the Biden administration to make the incentives for sustainable trucking and aviation fuels provided by the Inflation Reduction Act available to maritime fuels, too. He also urged the UN’s International Maritime Organization to adopt emissions standards and pricing mechanisms for maritime fuels that would level the playing field across the industry. For now, the extra cost of green methanol and other alternative fuels is passed on to customers who opt to pay a surcharge of 15% to 20% per container, said Charles van der Steene, Maersk’s president of North America.

— FAA grants boost sustainable aviation fuel development in Georgia. The Federal Aviation Administration has awarded nearly $3.4 million in grants to support sustainable aviation fuel (SAF) initiatives in Georgia. LanzaJet will receive $3.1 million to develop a new SAF production facility in Soperton, while $240,000 will go to Hartsfield-Jackson Atlanta International Airport to enhance regional SAF supply chains. SAF, a biofuel that can reduce greenhouse gas emissions by up to 85%, represents a new market for Georgia’s timber industry and a key component in aviation’s push toward decarbonization. “SAF is the best opportunity aviation has to decarbonize,” LanzaJet CEO Jimmy Samartzis added. “Funding like this will be instrumental in achieving aviation’s net zero targets while also supporting domestic energy security and economic development by investing in rural communities across the country.”

Of note: Europe is leading the way in deploying SAF. The European Union will require commercial aircraft to burn at least 6% SAF by 2030, a percentage that will increase gradually each year until it reaches 70% in 2050. Details: Starting in 2025, 2% of all aviation fuel used at EU airports must be sustainable. This percentage is set to increase to 6% by 2030, 20% by 2035, and eventually 70% by 2050.

The United States does not currently have a federal mandate requiring the use of SAF in aviation. Instead, the U.S. government has adopted a strategy based on incentives to encourage the production and use of SAF. This approach includes tax credits and subsidies aimed at reducing the cost of SAF and promoting its adoption by airlines and fuel suppliers. The Inflation Reduction Act provides significant tax credits for SAF producers. These credits range from $1.25 to $1.75 per gallon, depending on the lifecycle greenhouse gas emissions reduction achieved by the SAF compared to conventional jet fuel. Launched by the Biden administration, this initiative aims to produce at least 3 billion gallons of SAF per year by 2030. The goal is to reduce aviation emissions by 20% by 2030 and to eventually meet 100% of aviation fuel demand with SAF by 2050. Some U.S. states have their own programs that support SAF. For example, California’s Low-Carbon Fuel Standard allows SAF to generate credits, although it does not penalize the use of conventional jet fuel.

— USDA announced plans to conduct field trials for vaccines aimed at preventing avian influenza (H5N1) from infecting dairy cows. While four vaccines are licensed for avian influenza, none are approved for the current strain. USDA’s trials, which began in April, are still in progress, with the agency considering next steps, including vaccine production if successful. Concerns include the rapid mutation of the virus, potential vaccine efficacy, and the risk of losing export markets due to difficulty distinguishing vaccinated from infected birds. USDA stresses biosecurity as the primary defense against the outbreak.

USDA’s Center for Veterinary Biologics is now accepting submissions for field studies that could lead to conditional or full licensure of nonviable, non-replicating vaccines. This marks a shift from previous requirements that all studies, even those not involving virus challenges, be conducted in containment facilities.

Besides traditional vaccine development, there is also interest in mRNA vaccines, similar to those used for Covid-19, which are being tested for their efficacy in both animals and humans.

— USDA seeks feedback on tech-enhanced inspections and meat plant categorization changes. USDA is convening a virtual meeting of the National Advisory Committee on Meat and Poultry Inspection (NACMPI) on Sept. 16-17 to gather input on leveraging technology for inspections and potential changes in categorizing meat and poultry plants. USDA aims to assess whether changes in plant categorization by size could improve the evaluation of business operations and the impact of regulations. The committee will also explore ways to enhance inspections using technology. Subcommittees will discuss these topics and provide recommendations to USDA during the meeting.

— USDA tightens guidelines for animal-raising and environmental claims on meat labels. USDA’s Food Safety and Inspection Service (FSIS) has issued stricter guidelines for substantiating animal-raising and environmental claims on meat and poultry labels, such as “raised without antibiotics,” “grass-fed,” and “climate-friendly.” The new guidelines encourage meat and poultry establishments to provide more documentation, including third-party certification or USDA audit-based programs, to back up their claims. FSIS also highlighted the need for relevant environmental data and warned of enforcement action against false or misleading antibiotic claims, following a study that found 20% of cattle labeled “raised without antibiotics” had detectable antibiotic residues. Further testing and potential rulemaking may follow. Link to an advance copy of the Federal Register notice on the revised USDA guideline. Link to the 32-page guideline.

— Supreme Court maintains block on Biden’s student loan relief plan amid legal battles. The Biden administration’s student loan debt relief initiative, the Saving on a Valuable Education (SAVE) plan, faces significant legal challenges after the Supreme Court declined to lift a block imposed by a federal appeals court. Introduced in July 2023, the SAVE plan seeks to reduce monthly payments by tying them to income and household size. Republican-led states have contested the plan, arguing it exceeds the Department of Education’s authority and could be costly. While 8 million borrowers are enrolled and currently in interest-free forbearance, the program’s future remains uncertain as legal battles continue. The Biden administration remains committed to defending the plan despite the Supreme Court’s recent decision.

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