House GOP Farm Bill Coming in Mid-April, But Uncertain Fate in Any House Floor Vote

U.S. trade deficit widens | U.S. beef tariff quota filled | SPR filling stopped | Impact of EU farmer protests

MARKET FOCUS

• Powell reaffirms Fed will stick to wait-and-see approach on interest rates
• Fed’s Bostic: Rates should likely not be reduced until the fourth quarter this year
• U.S. trade deficit largest shortfall in nearly a year
• Economic landscape in Europe and U.S. witnessing divergence in inflation trends
• Business activity in the Eurozone grew last month for first time in nearly a year
• Eurozone PPI falls more than expected
• Egypt, typically LNG exporter, initiates purchases of LNG
• Panama Canal facing limitations in daily crossings due to severe drought
• Ag markets today
• USDA daily export sale: 152,404 MT soybeans to Mexico during MY 2023-2024
• Ag trade update
• NWS weather outlook

BALTIMORE BRIDGE COLLAPSE

• Logistics constraints: ‘Probably a three- to six-month problem’
• Efforts to locate and reroute shipments to other ports are underway
• Significant logistics operation underway to mitigate impact on supply chains
• Baltimore’s spending board approves $1 million transfer of funds to civic fund
• Chinese cargo owners may face huge bill after Baltimore bridge collision

ISRAEL/HAMAS CONFLICT

• Defense Secretary Lloyd Austin criticizes Israel
  

RUSSIA & UKRAINE

• Russian grain trader Aston denies shipments halted
  

POLICY

• Farm bill update from Dr. Joe Outlaw
  

CHINA

• Muted activity in most recent week for new U.S. ag export sales to China
• Treasury Secretary Janet Yellen arrives in Guangzhou, aiming to stabilize relations
• China to limit steel output as prices slide and demand falls
  

TRADE POLICY

• U.S. beef tariff quota filled; limit hit 2 months earlier than LY as Brazil steps up exports
• EU and U.S. officials seek trade and tech alignments that might survive a Trump return
  

ENERGY & CLIMATE CHANGE

• White House launches $20 billion Climate Kickstarter program
• USDA allocates $1.5 billion for climate-smart ag conservation
• Key takeaways from Resources for the Future’s Global Energy Outlook
  

LIVESTOCK, NUTRITION & FOOD INDUSTRY

• Is there a better way to deal with continued bouts of bird flu?
• NYT: Is giving farmers millions to kill millions of chickens the way to curb bird flu?
• CDC: H5N1 bird flu in dairy cattle poses low risk to humans
• USDA’s FSIS maintains recall information collection: no changes proposed
  

HEALTH UPDATE

• Recipient of world’s first pig kidney transplant heading home
  

POLITICS & ELECTIONS

• Cook Political Report changes rating on Nevada Senate contest to ‘toss up’
• Over 8% of Wisconsin Democrats voted “uninstructed” in state’s primary
• Canadian politicians were targeted by China in 2021: report
  

OTHER ITEMS OF NOTE

• ITC hearing today on 2, 4-D tariff petition
• EU farmer protests

— Equities today: U.S. Dow opened up around 275 points. Asian stocks rose after Jerome Powell reaffirmed the Fed will probably cut rates this year. Japan’s benchmark Nikkei Stock Average jumped as the market realized that individuals’ interest in buying stocks through a revamped tax-free program is stronger than expected. The average closed at 39,773.14, up 321.29, or 0.81%, from Wednesday’s closing. It was up 791.47, or 2.01%, at one point, but gradually trimmed its gain. Markets in Hong Kong, mainland China and Taiwan were closed for a holiday. In Asia, Japan +0.8%. Hong Kong closed. China closed. India +0.5%. In Europe, at midday, London +0.4%. Paris +0.2%. Frankfurt +0.2%.

U.S. equities yesterday: U.S. stock indices ended mixed, with the Dow slightly lower and the Nasdaq and S&P 500 registering modest gains. The Dow was down 43.10 points, 0.11%, at 39,127.14. The Nasdaq rose 37.01 points, 0.23%, at 16,277.46. The S&P 500 was up 5.68 points, 0.11%, at 5,211.49.

— Ag markets today: Corn, soybeans and wheat posted light, two-sided trade overnight but have adopted a slightly firmer tone this morning. As of 7:30 a.m. ET, corn futures were trading fractionally to a penny higher, soybeans were 1 to 2 cents higher, SRW wheat was fractionally to a penny higher, HRW wheat was 3 to 5 cents higher and HRS wheat was 5 to 8 cents higher. Front-month crude oil futures were near unchanged, and the U.S. dollar index was more than 150 points lower this morning.

Wholesale beef prices fall, movement stays strong. Wholesale beef prices fell further Wednesday with Choice down another $2.86 and Select $2.07 lower. Wednesday’s movement totaled 151 loads, continuing recent strong retailer demand, though packers have continued to slash prices despite reduced slaughter runs and beef output.

Pork cutout weakens, demand remains tepid. The pork cutout value fell $2.30 on Wednesday as all cuts posted sizable declines. While movement improved to 274.6 loads, retailer buying has been tepid, suggesting they are being selective buyers with the cutout in the mid- to upper-$90.00 range.

— Agriculture markets yesterday:

• Corn: May corn futures rose 5 1/4 cents to $4.31 3/4 and nearer the session high.
• Soy complex: May soybeans rose 8 1/4 cents to $11.82 1/4, nearer the session high after hitting a three-week low early on. May soybean meal gained $1.70 at $330.00, nearer the session high and hit a four-week low early on. May bean oil closed up 25 points at 48.85 cents and near mid-range.
• Wheat: May SRW wheat rose 10 3/4 cents to $5.56, while HRW rallied 17 1/4 cents to $5.80 1/2. Each closed near session highs. May HRS closed up 12 cents at 6.39 1/2.
• Cotton: May cotton fell 183 points to 88.98 cents, near the session low and hit a near two-month low.
• Cattle: After dipping to fresh two-month lows, nearby fed cattle future ended Wednesday slightly above the midpoint of the daily range. Nearby April cattle sank 85 cents to $180.925, while most-active June sagged 77.5 cents to $175.60. Feeders remained under downward pressure, with the expiring April contract dropping $2.55 to $240.95 and May falling $2.275 to $252.575.
• Hogs: June lean hog futures surged $1.025 to $104.75, while nearby April futures jumped $1.425 to $87.975.
  

— Quotes of note:

• Federal Reserve Chair Jerome Powell reaffirmed on Wednesday the central bank’s intention to cut interest rates this year, despite the recent surge in economic activity, attributing the decision to the expectation of declining inflation. Powell highlighted indicators suggesting that the labor market is less constrained than in previous years, alleviating concerns of simultaneous increases in wages and prices.

  Although there were signs of stronger inflation in January and February, Powell asserted that the Fed remains confident that inflation will continue to decrease over time, albeit with occasional fluctuations. He emphasized that the overall economic landscape remains one of steady growth, a robust but adjusting labor market, and inflation trending towards the 2% target. Following a period of rapid rate hikes aimed at combating elevated inflation, the Fed has maintained its benchmark short-term rate between 5.25% and 5.5% since July. However, with underlying inflation cooling notably since mid-2023, the focus has shifted towards potential rate cuts to support the economy.

  Despite projections indicating at least three rate cuts this year, Fed officials are cautious not to ease monetary policy excessively, aiming to strike a balance between controlling inflation and preventing an economic slowdown.

  While some argue that strong growth and hiring suggest monetary policy isn’t restrictive, Powell disagreed, attributing the economic expansion to factors like improved supply chains and increased workforce participation, rather than a misalignment in monetary policy.

  Additionally, Powell downplayed discussions about the neutral interest rate, asserting that the current policy setting remains well above even the highest estimates of the neutral rate, rendering its precise value inconsequential for present policy decisions.
  

• Atlanta Fed President Raphael Bostic said rates should likely not be reduced until the fourth quarter of this year, according to his comments to CNBC on Wednesday. There’s this kind of yin and yang data scenario where you have some strong data that has some good-news-is-bad-news feel to it,” said James St. Aubin, chief investment officer at Sierra Investment Management in California.
  
• Worst-case scenario for investors, according to economists at Bank of America: “Job growth of 250k+, stronger-than-expected wage growth, and a fall in the unemployment rate would likely further price out the chance of a June cut,” they wrote in a research note this week.
  
• “This is probably a three- to six-month problem. But it’s going to be a heck of a three- to six-month problem.” — Brian Webb of NFI Industries, on logistics following the Baltimore bridge collapse.
  

— The economic landscape in Europe and the U.S. is witnessing a divergence in inflation trends, with inflation decreasing in Europe but surpassing expectations in the U.S. This contrast has led investors to anticipate that the European Central Bank (ECB) might reduce interest rates sooner than the Federal Reserve.

Inflation numbers. Eurozone inflation has declined to 2.4% in the year to March, nearing the ECB’s 2% target, while US inflation has consistently exceeded forecasts, with the headline metric used by the Federal Reserve rising to 2.5 percent in February.

Differences ahead. While investors anticipate fewer rate cuts from the Federal Reserve due to high U.S. inflation, they predict the ECB will adopt a more aggressive policy easing stance.

Caveat. Despite encouraging inflation data in the eurozone, the ECB might delay rate cuts due to concerns about elevated services prices and a desire to avoid a stark divergence with the Federal Reserve. The ECB’s decision could be influenced by various factors, including the need to monitor underlying domestic inflation and avoid market disruptions that could lead to inflationary pressures.

— Business activity in the Eurozone grew last month for the first time in nearly a year. A composite purchasing managers’ index rose to 50.3 in March, from 49.2 in February (a reading above 50 denotes expansion). Growth in the services sector largely explains the rise. Still, a survey published on Tuesday showed that manufacturing remained in decline.

— Eurozone PPI falls more than expected. Producer prices in the Eurozone declined 1% month-over-month in February, following a 0.9% drop in January, and compared to forecasts of a 0.7% fall. It is the biggest decrease in PPI in nine months, due to lower energy prices. Year-on-year, producer prices were down 8.3%.

Market perspectives:

— Outside markets: The U.S. dollar index was weaker, with the euro and yen both firmer against the greenback. The yield on the 10-year U.S. Treasury note was weaker, trading around 4.37%, with a mixed tone in global government bond yields. Crude oil futures shifted lower, with U.S. crude around $85.20 per barrel and Brent around $89.20 per barrel. Gold and silver were under pressure ahead of economic data, with gold around $2,305 per troy ounce and silver around $27.03 per troy ounce.

— Egypt, typically a liquefied natural gas (LNG) exporter, has initiated purchases of LNG to avert potential shortages during the summer season. Egyptian Natural Gas Holding Co. has secured at least one shipment for delivery in the coming month and is actively seeking additional purchases, according to traders familiar with the situation.

— The Panama Canal, a crucial trade route, is facing limitations in daily crossings due to a severe drought. This could potentially disrupt global supply chains at a time of heightened demand, as noted by S&P Global in a report. Despite recent adjustments to increase daily crossings, the canal’s capacity constraints are starting to impact supply chains. Container ships, which hold priority status, are not yet significantly affected, but other vessel categories, notably bulk carriers, are feeling the strain. The situation may improve if rains return as expected in May, allowing the canal authority to increase daily slots. However, maintaining water levels at the reservoirs feeding into the canal has been a challenge, preventing the canal from fully accommodating demand, especially from shippers seeking alternative routes due to disruptions in the Suez Canal caused by Houthi attackers.

— USDA daily export sale: 152,404 MT soybeans to Mexico during MY 2023-2024.

— Ag trade update: Japan purchased 113,535 MT of milling wheat via its weekly tender, including 57,890 MT U.S., 25,300 MT Canadian and 30,345 MT Australian. Indonesia tendered to buy 300,000 MT of 5% broken white rice from unspecified origins.

— NWS weather outlook: Heavy snow over Upstate New York, Northern New England, the Sierra Nevada Mountains, and Central Appalachians on Thursday... ...Moderate to heavy snow over the Northern Intermountain Region on Friday... ...Temperatures will be 10 to 20 degrees below average over parts of the Ohio Valley.

— Efforts to locate and reroute shipments to other ports are underway, with estimates suggesting a weekly trade impact of around $1.7 billion. Major container shipping lines have declared force majeure, indicating that they won’t cover the added transport costs to alternate ports. As a result, shippers and logistics operators are facing increased transportation expenses (see next item for more).

Automotive and heavy machinery industries are particularly affected, with car carriers and manufacturers experiencing disruptions and financial losses. For instance, Norway’s Wallenius Wilhelmsen estimates potential losses of $5-10 million if disruptions persist for a month. Japanese manufacturer Kubota is redirecting shipments to the Port of Virginia, incurring significantly higher trucking costs.

The closure of the shipping channel has also led to traffic diversions and increased costs for truckers, affecting their routes and fuel expenses. Overall, the impact is expected to persist for several months, posing significant challenges to the affected industries and supply chains.

— A significant logistics operation is underway to mitigate the impact of the Baltimore bridge disaster on supply chains. Global automakers, local truckers, and various shippers are all adjusting their operations to navigate around the disruption. The Wall Street Journal reports (link) that freight forwarder OL-USA and other companies are establishing new transportation routes out of Baltimore while awaiting updates on containers stranded on the damaged containership Dali. Auto transporter Wallenius Wilhelmsen anticipates financial losses due to the closure of a vital hub, while another terminal outside the affected area prepares for diverted car carriers. Some container lines have declared force majeure, absolving them from covering shippers’ additional transport expenses. Authorities report extensive wreckage in the water, with no timeline for reopening the shipping channel.

— Baltimore’s spending board approved a $1 million transfer of funds to the civic fund. This money will be utilized to assist workers impacted by the bridge collapse. The funds will be distributed to employers who have city residents on their payroll whose jobs have been affected by the collapse, with an initial allocation estimated to assist around 130 workers. Mayor Brandon Scott stated that the subsidies will be similar to those offered during the Covid-19 pandemic and will be administered by the Mayor’s Office of Employment Development along with the Baltimore Civic Fund. Each eligible company can receive up to $22,500 based on the number of affected employees.

— Chinese cargo owners may face huge bill after Baltimore bridge collision. Cargo owners may be liable for some of the estimated $4 billion compensation if ship owner declares ‘general average’. Link for details.

— U.S. Defense Secretary Lloyd Austin criticized Israel after an air strike killed seven aid workers in Gaza. Austin also said that the deaths showed the risks of launching an offensive on Rafah, a southern city in the enclave where about 1.5 million Palestinians are sheltering. America has warned against the operation owing to concerns over the evacuation of civilians and delivery of aid. But Israel’s prime minister, Binyamin Netanyahu, has insisted the offensive will go ahead. Earlier Benny Gantz, a member of the country’s war cabinet, called for early elections, piling more pressure on Netanyahu.

— Russian grain trader Aston denies shipments halted. Russian authorities have halted grain exports on some ships belonging to Aston, two industry sources told Reuters. The company denied there were delays. In a statement, Aston said its export program was being implemented in line with plans agreed with partners, and there were no changes to the schedule of product shipments from sea and river ports. Aston added it was fulfilling its obligations in full and on time, saying it was coordinating closely with authorities and other interested parties. “The requirements of Rosselkhoznadzor and quarantine requirements of importing countries are fully observed,” Aston said.

— A farm bill update from Dr. Joe Outlaw of Texas A&M Agricultural and Food Policy Center (AFPC). Tyne Morgan reports the following along with our observations:

• Outlaw says the House Ag Committee is expected to unveil its version of the farm bill in mid-April (we assume this year). In the past, sources have said the Ag panel would consider the chairman’s mark two weeks after being released.
• Birthing timeline. Outlaw says if you look back at history, the quickest (a word not usually used when talking about Congress) that a farm bill has even been released from committee and then signed by the president, is nine months. Which means even if we see a farm bill mid-April, it’s unlikely we will see a farm bill passed in 2024.
• The House GOP farm bill version is expected to include an increase in reference prices, as well as other key changes (crop insurance program improvements, back-end loading of trade promotion funding for MPP and FMD, and biosecurity funding). We have previously cited sources as saying the reference price increases would be variable, higher for some crops, lower for others.
• Where’s additional farm bill funding coming from? While Joe wouldn’t give a clear answer, it appears the House Ag Committee staff was very creative in finding these funds. Outlaw mentioned the CCC (but didn’t go into detail). We have recently reported that it appears $40 billion to $50 billion in additional funding beyond the farm bill baseline has been found via SNAP changes (a complete no-no for Democrats), some tweaks to conservation funding (a no-no for Senate Ag Chair Debbie Stabenow, D-Mich.) if it moves away from climate-smart practices funding), and some tapping of USDA’s CCC (with some “guard-rail language limiting USDA’s authority in tapping such funding).

Comments: The system of getting a new farm bill written and released needs to be reformed. And that includes all the time panel members take going out to farm country and hearing what farmers want, despite not knowing the costs of all those wish lists or total funding available and if additional funding can be found. It’s a joke to say a new farm bill is further along than most think. Further along? Than what? Even after we get a House farm bill, and a different Senate farm bill “soon” after, the question will eventually turn to can any House farm bill garner enough votes. And that includes more than a few nay votes from House GOP conservatives who have suddenly started to worry about deficits and debt. If the House GOP farm bill touches SNAP in any way (funding or policy nuances), that’s a red line for Democrats. If so, the fate of the farm bill will be like immigration reform: later, not sooner.

— Muted activity in most recent week for new U.S. ag export sales to China. Export sales activity for China the week ended March 28 showed tempered new sales levels of U.S. ag commodities with most of the activity reflecting sales that had previously been announced as being to unknown destinations being shifted to China. Activity for 2023-24 included net sales of 74,750 metric tons of wheat (new sales of 9,831 metric tons), 70,383 metric tons of corn 5,383 metric tons of new sales), 11,424 metric tons of sorghum (all new sales), 153,850 metric tons of soybeans (11,734 metric tons of new sales), and 35,350 running bales of upland cotton (new sales of 36,731 running bales). For 2024, activity included net sales of 852 metric tons (new sales of 1,102 metric tons) and 843 metric tons of pork (952 metric tons of new sales).

— Treasury Secretary Janet Yellen arrives in Guangzhou, aiming to stabilize relations with China while addressing concerns over industrial overcapacity that affects the global economy. The U.S. and Europe are increasingly wary of Chinese policies that promote the export of surplus industrial products, including electric cars and solar panels, which undercut their own industries. Recent data from China indicates a significant increase in outstanding loans to the industrial sector, reaching $3 trillion by December 2023, up 28% from the previous year.

Yellen is expected to convey to China the U.S.’ readiness to enact a stronger policy response before the 2024 presidential election, possibly including measures to support clean energy sectors (see related item below). She highlighted concerns over Chinese investments creating overcapacities in areas such as solar cells and electric vehicles, impacting countries worldwide.

Chinese President Xi Jinping warned President Joe Biden against measures to contain China’s trade and technological development. Beijing defended its export growth in green energy sectors as meeting market demand and accused the U.S. of creating risks by trying to suppress China.

China watcher Bill Bishop suggests Beijing may argue that Western nations have historically explored new markets, but when China does so, it is framed as an overcapacity problem, undermining China’s development.

Yellen’s agenda. In Guangzhou, she will meet with Chinese Vice Premier He Lifeng and other officials, along with American business representatives. Her itinerary also includes talks in Beijing with Premier Li Qiang, Finance Minister Lan Fo’an, and central bank Governor Pan Gongsheng before returning to the U.S. on Tuesday. Secretary of State Antony Blinken is expected to follow up with a visit to China later.

— China to limit steel output as prices slide and demand falls. Authorities to foster industry strengths and weed out weak players to promote the structural adjustment of steel industry. Link for details.

— U.S. beef tariff quota filled; limit reached two months earlier than last year as Brazil steps up exports. In the United States, the quota for low-tariff beef imports for this year was filled by the end of February, marking the quickest fill-up since 2020. Brazil and Japan were swift in claiming their shares as suppliers.

With the import quota filled, imports for the remainder of the year will now face significantly higher tariffs. This could pose challenges for Japan in increasing exports of its premium wagyu beef, according to Nikkei Asia. The import quota, which resets annually on Jan. 1, reached its 65,005-tonne limit and closed on Feb. 27. Japanese trade statistics indicated that beef exports to the U.S. in January and February totaled 324 tonnes, showing a 24% increase compared to the previous year. This growth was consistent and supported by the devaluation of the yen.

Background: The U.S. imposes limits on the volume of goods it imports from other countries at low tariffs to safeguard domestic industries. Until 2019, Japan had its own beef quota of 200 tonnes. However, since 2020, Japan, along with several other countries, has had access to a system where they can export up to a collective limit of 65,005 tonnes at a tariff rate of 4.4 cents per kilogram. This shared quota lacks specific caps for individual countries or regions, operating on a first-come, first-served basis, resulting in intense competition.

What happened, according to Nikkei Asia. To secure a position early in line, a company in Japan’s Kansai region shipped wagyu beef to the U.S. in early December, arriving just before the new year. Brazil also shipped beef to the U.S. before the turn of the year, capitalizing on the U.S.’ rising inflation by marketing its low-priced beef aggressively. Consequently, Japan and Brazil utilized the tariff quota within the first two months of the year, earlier than in 2023.

While Brazilian beef is commonly found in American supermarkets, Japanese wagyu is typically sold in high-end restaurants. Despite differing markets and consumer bases, both fall under the same “beef” category according to U.S. import regulations.

Outlook: The filling of the quota means that beef imports will now be subjected to a 26.4% tariff. For instance, the tariff on 1 kilogram of wagyu loin with a 10,000-yen ($66) export price will increase from 6.6 yen to 2,640 yen. The high-priced Japanese wagyu is expected to encounter difficulties in the U.S. market, even with a weakened yen. After the quota was filled last year on May 2, exports rapidly declined, suggesting a potential decrease in Japanese beef exports from March this year. Japanese exporters have plans to enhance efforts in areas such as Taiwan and Hong Kong.

— EU and U.S. officials seek trade and tech alignments that might survive a Trump return. Trade and Technology Council meeting, which begins Thursday, aims for agreements that would remain attractive to the former U.S. president, should he be re-elected. Link for more via the South China Morning Post.

— White House launches $20 billion Climate Kickstarter program aimed at incentivizing private investment in clean technology. The initiative will distribute grants to eight recipients under the greenhouse gas reduction fund, with a focus on reducing up to 40 million metric tons of climate pollution annually. At least 70% of the funding will target low-income and disadvantaged communities, with an additional 20% allocated to rural areas. Recipients include nonprofit financing institutions and hubs delivering funding and technical assistance to community lenders. The program, part of the Biden administration’s climate plan, has faced opposition from Republicans who criticize it as a partisan agenda.

— USDA allocates $1.5 billion for climate-smart ag conservation. USDA allocated $1.5 billion in fiscal year 2024 to support conservation and climate-smart agriculture initiatives through the Regional Conservation Partnership Program (RCPP). These investments aim to assist farmers, ranchers, and forest landowners in adopting and expanding conservation strategies to improve natural resources while addressing climate change. USDA says the funding will help farmers save money, generate new revenue streams, and enhance productivity.

This funding is part of the Inflation Reduction Act (Climate Bill), which is considered the largest climate investment in history. USDA’s Natural Resources Conservation Service (NRCS) will administer the program, with efforts to simplify and streamline the RCPP process for better implementation.

There are two funding opportunities: RCPP Classic and RCPP Alternative Funding Arrangements (AFA). RCPP Classic projects involve NRCS contracts and easements with producers, landowners, and communities in collaboration with partners. RCPP AFA allows the lead partner to work directly with agricultural producers to develop innovative conservation approaches. Additionally, $100 million will be set aside for Tribal-led projects.

Of note: The $1.5 billion is up from $500 million in funding last fiscal year. Also, NRCS wants to reduce project negotiation time to six months (from 15 months) this year. That is before Nov. 5 elections.

— Here are key takeaways from the Resources for the Future’s Global Energy Outlook (link) as identified by the Financial Times (edited):

• Fossil fuels are projected to remain significant until at least the middle of the century, even in scenarios aligned with climate goals of limiting global warming to 1.5°C or 2°C. Complete phaseout of fossil fuels may not be necessary to achieve these goals.
• Carbon capture technologies will play a crucial role in mitigating emissions from fossil fuels. However, there is a significant need for scaling up these technologies, raising concerns about cost and incentivizing continued reliance on oil and gas.
• Meeting renewable energy targets set at COP28 will require substantial annual capacity additions, far exceeding current levels, with only a few scenarios achieving this goal.
• The goal of tripling nuclear capacity by 2050, as set at COP28, is highly ambitious and would require a significant reversal of current trends in nuclear power deployment.
• The future of natural gas remains uncertain, with divergent projections ranging from continued growth to a significant drop-off in demand by 2050. This reflects the ongoing debate over the role of gas in the energy transition.

— Is there a better way to deal with continued bouts of bird flu? That is what some observers are asking. Last year, USDA paid poultry producers more than half a billion dollars for the turkeys, chickens and egg-laying hens they were forced to kill after the flu strain, H5N1, was detected on their farms. Officials say the compensation program is aimed at encouraging farms to report outbreaks quickly. That’s because the government pays for birds killed through culling, not those that die from the disease. Early reporting, the agency says, helps to limit the virus’s spread to nearby farms. Link for details.

But a recent New York Times article (link) asks: Is Giving Farmers Millions to Kill Millions of Chickens the Way to Curb Bird Flu? It says the method of culling, which often involves raising temperatures in barns to induce heat stroke in thousands of birds, has drawn criticism from veterinarians and animal welfare organizations for causing unnecessary suffering. The concentration of government payments to large food corporations underscores the dominance of corporate entities in the meat and egg production industry. Critics argue that these payments perpetuate problematic farming practices by not holding commercial farmers accountable for the risks of contagion associated with intensive farming methods.

— CDC: H5N1 bird flu in dairy cattle poses low risk to humans. Samples of the H5N1 bird flu virus that has infected dairy cattle and a dairy worker retain avian genetic characteristics and “for the most part lack changes that would make them better able to infect mammals,” said the Centers for Disease Control and Prevention in a technical update (link). “The overall risk to human health associated with the ongoing HPAI A(H5) outbreaks in poultry and detections in wild birds and cattle remains low,” said the CDC. The CDC used genetic sequencing to compare samples from the Texas dairy worker, cattle, and wild birds. “While minor changes were identified in the virus sequence from the patient specimen compared to the viral sequences from cattle, both cattle and human sequences maintain primarily avian genetic characteristics and for the most part lack changes that would make them better adapted to infect mammals,” said the technical update. The CDC found one change in the sample taken from the dairy worker “that is known to be associated with viral adaptation to mammalian hosts, and which has been detected before in people … but with no evidence of onward spread among people.”

“CDC and the whole U.S. government is taking this situation very seriously,” said CDC director Mandy Cohen in a Washington Post interview (link). “We had not seen avian flu in cattle prior to last week. That is new. It’s a reservoir for virus to circulate and potentially change.”

— USDA’s FSIS maintains recall information collection: no changes proposed. USDA’s Food Safety and Inspection Service (FSIS) announced its intention to maintain an approved information collection concerning voluntary recalls of meat, poultry, and egg products from commerce. FSIS does not propose any alterations to the existing information collection (link). The current approval is valid until Sept. 30, 2024, and comments on the notice are due by June 3. This routine procedure falls under the authority granted to FSIS through the Federal Meat Inspection Act (FMIA), Poultry Products Inspection Act (PPIA), and the Egg Products Inspection Act.

— Recipient of the world’s first pig kidney transplant is heading home from Massachusetts General Hospital Wednesday, nearly two weeks after the surgery. The hospital said Rick Slayman, 62, will continue his recovery at home in Weymouth. Link to more via CBS News.

— Cook Political Report changes rating on Nevada Senate contest to ‘toss up’. The election handicapper Cook Political Report with Amy Walter announced Wednesday that it’s shifting its rating of the Nevada Senate race from ‘lean Democrat’ to ‘toss up.’ Sen. Jacky Rosen (D-Nev.) is likely to go against retired Army Capt. Sam Brown (R) in November. Brown has several primary challengers, though Senate Republicans have sought to coalesce around the Army veteran this cycle.

— Over 8% of Wisconsin Democrats voted “uninstructed” in the state’s primary, to warn President Joe Biden that he is alienating voters with his stance over the Gaza war in a state where he narrowly won in 2020.

— Canadian politicians were targeted by China in 2021: report. Lawmakers testified at a public hearing on foreign interference that they had been caught in China’s cross hairs after criticizing it over human rights. Link for details via the New York Times.

— ITC hearing today on 2, 4-D tariff petition. On March 14, 2024, Corteva filed a petition with the International Trade Commission (ITC) for the imposition of antidumping and countervailing duties on imports of 2, 4-Dichlorophenoxyacetic acid from China and India. The ITC will make a preliminary determination by April 29. Shipments from the two countries made up 81% of all the imports of 2,4-D into the U.S. in 2023, Corteva said in its filing, which covers 2021-2023. The imports have cut into both sales and market share for Corteva, the company said. alleged dumping margins: China: 143.73%; India: 62.66%.

— Tyne Morgan sends this report on EU farmer protests for readers of Updates:

EU Protests

• A global panel covered a broad landscape, but the most interesting may have been an inside look at the farmer protests across Europe.
• Trevor Donnellan with Teagasc (Irish Agriculture and Food Development Authority says farmers are concerned about several issues, but many are what could happen in the years ahead.
• Fear of ever tightening regulation of agriculture.
• “Farming perceived as a problem.”
• “Benefits of farming have been forgotten.”

While the motivations around the protests include low cost imports, nitrogen regulations, vehicle taxes, low farm incomes, etc., the biggest motivator is EU regulations and the rapid rise in prioritization of environmental objectives over the past 5 years:

• European Green Deal
• Farm to Fork Strategy
• Biodiversity strategy
• Nature Restoration law
• Carbon Border Adjustment Mechanism (CBAM)

Why should all farmers care about what’s happening in Europe? Donnellan says EU environmental policies could influence future trade regulations and the ability of U.S. farmers to export products to the EU.

• EU environmental policies could influence global agricultural sustainability requirements.
• U.S. farmers may need to adopt sustainability related technologies to remain competitive.
• U.S. farmers could also face increasing pressure from U.S. supply chain to follow suit.

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 | | Russia/Ukraine war, lessons learned | | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | New farm bill primer | | Gov’t payments to farmers by program | Farmer working capital | USDA Ag Outlook Forum |