House Speaker McCarthy at Farm Bill Event Laments Decisions Made ‘For Fish, Not People’

U.S. retail sales surge way above expectations

USDA daily export sale: 213,370 metric tons of corn to Mexico during 2022-2023 MY.

The many so-called farm bill experts who keep saying the House will not likely complete a new farm bill this year were confronted with hearing House Speaker Kevin McCarthy (R-Calif.) on Tuesday, attending a farm bill listening session in his state of California, predict a farm bill will be completed this year with Democratic votes. But McCarthy also raised the coming GOP push for worker requirement language for food stamps, a potential hurdle ahead if deemed too onerous by Democrats. More in Policy section.

U.S. retail sales unexpectedly jumped 3% month-over-month in January of 2023, the biggest increase since March of 2021 and way above market forecasts of a 1.9% rise. It follows a 1.1% drop in December. More in Markets section.

The three unidentified objects shot down over North America in recent weeks were likely commercial or benign, the White House said on Tuesday.

President Biden’s reshuffle of his economic team could have its most immediate economic impact on the Federal Reserve, with the departure of the central bank’s vice chair, Lael Brainard, for the White House. “One potential voice for restraint is going to be absent,” Jason Furman, an economist at Harvard University and a former economic adviser during the Obama administration, told the New York Times about Brainard’s appointment. More in Personnel section.

The Federal Trade Commission’s lone Republican member said Tuesday she was resigning, describing her move as a protest against the leadership strategy and ethics of the Democratic chair of the antitrust and consumer-protection agency.

Norfolk Southern Corp. is facing scrutiny from regulators, public officials and residents as cleanup and environmental-monitoring efforts continue in a small Ohio town after the derailment of a train carrying hazardous chemicals.

DOJ weighs in on right to repair court case. A filing Tuesday by the Department of Justice (DOJ) urged a federal court in Illinois not to throw out a class action suit that consolidated several farmers’ lawsuits against John Deere over repair restrictions, one that the U.S. gov’t is not directly involved in at this point. More below.

The shutdown of FAA’s pilot-alert system in January, resulting in the first nationwide ground stop since 9/11, will be the focus of a Senate hearing today. Separately, the FAA summoned aviation-industry officials to a safety meeting in March to address several recent near collisions.

Sen. Dianne Feinstein (D-Calif.) said she would not run for re-election in 2024, but would serve the remainder of her term.

Equities today: Global stock markets were mixed overnight, with Asian shares mostly lower and European shares mostly higher. U.S. Dow is currently around 200 points lower. A Commerce Department report showed retail sales rebounded 3% in January, a sharper increase than expected and a sign of consumer resilience, complicating the Federal Reserve’s task to cool the economy. In Asia, Japan -0.4%. Hong Kong -1.4%. China -0.4%. India +0.4%. In Europe, at midday, London +0.1%. Paris +1.3%. Frankfurt +0.6%.

U.S. equities yesterday: The Dow and S&P 500 finished with losses while the Nasdaq managed to finish higher after inflation data. The Dow was down 156.66 points, 0.46%, at 34,089.27. The Nasdaq was up 68.36 points, 0.57%, at 11,960.35. The S&UP 500 edged down 1.16 points, 0.03%, at 4,136.13.

Agriculture markets yesterday:

• Corn: March corn fell 2 3/4 cents to $6.82 1/4, marking a low-range close after trading as high as $6.88 1/4.
• Soy complex: March soybeans fell 5 1/4 cents at $15.37 1/4, after a relatively narrow session. March soymeal settled down $3.00 at $501.00, while soyoil settled 26 points higher at 60.4, continuing the recent meal/oil spread action.
• Wheat: March SRW wheat fell 6 cents to $7.86, near the session low and hit a six-week high early on. March HRW wheat dropped 6 1/4 cents to $9.06, near the daily low and hit a 2.5-month high early on, while spring wheat rose 1 1/4 to $9.32.
• Cotton: March cotton futures fell 24 points to 85.40 cents. May cotton closed down 9 points at 85.70 cents.
• Cattle: Expiring February live cattle futures slipped 12.5 cents to $162.15 Tuesday, while most-active April fell 42.5 cents to $164.675. March feeder futures slid 55 cents to $186.65.
• Hogs: February lean hogs expired 15 cents lower at $75.675 at noon today, while the April contract rose 90 cents to $87.25.
  

Ag markets today: Corn and soybean futures extended Tuesday’s declines during overnight trade, while wheat futures traded narrowly mixed. As of 7:30 a.m. ET, corn futures were trading 3 to 5 cents lower, soybeans were 8 to 10 cents lower, SRW and HRS wheat were fractionally to a penny higher and HRW wheat was steady to 3 cents lower. Front-month crude oil futures were modestly lower, while the U.S. dollar index was nearly 400 points higher.

Technical viewpoints from Jim Wyckoff:

On tap today:

• U.S. retail sales for January are expected to rise 1.9% from the prior month. (8:30 a.m. ET) UPDATE: U.S. retail sales unexpectedly jumped 3% month-over-month in January of 2023, the biggest increase since March of 2021 and way above market forecasts of a 1.9% rise. It follows a 1.1% drop in December. Biggest rises were seen in sales at department stores (17.5%), food services and drinking places (7.2%), motor vehicles and parts (5.9%), furniture stores (4.4%), electronics and appliances (3.5%), miscellaneous stores (2.8%), clothing (2.5%). On the other hand, sales at gasoline stations were flat.
• New York Fed’s Empire State manufacturing survey is expected to rise to minus 20.3 in February from minus 32.9 one month earlier. (8:30 a.m. ET)
• U.S. industrial production for January is expected to rise 0.4% from the prior month. (9:15 a.m. ET)
• U.S. business inventories for December are expected to increase 0.3% from the prior month. (10 a.m. ET)
• National Association of Home Builders housing market index is expected to rise to 37 in February from 35 one month earlier. (10 a.m. ET)
• USDA Agricultural Projections to 2032, 1 p.m. ET.
• Congressional Budget Office releases updated budget and economic projections through 2033, as well as its latest estimate of when the Treasury will no longer be able to pay its obligations fully if Congress doesn’t raise the debt limit. The projections will also be key for funding levels for the new farm bill. (2 p.m. ET)

U.S. interest rates outlook. Data this month show price pressures remain stubbornly high and the labor market is still strong. That has prompted investors to increase bets that U.S. rates will peak above 5% and stay there for longer. Bottom line: Traders have given up on hopes that the Fed would cut rates several times this year.

Meanwhile, Fed officials stressed the need for further interest-rate increases to help tame inflation. Richmond Fed President Thomas Barkin said in a Bloomberg TV interview that “if inflation persists at levels well above our target, maybe we’ll have to do more.” Dallas Fed President Lorie Logan noted the need to “remain prepared to continue rate increases for a longer period than previously anticipated.” Meanwhile, Philadelphia Fed President Patrick Harker said he believes policymakers will need to raise interest rates above 5% and possibly higher.

Market impact: Data shows Federal Reserve officials are on track to raise interest rates at their meeting in March and to signal further increases will be likely after that. Fed officials in recent public appearances have braced themselves for a longer fight than anticipated by many investors.

Inflation remains sticky. January’s core consumer price index, which excludes volatile energy and food prices, rose 5.6% from a year earlier, down from 5.7% in December. Many economists see the core measure as a better predictor of future inflation than the headline number. Inflation could remain elevated for some time, data suggest. Core goods prices rose at their slowest annual pace since February 2021. But core services rose at their fastest pace since 1982.

Upshot: The Fed has focused on services and an unofficial category often dubbed supercore inflation, which is services less energy and shelter. Chairman Jerome Powell has for the past three months justified continued interest-rate increases by noting that tight labor markets and rising wages are fueling inflation in labor-intensive service industries.

Several breakfast staples saw sharp price increases due to bad weather and disease outbreaks — and continued effects from Russia’s invasion of Ukraine. The Wall Street Journal looks at rising costs for eggs, which posted their biggest annual price increase since 1973, and the category that includes frozen orange juice, which had its highest annual increase in over a decade. Link to WSJ item.

Total mortgage application volume fell 7.7% last week, according to the Mortgage Bankers Association, as the popular 30-year fixed rate rose to 6.39% from 6.18%. Refinance applications fell 13% week over week, while applications to purchase a home were down 6%. “Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time,” said Joel Kan, a top economist for the MBA.

Market perspectives:

• Outside markets: The U.S. dollar index was firmer, with the euro and British pound both weaker against the greenback. The yield on the 10-year U.S. Treasury note was slightly higher, trading around 3.75%, with a narrowly mixed tone in global government bond yields. Crude remains lower, with U.S. futures around $78.25 per barrel and Brent around $83.75 per barrel. Gold and silver futures were lower ahead of a spate of economic data, with gold around $1,845 per troy ounce and silver around $21.55 per troy ounce.

• The International Energy Agency raised its forecasts for oil demand this year to a record level, as China’s reopening fueled a surge in air travel across Asia, while also adding to its supply forecast as Russian production remained surprisingly resilient to Western sanctions. The Paris-based energy watchdog said in a monthly report that it expects oil demand to grow to 101.9 million barrels a day this year — a record level — propelled almost entirely by rising demand in Asia. The figure is 200,000 barrels a day more than the IEA forecast last month, which was also a record amount. That figure means demand is expected to grow by 2 million barrels a day this year, of which Asian nations will account for 1.4 million barrels a day and China alone will account for 900,000 barrels a day.

• Falling ocean-freight rates could help bring down prices on many imports. Retailers are hoping to save millions of dollars on shipping costs when they negotiate contracts with ocean carriers this month, the Wall Street Journal reports (link). Companies including Costco Wholesale, Hobby Lobby Stores and Party City expect to cut costs by half or more, which in turn could allow them to slow or stop price increases for goods. More recently retailers have pulled back on orders while working through a backlog of inventory, leaving carriers scrambling to fill space on ships. The average contract cost of shipping a container from China to the West Coast was $2,618 as of Feb. 9, down significantly compared with the $8,607 rate on April 1, 2022, according to Xeneta.

• Ag demand: Thailand purchased 60,000 MT of feed wheat expected to be sourced from Australia. Jordan tendered to buy 120,000 MT of optional origin milling wheat. Japan received no offers for its tender to buy 70,000 MT of feed wheat and 40,000 MT of feed barley.

• NWS weather outlook: Ongoing blizzard conditions over portions of the northern Plains and upper Mississippi Valley are forecast to subside later today as a strong low-pressure system exits into eastern Canada... ...A swath of snow is forecast to stretch from the Four Corners to the lower Great Lakes today through early Friday as another low pressure system tracks rapidly across the central U.S.... ...Strong to severe thunderstorms and areas of heavy rainfall will impact areas from the Arklatex/lower Mississippi Valley across the Mid-South and into the Ohio Valley tonight through early Friday.

Items in Pro Farmer’s First Thing Today include:

• Corn and beans weaker, wheat mixed overnight
• Drought threatening southern Brazil’s soybean crop
• India soymeal exports soaring
• NOPA crush expected to rebound from December level
• China issues threats over U.S. high-altitude balloons
• France lowers wheat export forecast
• China continues wheat auction
• Cattle traders stay cautious
• Hog futures show signs of trend reversal

— Summary: Western intelligence shows Russians amassing aircraft on Ukraine border. Meanwhile, NATO allies are going to prioritize rapid shipments of air defenses and ammunition as conflict enters new phase.

• The U.S. might send Ukraine thousands of seized weapons and a million-plus rounds of ammunition once bound for Iran-backed fighters in Yemen, according to U.S. and European officials. The cache the Navy took from smugglers in recent months would be a new way for the West, which is having a hard time increasing its arms production, to give Ukraine the military support it needs as the war with Russia enters its second year.
• Russia has denied the Moldovan leadership’s allegations that the Kremlin sought to overthrow the country’s government. Moldovan President Maia Sandu said that Russia was planning to attack government buildings, take hostages, and put the nation “at the disposal of Russia” to keep it from joining the European Union.
• The International Monetary Fund has started negotiating with Ukrainian officials to put together what could be its largest loan package for the country since Russia’s invasion.

• Ukraine calls on U.N., Turkey to prevent Russia from obstructing grain deal. Ukraine called on the United Nations and Turkey to press Russia to immediately stop hindering Ukrainian grain shipments. Ukraine has repeatedly accused Russia of delaying grain inspections. Foreign Minister Dmytro Kuleba and Deputy Prime Minister Oleksandr Kubrakov said in a joint statement that “Ukraine is deeply concerned about the destructive actions of Russia,” which result in the delay of the work of the grain corridor and “obstructing the Black Sea Grain Initiative in general. Such a destructive Russian policy has resulted in a systematic decrease of the freight turnover within the Grain Initiative.” The Ukrainian officials said Russia at the same time increased uncontrolled traffic volume through its Azov and Black Sea ports. The agreement was extended by a further 120 days in November and is up for renewal again next month, but Russia has signaled it is unhappy with some aspects of the deal and asked for sanctions affecting its agricultural exports to be lifted.

— Farm bill listening session in Tulare, Calif., included House Speaker Kevin McCarthy (R-Calif.). Both McCarthy and House Ag Chairman G.T. Thompson (R-Pa.) predicted the House will complete a new farm bill this year. McCarthy answered “yes” when asked whether a farm bill would pass this year with Democratic support. Thompson repeated his prediction that he was committed to passing a farm bill this year.

But McCarthy signaled Republicans will review work requirements in the Supplemental Nutrition Assistance Program (food stamps), a topic that could stall action on the farm bill if seen as too onerous.

McCarthy mentioned the growing needs of farms that grow fruits, vegetables, nuts and other specialty crops. “There’s a lot of different concerns when it comes especially out here with specialty crops and others,” he said, emphasizing a need for research and market development funding.

McCarthy urged those in attendance to offer their views, pointing out that beyond the farm bill, there needs to be fair trade. “When we have fair trade, we can compete and we can put our products on every table,” McCarthy stated. “When I watch these other countries want to come and be on our shelves, but say ‘no’ (to imports) — that’s wrong. We need to knock down every barrier because no one’s going to beat us in that process.”

McCarthy included domestic barriers on his list of targets, such as water policies, “when I see choices are made for fish, not people.” He also cited inflation and burdensome regulations.

The Speaker ended by noting the 2023 Farm Bill was off to a bipartisan start, given attendance by Republicans and Democratic lawmakers at the listening session. “When I was (Republican) whip, the farm bill was the hardest bill to pass.” Why? In 2013, when McCarthy was GOP whip, the House, for the first time, defeated a farm bill when Republican conservatives sought to cut billions of dollars from public nutrition programs. The farm bill was enacted in 2014 without the cuts.

Topics mentioned echoed those often cited in Washington: crop insurance, market promotion via the Market Access Program and Foreign Market Development Program, possible need for a permanent disaster assistance program, and dairy program issues, including changing the pricing formula that could result in an increase in make allowances, the formula used to determine how much processors get for their costs.

Rep David Valadao (R-Calif.) said: “Today, we heard a lot of valuable input about how to best support California agriculture in the upcoming Farm Bill — from strengthening crop insurance to addressing skyrocketing input costs.”

Crop insurance is available on only a quarter of the 400 crops grown in California, said Jamie Johansson, president of the California Farm Bureau.

“We need more TEFAP and we need more SNAP,” said Natalie Caples, speaking for the California Association of Food Banks. TEFAP — The Emergency Food Assistance Program — is a USDA program that donates food for distribution by charities.

Link to a livestream of the listening session. Link to video of McCarthy’s address.

Comments: Based on covering 11 farm bills, many lawmakers and ag industry stakeholders always talk about more funding needed for agricultural research and market promotion, but too often in the past, those key topics have seen initial requests shaved by putting more funding elsewhere. My farm bill report card, whenever it is completed, will be determined in part as to how those important issues are addressed.

— As expected, President Biden names Fed’s Lael Brainard as next top economic aide. The president named Lael Brainard, a top official at the Federal Reserve, as the new director of the National Economic Council as part of a reshuffling of responsibilities on his economic team. Her replacement in the Fed’s No. 2 position will require Senate approval, which could become a bitter fight. Names in the current speculation game, according to the New York Times, include the current Fed governors Lisa Cook and Philip Jefferson; Mary C. Daly, the president of the Federal Reserve Bank of San Francisco; Janice Eberly of Northwestern University; and Karen Dynan of Harvard University.

— Jared Bernstein was tapped to head the Council of Economic Advisors. Bernstein, a former social worker and longtime Biden ally who served as his chief economist and economic advisor during the Obama administration, is currently a member of the board he will helm. Bernstein’s position requires Senate confirmation, which is not expected to be difficult with the Democrats’ 51-seat majority. If the Senate confirms the appointment of Bernstein, who worked at the pro-labor Economic Policy Institute for 16 years, he would likely become the most outspoken supporter of labor unions to ever take the role.

— Nomination hearing. The Senate Finance Committee holds a confirmation hearing for Danny Werfel, President Biden’s nominee to lead the IRS, this morning.

— FTC’s only Republican member Christine Wilson to resign, blames Lina Kahn. Christine Wilson, the sole Republican on the Federal Trade Commission (FTC), said Tuesday she will resign soon, blaming the move on the agency’s top official, Lina Khan. “Much ink has been spilled about Lina Khan’s attempts to remake federal antitrust law as chairman of the Federal Trade Commission,” Wilson wrote in an opinion piece (link) in the Wall Street Journal. “Less has been said about her disregard for the rule of law and due process and the way senior FTC officials enable her.” Wilson said in the piece that she would resign “soon” but gave no date.

Her departure will not change the balance of power in the commission. It should have five members but without Wilson, a Republican, it would have just Khan, as chair, and commissioners Rebecca Slaughter and Alvaro Bedoya. All three are Democrats. By rule, President Biden must nominate a Republican commissioner to fill the empty seats, but it’s likely he’ll seek out more of a centrist.

Wilson is the second Republican to quit recently. Noah Phillips stepped down in October before his term expired. Phillips often joined Wilson in challenging Khan and her Democratic colleagues, saying their ambitions exceeded the agency’s legal authority. Phillips also complained of diminished discussion and compromise.

What’s next: Tomorrow Khan is scheduled to speak at a public forum on the FTC’s proposed ban on noncompete agreements. Wilson yesterday called the rule-making another sign of Khan’s overreach. Khan is also overseeing the agency’s lawsuit against Microsoft’s nearly $70 billion acquisition of Activision.

— More on Document 1, the Party’s annual rural policy guidance. The top Chinese official for agriculture and rural affairs explained in a press conference introducing the 2023 document #1 that “the factors that determine the path of agricultural modernization with Chinese characteristics should be “holding rice bowls firmly by ourselves, developing ecological low-carbon agriculture, and steadily pushing forward common prosperity.”

From the Global Times:

Tang Renjian, director of the Central Rural Work Leading Group Office and minister of Agriculture and Rural Affairs, said at a press conference in Beijing on Tuesday that the key policy priorities of the document could be summarized in three aspects —"securing the bottom line, bolstering rural revitalization efforts and reinforcing support.”

“Securing the bottom line is intended to ensure national food security and forestall any large-scale re-emergence of poverty,” Tang said, while highlighting the goal of achieving grain output of more than 650 million tons this year and pushing production to a new level of 700 million tons...

At the press briefing, officials expounded on the connotation of “strong agricultural country,” a grand goal set for the first time in the annual policy document.

Of note, boosting yields isn’t the only way Beijing wants to deliver on food security. The No. 1 Document also calls for officials to: “Construct a diversified food supply system [and] establish a broad concept of food.”

The No. 1 Doc calls for a bunch of forward-looking efforts to expand domestic production of everything people eat, including by:

• Developing more plant, animal, and microorganism-based foods.
• Expanding livestock feed and forage production.
• Building an ocean ranching industry.

— China increases medium-term liquidity, keeps rates unchanged. The People’s Bank of China (PBOC) injected a total 499 billion yuan ($73 billion) via a one-year medium-term lending facility (MLF) to some financial institutions and kept the interest rate unchanged at 2.75% on Wednesday. With CNY 300 billion of MLF loans maturing on the same day, the operation resulted in a net 199 billion yuan ($29 billion) fresh fund injection into the banking system. The central bank also pumped 203 billion yuan through seven-day reverse repos while keeping borrowing cost unchanged at 2%.

— USDA Sec. Vilsack ‘disappointed’ by Mexico’s new decree on GMO corn. A new government decree by Mexico which altered its stance slightly on GMO corn quickly brought “disappointment” via a statement from USDA Secretary Tom Vilsack.

The new decree kept in place its coming ban as of 2024 of GMO corn imports for human food, but removed it for corn used for feed which accounts for 70% of Mexico’s imports of U.S. corn. The decree indicated that the country would strive to substitute non-GMO corn for animal feed. “

Mexico’s Economic Ministry announced the revisions on Monday night (link), saying they would provide clarity about Mexico’s goal of preserving its biocultural heritage as the birthplace of corn and protect “a central input in the culture of Mexicans… The decree prohibits the use of genetically modified corn for dough and tortillas,” said the ministry. It said Mexico “is more than self-sufficient in the production of GM-free white corn,” used in tortillas, an everyday food in the country. Regarding yellow corn, used as livestock feed and by industrial processors, “the deadline to prohibit its use is eliminated.” An import ban was scheduled to take effect next January.

Vilsack comments. “The U.S. believes in and adheres to a science-based, rules-based trading system and remains committed to preventing disruptions to bilateral agricultural trade and economic harm to US and Mexican producers,” Vilsack said in a statement, noting USDA will work with the Office of the U.S. Trade Representative (USTR) on the matter.

The U.S. maintains that Mexico’s ban overrules commitments under the U.S.-Mexico-Canada Agreement (USMCA) which calls on Mexico to adhere to science in matters like biotechnology.

The National Corn Growers Association (NCGA) pressed the administration to act, with the group’s President Tom Haag saying, “Singling out corn — our number one ag export to Mexico — and hastening an import ban on numerous food-grade uses makes USMCA a dead letter unless it’s enforced.”

The U.S. previously had given Mexico until Tuesday to explain the science behind its actions on GMO corn, and Doug McKalip, USTR special agricultural trade negotiator, labeled the latest decree as not an explanation.

Mexico is the largest destination for U.S. corn exports (followed by China), accounting for 27% of all U.S. corn exports in marketing year 2021/22 (September 2021—August 2022) in terms of volume. Based on export sales data for 2021-22: 16.689 million tonnes of corn to Mexico, the vast majority of it yellow corn for animal feed, and up from 14.818 million tonnes in 2020-21. Mexico has been the top destination for U.S. corn in four of five most recent marketing years.

Mexico produces predominantly white corn used directly for human consumption in the form of tortillas and other staples of Mexican cuisine. To fulfill domestic demand, Mexico must import about 5% of its white corn.

— Tesla is opening up thousands of its charging stations to EVs made by other companies, according to the White House. Tesla and other companies that build and operate charging networks are also in line to win federal funding if their charging infrastructure lives up to government standards. Tesla agreed to make at least 7,500 chargers in the U.S. available for any compatible EV by the end of next year. That includes 3,500 of the company’s Superchargers that are located on major highways in addition to slower Level 2 destination chargers that Tesla provides at restaurants and hotels, among other locations.

— Midwest motorists could pay an extra 12 cents per gallon for gasoline under a fuel policy shift demanded by governors in the region, according to a new refining industry-commissioned analysis. The study, conducted by Baker & O’Brien Inc. for the main U.S. refining trade group, outlines larger-than-expected impacts of the change, which is part of a bid to encourage filling stations to sell higher ethanol E15 gasoline and offer it year-round. That’s in contrast to a previous estimate commissioned by advocates of corn-based ethanol that saw only a 2-cents per gallon increase for consumers. Link to more via Bloomberg.

— Summary:

• Global Covid-19 cases at 673,283,807 with 6,856,644 deaths.
• U.S. case count is at 102,906,030 with 1,115,018 deaths.
• Johns Hopkins University Coronavirus Resource Center says there have been 670,306,507 doses administered, 269,208,743 have received at least one vaccine, or 81.71% of the U.S. population.

— As expected, Sen. Dianne Feinstein of California won’t seek re-election in 2024. Feinstein, who turns 90 in June, is the oldest member of Congress. Feinstein, first elected in 1992, said in a statement that she intended to remain in Congress through the end of her term. During her first Senate campaign in 1992, there were only two female senators. Today there are 25. Anticipating her departure, a field of candidates had already begun assembling for what is expected to be a fierce campaign to replace Feinstein in the heavily Democratic state. Among the candidates so far is Democratic U.S. Rep. Katie Porter, a prominent member of the party’s progressive wing who announced her bid in January, and Democratic U.S. Rep. Adam Schiff, who has been campaigning around the state.

— The only empty seat in Congress very likely will be filled next week by a veteran state legislator who’d be the first Black woman to represent Virginia. State Sen. Jennifer McClellan is the Democratic nominee in a special election Tuesday in a district that runs from Richmond to the North Carolina line.

— New York Democratic Sen. Kirsten Gillibrand told The Gothamist (link) that she had a “lovely lunch” with Rep. Alexandria Ocasio-Cortez (D-N.Y.) amid rumors that the progressive congresswoman could challenge the senator in a primary. Gillibrand praised Ocasio-Cortez and said she couldn’t “think of a better adversary for [Rep.] Marjorie Taylor Greene” on the Oversight Committee.

— West Va. Senate race. Senate Leadership Fund, a super PAC aligned with Senate Minority Leader Mitch McConnell (R-Ky.), released a poll of the West Virginia Senate race showing GOP Gov. Jim Justice in the strongest position against Democratic Sen. Joe Manchin, per Politico (link).

— The House Judiciary Committee is holding a field hearing in Yuma, Ariz., next Thursday, Feb. 23, focusing on the U.S./Mexico border. Judiciary Democrats won’t be in attendance due to previously scheduled conflicts and are planning their own hearing, potentially in March. Meanwhile, House Speaker Kevin McCarthy (R-Calif.) will follow two House subcommittees to the southern U.S. border today as Republicans seek a photo opportunity to criticize President Joe Biden on immigration, security and health. GOP Freshman Reps. Juan Ciscomani (Ariz.), Lori Chavez-DeRemer (Ore.), Jen Kiggans (Va.) and Derrick Van Orden (Wis.) will join McCarthy in the Tucson area for a briefing from U.S. Customs and Border Protection.

— DOJ weighs in on right to repair court case. A filing Tuesday by the Department of Justice (DOJ) urged a federal court in Illinois not to throw out a class action suit that consolidated several farmers’ lawsuits against John Deere over repair restrictions, one that the U.S. gov’t is not directly involved in at this point.

The DOJ filing said that farmers could face higher repair costs due to the restrictions on repairing their equipment and the court should reject Deere’s stance that a competitive market for tractors and other agricultural equipment equates to a competitive market for repairs. The DOJ said the case is similar to a 1992 U.S. Supreme Court ruling against Kodak relative to copy machines where the court ruled that Kodak restricting access to replacement parts by independent repair shops can be an antitrust violation.

The DOJ filing also said repair restrictions increase financial pressures on farmers, noting an “uptick in family farmer bankruptcies nationwide” since 2014. “These various machines, or ‘tractors’ for short, enable American agriculture. When they break or fail to operate and repair markets function poorly, agriculture suffers. Crops waste. Land lies fallow,” the filing said.

The DOJ filing was silent on whether they thought farmers would eventually be successful in their suit.

Deere maintains that 98% of repairs can be done without using an authorized dealership and it recently signed a memorandum of understanding with the American Farm Bureau Federation recommitting to farmers having access to repair information and tools. Critics note remaining restrictions on what farmers and independent repair shops can and cannot repair.

— President Joe Biden announced that Air India has agreed to purchase 220 Boeing jets valued at $34 billion, with an option for an additional 70 jets that would bring the total price tag to $45.9 billion. The deal marks Boeing’s third biggest sale of all time in dollar value and second of all time in quantity.

— On this day in 1809: Cyrus Hall McCormick was born on a farm in Rockbridge County, Va. He went on to invent the mechanical reaper — the technological breakthrough that turned the U.S. into the breadbasket of the world.

WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | California phase-out of gas-powered vehicles | RFS | IRA: Biofuels | IRA: Ag | Student loan forgiveness | Russia/Ukraine war, lessons learned | Election predictions: Split-ticket | Congress to-do list | SCOTUS on WOTUS | SCOTUS on Prop 12 | New farm bill primer | China outlook | Omnibus spending package |