House Speaker McCarthy Upbeat on Progress in Debt-Limit Talks

FSIS releases results of consumer survey concerning ‘Product of USA’ label

Weekly data confirms China corn cancelations, includes first new-crop cotton sales. USDA’s weekly Export Sales report for the week ended May 18 included cancelations of U.S. corn sales to China, additional wheat sales and the first sales of U.S. upland cotton to China for the 2023-24 marketing year. Activity for the week ended May 18 included net sales of 67,691 metric tons of wheat, net reductions of 331,563 metric tons of corn (272,000 metric tons were canceled via a daily sales announcement but a total of 401,000 metric tons were canceled including business not required to be announced via the daily export sales reporting system), net sales of 115,705 metric tons of sorghum, net sales of 25,209 metric tons of soybeans, and net sales of 64,844 running bales of upland cotton. Sales for 2023-24 were reported for 4,400 running bales of upland cotton, the first such sales on the books for the coming marketing year. For 2023, net sales activity of 2,512 metric tons of beef and 609 metric tons of pork were reported.

If a debt-limit agreement is reached, it looks like votes will occur from mid- to late next week. More in Policy section.

Treasury Secretary Janet Yellen said during a Wall Street Journal event that the prioritization of certain payments “is not really something that is operationally feasible” and the administration is focused on completing negotiations to raise the debt ceiling ahead of the X-date, adding that the country is “committed to not having missed payments.”

Federal Reserve officials were unanimous in their decision to raise rates at the Federal Open Market Committee meeting May 2-3, according to minutes released yesterday, but members were split about the possibility of raising rates at the June meeting. Some members noted that the progress toward reaching the Fed’s goal of 2% inflation was “unacceptably slow,” though in public comments since the May meeting, some officials — including Chairman Jerome Powell — have hinted they would consider pausing rate hikes amid banking-sector upheavals and tightening credit markets. More in Markets section.

This could be California’s financial sector version of Prop 12. The California state Senate is considering a package of climate bills, one of which could compel large companies to disclose their greenhouse gas emissions. This rule could apply regardless of the U.S. Securities and Exchange Commission’s (SEC) decisions on similar national measures, the Washington Post reports. Details below.

The Office of Management and Budget (OMB) has scheduled an increasing number of meetings concerning the EPA’s final rule on levels for the Renewable Fuel Standard (RFS) in 2023 and beyond, with the total number of meetings now reaching 18. This surpasses the number of meetings arranged for the EPA’s proposed rule in late 2022. More in Energy policy section.

Investments in solar energy are set to overtake those in oil production for the first time, according to a new report from the International Energy Agency, which anticipates solar investment spending to total $1 billion per day in 2023. Overall, global investment in energy is expected to hit around $2.8 trillion this year, with over $1.7 trillion going toward clean energy technology like electric vehicles, renewables and energy storage.

House fails to override Biden veto maintaining solar tariffs The House of Representatives fell short of the required two-thirds majority to override President Biden’s veto of a Congressional Review Act (CRA) resolution resuming solar power tariffs.

Chinese-backed hackers infiltrated critical U.S. infrastructure, Microsoft warns. Details in China section.

The pork sector, especially in Canada, is facing a challenging road to profitability in 2023 due to several adverse conditions. These include declining domestic demand, reduced export opportunities, and potential U.S. animal welfare regulations that could lead to lower prices. See the Livestock section for an interview RealAg Radio host Shaun Haney had with Christine McCracken, Rabobank’s senior analyst for animal protein.

USDA’s Food Safety and Inspection Service (FSIS) released results of a consumer survey concerning the ‘Product of USA’ label, in light of its proposed changes to this labeling for several products. Details in Livestock & Food section.

Florida Gov. Ron DeSantis has entered the 2024 race. His presidential campaign announcement was plagued by malfunctions on Twitter Spaces that prevented him from speaking on the platform for more than 20 minutes — a rocky start to a 2024 bid that comes as he trails former President Donald Trump by more than 30 points in early polls. More in Politics & Elections section.

Equities today: Asian and European stock markets were mixed overnight. U.S. Dow opened slightly lower but is currently down nearly 200 points, while the Nasdaq opened higher. In Asia, Japan +0.4%. Hong Kong -1.9%. China -0.1%. India +0.2%. In Europe, at midday, London -0.3%. Paris -0.3%. Frankfurt -0.2%.

Dollar Tree Inc on Thursday cut its annual profit forecast as high inflation dampens demand for higher-margin items such as party supplies and fashion accessories, sending shares of the company down 11%.

U.S. equities yesterday: The Dow ended down 255.59 points, 0.77%, at 32,799.92 The Nasdaq declined 76.08 points, 0.61%, at 12,484.16 The S&P 500 was down 30.34 points, 0.73%, at 4,115.24.

Avi Perry, chief of the Department of Justice’s (DOJ) Market Integrity and Major Frauds Unit, told attendees at a law conference that they should expect to see “more activity” on short-selling from the agency in the next few months, though he declined to comment on whether the DOJ expects to bring charges. Perry noted, however, that the department continues to prioritize investigations into executives’ misuse of corporate trading plans and a futures market manipulation scheme known as spoofing.

Agriculture markets yesterday:

• Corn: July corn rose 9 3/4 cents to $5.87 1/4, closing near the session high and above the 20-day moving average.
• Soy complex: July soybeans rose 2 cents to $13.24 1/2 and nearer the session low. July soybean meal lost $4.20 at $402.20 and closed nearer the session low. July bean oil gained 24 points to 48.00 cents and settled near mid-range.
• Wheat: July SRW futures fell 16 cents before settling at $6.06 1/4. July HRW futures settled 29 1/4 cents lower at $8.12 1/4, near the session low. Spring wheat futures fell 21 3/4 cents to $7.99 and settled near the session low.
• Cotton: July cotton fell 263 points to 81.72 cents and nearer the session low.
• Cattle: June live cattle futures surged to fresh highs before setting back, ending the day at $166.10, up $1.825. August feeder advanced $1.05 to $234.525.
• Hogs: June lean hog futures fell 87.5 cents before settling at $79.8, marking a new contract low.
  

Ag markets today: Corn, soybean and wheat futures held in tight ranges in quiet, two-sided overnight trade. As of 7:30 a.m. ET, corn futures were trading fractionally lower to a penny higher, soybeans were fractionally to 3 cents lower and wheat futures were 1 to 4 cents lower. Front-month crude oil futures were around $1.50 lower, and the U.S. dollar index was about 200 points higher.

Market quotes of note:

• Nvidia is within striking distance of reaching a $1 trillion market value after the chipmaker’s sales forecast smashed expectations and sent its shares surging premarket. The company, a leader in artificial intelligence (AI) hardware and software, saw its shares soar 24.6% to $380 in AH trading on Wednesday, bringing its YTD gain to over 160%. “What can we say other than just wow,” Evercore ISI analyst CJ Muse said. Of note: Nvidia CEO Jensen Huang Jen-hsun said in an interview that China is a “very important” market for tech, as demand for the company’s specialized chips explodes amid a frenzy over AI.

  Analysts disagree on how long the AI rally will last. Michael Hartnett of Bank of America called the rises a “baby bubble.” On the other hand, researchers at Goldman Sachs said tools built on generative AI could help bolster worldwide GDP by $7 trillion.
  

• Fed officials are leaning toward pausing interest-rate increases in June amid heightened uncertainty over the outlook, but signaled they aren’t yet ready to call an end to their battle against inflation. Don’t expect rate cuts until “well into 2024,” Atlanta Fed President Raphael Bostic said.
  
• U.K. inflation data makes a recession more likely as the Bank of England is now pushed to raise interest rates further and for longer than previously thought, Capital Economics’ Neil Shearing and Paul Dales say in a note. Services CPI inflation increased to 6.9% in April from 6.6%, suggesting price pressures look increasingly domestically generated, driven by rapid wage growth, the economists say. Policymakers will need to bear down on demand in order to cool the labor market and bring inflation down to more acceptable levels, they say. While the recent resilience of economic activity has led many forecasters to believe that a recession in no longer likely, it could be more a case that the recession has been delayed rather than canceled, they say.
  

On tap today:

• U.S. jobless claims are expected to rise to 245,000 in the week ended May 20 from 242,000 one week earlier. (8:30 a.m. ET)
• U.S. gross domestic product in the first quarter is expected to increase at a 1.1% annual pace from the prior quarter, unchanged from a previous reading. (8:30 a.m. ET)
• USDA Weekly Export Sales report, 8:30 a.m. ET.
• U.S. pending-home sales for April are expected to increase 0.8% from the prior month. (10 a.m. ET)
• Federal Reserve speakers: Richmond’s Thomas Barkin to the SWVA Economic Forum at 9:50 a.m. ET, and Boston’s Susan Collins at the Community College of Rhode Island at 10:30 a.m. ET.
• Kansas City Fed’s manufacturing survey is expected to tick up to minus 9 in May from minus 10 one month earlier. (11 a.m. ET)

Germany’s economy slipped into recession in the first quarter. Germany’s economy contracted 0.3% on quarter in Q1 2023, revised from the initial estimate of no growth as household consumption and government spending shrank. This revised figure marked a second consecutive quarter of GDP decline, pointing to a recession, due to strong inflationary pressures and a rise in borrowing costs.

FOMC Minutes: Fed officials were divided over June rate pause. Federal Reserve officials agreed unanimously to lift rates at their meeting this month but split on whether they would need to raise them in June. Minutes of their May 2-3 meeting, released Wednesday, showed some are ready to pause rate hikes if the economy evolves as they expect. Others, however, are worried that the economy and inflation haven’t shown more visible signs of slowing.

The next FOMC meeting is June 13-14. The minutes illustrated how it could grow more difficult to maintain a strong consensus on rates in the coming months.

Meanwhile, Fed staff continues to expect a mild recession unfolding in the U.S. this year. Their economic assumptions prepared for the May 2-3 meeting “continued to assume that the effects of the expected further tightening in bank credit conditions, amid already tight financial conditions, would lead to a mild recession starting later this year, followed by a moderately paced recovery,” the minutes stated. “Real GDP was projected to decelerate over the next two quarters before declining modestly in both the fourth quarter of this year and the first quarter of next year.”

The assessment of the banking system indicated that conditions were still stable but could still deteriorate.

Fed staff labeled consumer debt issues as being “moderate.”

CME Fed funds futures as of early this morning showed probabilities of a rate pause at the June meeting at 66% with 33% odds that another 25-basis-point increase will be deployed.

Federal Reserve economists built a new way to measure credit and financial conditions: the Twitter Financial Sentiment Index. The index uses natural language processing — a mix of artificial intelligence and linguistics — to comb through tweets. “We document that overnight Twitter financial sentiment helps predict next day stock market returns. Most notably, we show that the index contains information that helps forecast changes in the U.S. monetary policy stance: a deterioration in Twitter financial sentiment the day ahead of an FOMC statement release predicts the size of restrictive monetary policy shocks,” Travis Adams, Andrea Ajello, Diego Silva and Francisco Vazquez-Grande write in a new paper (link).

This could be California’s financial sector version of Prop 12. The California state Senate is considering a package of climate bills, one of which could compel large companies to disclose their greenhouse gas emissions. This rule could apply regardless of the U.S. Securities and Exchange Commission’s (SEC) decisions on similar national measures, the Washington Post reports.

The rule, known as Senate Bill 253 or the Climate Corporate Data Accountability Act, would apply to companies making at least $1 billion in revenue and operating in California.

The California legislation is broader than the SEC’s proposed rule in two main ways. First, it would apply to both privately owned and publicly traded companies, while the SEC proposal would only affect publicly traded companies. Second, the California bill would require companies to disclose their scope 3 emissions, which are emissions produced by customers and suppliers. The SEC is considering excluding scope 3 requirements from its rule to help it withstand legal challenges.

Despite its potentially significant impact, the bill has met opposition from various businesses and industry groups, including fossil fuel companies like the Western States Petroleum Association and the California Fuels and Convenience Alliance, as well as Wells Fargo and burger chain In-N-Out. Critics claim the reporting requirements, especially for scope 3 emissions, could be costly and difficult to fulfill.

Proponents of the bill argue that many large corporations already voluntarily disclose such information and should prepare for similar emissions reporting requirements set to be enforced in Europe in the coming years.

Startups specializing in high-tech farming, such as AppHarvest and Local Bounti, are struggling due to rising costs, financing issues, pests, and other problems that have historically impacted traditional agriculture, the Wall Street Journal reports (link). These companies, which use advanced technology like sensors and robots to grow crops in indoor farms, have seen their share prices drop by more than 95% since going public in 2021.

Over the past few months, at least four companies in this sector have either closed or filed for bankruptcy. Industry funding has drastically decreased as well. After raising a record $895 million in the first quarter of the previous year, the industry has only managed to raise about $10 million in the current quarter. The challenges these startups are facing demonstrate the complexities and risks inherent in attempting to revolutionize the age-old industry of agriculture with technology.

Market perspectives:

• Outside markets: The U.S. dollar index was firmer, with the euro slightly weaker against the greenback. The yield on the 10-year U.S. Treasury note was weaker, trading around 3.74%, with a mostly higher tone in global government bond yields. Crude oil futures remain under pressure but have lifted off their lows. U.S. rude is around $72.90 per barrel while Brent is around $76.90 per barrel. Gold and silver futures were weaker, with gold around $1,962 per troy ounce and silver around $23.17 per troy ounce.

• Crude prices have fallen around 2% with WTI crude around $72.85 per barrel and Brent around $76.85 per barrel, ending a three-day winning streak, amid easing concerns of additional output cuts from OPEC+. Russian Prime Minister Alexander Novak said to Izvestia newspaper that OPEC+ is unlikely to take additional new steps in June because just a month ago certain decisions were made regarding the voluntary reduction of oil production by some countries. Early this week, Saudi Arabia’s energy minister warned short sellers to “watch out” for potential consequences, raising speculations that OPEC+ could consider further output cuts at a meeting on June 4. Meanwhile, a rise in the US dollar amid uncertainty over the debt ceiling also pressured oil prices down. On the other hand, EIA data pointed to a recovery in U.S. demand ahead of the driving-intensive Memorial Day weekend holiday. U.S. crude inventories unexpectedly declined by 12.456 million barrels last week, the largest drop in six months.

• The European Union is managing to replace diesel from Russia — by far the bloc’s top external supplier before February’s ban on seaborne imports. Deliveries from elsewhere have soared, with total arrivals of diesel and gasoil — a similar fuel — expected to hit a four-month high in May, Vortexa Ltd. data show. Russia had often made up more than half the shipments sent into the EU and U.K.

• Natural gas prices in full retreat around the world. This time last year, natural-gas prices were skyrocketing after Russia’s invasion of Ukraine kicked off the worst energy crisis since the 1970s. To the surprise of many prognosticators, that energy shock has now subsided, with gas prices in full retreat around the world.

• Billionaire mining investor Robert Friedland said copper’s tumble is a temporary setback and the metal, key to the decarbonization of the global economy, continues to face a supply crisis. Weak Chinese demand has seen prices fall below $8,000 a ton for the first time in six months. Link to more via Bloomberg.

• A large merchant ship was successfully refloated with help from tugboats after being stuck in the Suez Canal for several hours, averting a repeat of the 2021 stranding of the M/V Ever Given, which lasted for nearly a week and severely disrupted global trade.

• NWS weather outlook: Isolated to scattered locally heavy rain and thunderstorms to impact parts of the Southeast, Great Basin, northern Rockies, and much of the High Plains over the next few days... ...Above average temperatures for the northwestern and north-central U.S. while cooler than average temperatures likely for the East Coast... ...Increasing threat for winds and rip currents for beaches across the southeastern U.S. Friday and Saturday.

Items in Pro Farmer’s First Thing Today include:

• Quiet grain trade overnight
• Rains improve wheat prospects in Argentina
• Smaller Malaysian palm oil production expected next year amid El Niño
• Cold Storage Report shows exaggeration of seasonal trends
• Cash cattle trade higher
• June hogs at rare discount to cash index

— Battle for Bakhmut has inflicted heavy troop losses on Ukraine and Russia. In recent fighting over the eastern Ukrainian city, Bakhmut, heavy losses have been suffered by both sides, the WSJ reports (link). In one particularly severe 36-hour span, 11 of 16 men from a group of Ukrainian draftees were either killed or captured, according to surviving soldiers and relatives. These are part of the thousands of casualties on the Bakhmut front, based on Western estimates.

Kyiv’s strategy is to exhaust Russian forces by deploying mobilized soldiers and territorial defense units, which often have variable training and equipment. Meanwhile, Kyiv is reserving brigades that have been trained and equipped by the West for a future expected offensive.

The conflict has also resulted in significant losses for the Wagner Group, a Russian paramilitary organization. Its owner, Yevgeny Prigozhin, announced that the fighting in Bakhmut has resulted in the deaths of 20,000 of his troops. He stated that his forces will need to withdraw from Bakhmut around June 1 to “reformat, re-equip and rearm.”

— Yevgeny Prigozhin, the head of Wagner, a private military group, warned of a potential “revolution” in Russia if the country’s struggling war efforts in Ukraine persist. In an interview with a pro-Russian blogger, Prigozhin criticized Russia’s military readiness and President Vladimir Putin’s conventional military structure. His comments may deepen divisions within Russia’s military ranks.

— Debt-limit talks:

• House Republican leadership feels confident they can reach a deal with the White House to raise the debt limit and pare back federal spending. Republicans expect the compromise will come together sometime in the next few days. GOP leadership believes they can garner the support of the majority of the House Republican Conference for this eventual package which some say will increase or suspend the debt limit through 2024.
• Whenever an agreement is announced, it will likely take two days to get it into legislative form.
• House members plan to leave Washington later today as debt-limit talks continue, saying they could vote next week — or even come back over the weekend — if negotiators strike a deal. House Majority Leader Steve Scalise (R-La.) said members can leave at the end of the day today for the Memorial Day weekend, but that they’ll need to be able to return on 24-hour notice if a deal materializes. Even as negotiators say they want to raise the debt limit by June 1, members say the House could wait until next week and bank on the Senate acting quickly to avoid a default. It’s also possible the real deadline for action isn’t quite so soon.
• Waiting until next week to vote in the House would either require the Senate to achieve unanimous consent for a time agreement to hold a vote quickly, or it could require a stopgap debt-limit extension, unless the deadline to act turns out to be later than the early June projections from Treasury Department officials. Senate rules allow any one senator to delay a deal for days, threatening to breach the June 1 date when Treasury Secretary Janet Yellen has warned the U.S. might no longer be able to pay all of its bills. No senator threatened to do so, and Senate Minority Leader Mitch McConnell (R-Ky.) predicted any deal would pass on a bipartisan basis and avert a default.
• Senators to watch include Rand Paul (Ky.) and Mike Lee (Utah), Republicans who are among the conservatives who occasionally hold up legislation to try to force changes.
• House members could vote sometime in the middle of next week and probably be fine, Rep. Kevin Hern (R-Okla.), chair of the Republican Study Committee, told reporters yesterday. If things go well, it’s possible negotiators will announce a deal Friday and members could vote Tuesday. Republicans are determined to abide by their rule requiring 72 hours for members to read legislation before a vote, he said.
• Fitch Ratings placed the US’ AAA credit rating on ‘rating watch negative,” a sign of growing unease about the country’s ability to avert a default (link). The U.S. received a credit downgrade during similar turmoil in 2011. Fitch still expects a resolution to the debt limit before the June 1 so-called “X-date.” A White House spokesperson said the Fitch report demonstrated the urgency of reaching a speedy resolution to the debt ceiling standoff.
• Representatives for Biden and House Republicans began meeting about noon ET Wednesday in White House Budget Director Shalanda Young’s office suite. The change in locale came a day after Rep. Patrick McHenry (R-N.C.), one of McCarthy’s negotiators, bragged that the talks have all been held in the Capitol because, in his view, the GOP has the upper hand.
• A private-sector warning: JPMorgan Chase & Co. chief US economist Michael Feroli wrote to clients Wednesday warning that his team now puts the odds of hitting the June 1 “X-date” without a deal “at around 25% and rising.”
• Treasury Secretary Janet Yellen said the Biden administration’s focus is on completing a debt-limit deal rather than contingency planning for a default. “We are committed to not having missed payments and raising the debt ceiling,” Yellen said Wednesday via video conference to a Wall Street Journal event in London.
• On Friday, June 2, millions of Americans are due a total of $25 billion worth of Social Security payments. And more than anything else, that may prove a decisive element in forcing an end to the partisan standoff over raising the federal debt limit. That obligation is “an enforcement mechanism we can’t ignore,” Sen. Chris Coons (D-Del.), one of Biden’s top allies in Congress, said on MSNBC yesterday. “When they find out that they’re not getting that check, our phones will light up like a Christmas tree.”
• Lawmakers pushing to cap spending as part of a deal already acknowledge funding limitations won’t be airtight, as members expect exemptions for emergency spending and maybe even wholesale cap increases. Hurricanes, public health emergencies, and wars are among the most likely candidates for exemptions to any spending caps created under a debt-limit deal, said Bill Hoagland, senior vice president at the Bipartisan Policy Center and a longtime former Senate Republican aide. And if the 10-year spending cap process created under the 2011 debt-limit standoff is any indication, lawmakers may negotiate increases to the caps themselves, as lawmakers did every two years for most of the decade.
• The Securities Industry and Financial Markets Association trade group has created a playbook for its Wall Street members to continue operating and trading should a U.S. debt default lead to confusion in the markets, a plan which assumes that Sifma would receive a day’s notice if the government is expected to miss a debt payment. Link for more via the Wall Street Journal.

— Chinese-backed hackers infiltrated critical U.S. infrastructure, Microsoft warns. A state-sponsored group has been working since 2021 to disrupt “critical communications infrastructure between the United States and Asia,” the tech giant said yesterday. U.S. officials are worried the intrusion is meant to hurt American efforts to aid Taiwan in the event of a Chinese attack.

— China’s 58% growth in automotive exports last quarter pushed it past Japan as the world’s largest car exporter. China exported 1.07 million vehicles in the first quarter of this year, a 58% increase from a year earlier, according to official figures. In comparison, Japan shipped 950,000 vehicles abroad during the quarter, according to the Japan Automobile Manufacturers Association. Russia accounted for a significant part of the surge. Link to more details via the Wall Street Journal.

— Argentina launches dispute against U.S. at WTO. It regards on tubular goods used in oil production, the trade watchdog said on Thursday. The so-called “request for consultations” is the first formal step in the WTO’s dispute settlement process. This is the third such dispute brought by Argentina on the same matter, the WTO said.

— FEDIOL, the European vegetable oil industry association, has requested an investigation into a significant increase in biodiesel imports classified as waste-based, terming the rise as “abnormal.” This surge in imports has caused a 30% drop in rapeseed oil prices over the last five months, with a similar decline in the price of rapeseed, Europe’s main oilseed crop.

FEDIOL expressed doubts about the legitimacy of the waste-based classification of the biodiesel imports, arguing that this cannot be explained by other market trends and indicates unusual market activity.

Other sources, according to Reuters, have also observed the dip in rapeseed prices. They have pointed to substantial rapeseed supplies and changes in biofuel policy as additional factors exerting pressure on prices, particularly following record highs last year in the aftermath of Russia’s invasion of Ukraine.

— One key component in the batteries that power electric vehicles: lithium. China’s hunt to secure a greater share of the world’s supply is leading it to buy up stakes in mines throughout the developing world. The Wall Street Journal took a look (link) at the risky strategy to spend billions in nations that have histories of political instability, local resistance and resource nationalism.

— Investment in the solar energy sector is set to surpass spending on oil production for the first time in 2023, with global investment in solar reaching $380 billion compared to $370 billion for oil. This shift is largely due to robust subsidies and tax credits, such as the Inflation Reduction Act, policy alignment among nations towards climate and energy security, and the improving economics of renewable power sources.

Fatih Birol, executive director of the International Energy Agency, noted that this development will significantly transform the energy system and contribute to keeping the global temperature rise below 1.5 degrees Celsius — a key target of the Paris Agreement. He emphasized the rapid pace at which clean energy is advancing, stating that for every dollar invested in fossil fuels, about $1.70 is now being invested in clean energy, a significant increase from the 1:1 ratio just five years ago. Birol’s remarks highlight the increasing importance and growth of solar and clean energy in the global energy market.

— RFS update. The Office of Management and Budget (OMB) has scheduled an increasing number of meetings concerning the EPA’s final rule on levels for the Renewable Fuel Standard (RFS) in 2023 and beyond, with the total number of meetings now reaching 18. This surpasses the number of meetings arranged for the EPA’s proposed rule in late 2022.

Several key meetings have been planned with various stakeholders. These include Western Dubuque Biodiesel on May 26, Renewable Fuels Association on June 8, and both the World Resources Institute and Growth Energy on June 9.

EPA is required to finalize the levels for the RFS for 2023 and beyond by June 14. This deadline is a result of an agreement approved in court following a lawsuit filed by Growth Energy. The meetings and upcoming decision signal an increasing focus on renewable fuels and their role in future energy policies.

— Former FERC Chairman Glick starts clean energy consulting firm. Richard Glick, who departed the Federal Energy Regulatory Commission in January, announced Wednesday that he has started his own consulting firm with his former chief of staff to lobby on energy issues.

— Biden taps Energy Dept. to find fossil fuel alternatives. The Biden administration is launching an initiative through the Energy Department to develop low-carbon alternatives to petroleum-based transportation fuels and chemical feedstocks. The initiative, called the Clean Fuels and Products Shot, will be announced by Secretary Jennifer Granholm. It aims to create alternative fuels for sectors such as aviation and rail that are currently difficult to decarbonize.

The department’s goal is to develop fuels by 2035 that emit at least 85% less greenhouse gas than fossil-based sources. The plan aligns with the administration’s broader aim of achieving net-zero emissions by mid-century.

The initiative is targeting a reduction of greenhouse gas emissions by as much as 650 million metric tons of carbon dioxide equivalent per year by 2050. It takes inspiration from the department’s successful SunShot initiative, which aimed to reduce the cost of solar power by 75% by 2020 and achieved this goal three years early.

To reach its low-emission fuel target, the department is exploring alternative fuels derived from biomass sources like forest trimmings and municipal solid waste, according to Jay Fitzgerald, the chief scientist for the department’s Bioenergy Technologies Office. Other potential sources could include waste carbon dioxide.

This initiative is seen as crucial as transportation is the largest contributor to U.S. greenhouse gas emissions. Despite being difficult to replace due to lack of cost-effective and scalable alternatives, fuels for aviation, rail, and shipping need to transition towards lower-emission variants to limit global warming to 1.5C.

— USDA’s Food Safety and Inspection Service (FSIS) released results of a consumer survey concerning the ‘Product of USA’ label, in light of its proposed changes to this labeling for several products. The suggested new rule would only allow the use of this label or ‘Made in USA’ for meat from animals that have been born, raised, slaughtered, and processed entirely within the United States. Link for details.

The survey involved 4,800 adults, revealing that over 80% were perplexed by the ‘Product of the USA’ and ‘Made in the USA’ label claims. 63% thought that these labels signified that all production processes had to happen in the U.S., and 21% confessed they did not know the correct interpretation of these labels. There was also confusion over other aspects of meat labeling, with 18% erroneously believing that ‘USDA Choice’ implies the meat is a product of the United States, and 11% mistakenly thought that the USDA mark of inspection meant the same.

Despite the confusion, the survey revealed that consumers are willing to pay more for meat labeled ‘Product of USA’, particularly if the label indicates that all stages of production took place within the country.

As USDA’s proposed rule could have considerable implications, it is being closely monitored. Trading partners like Canada are also evaluating whether this potential change could negatively impact their products sold in the U.S.

— The pork sector, especially in Canada, is facing a challenging road to profitability in 2023 due to several adverse conditions. These include declining domestic demand, reduced export opportunities, and potential U.S. animal welfare regulations that could lead to lower prices. In this interview with RealAg Radio host Shaun Haney (link), Christine McCracken, Rabobank’s senior analyst for animal protein, says pork producers are currently incurring losses of $40 to $50 per head. Although there has been a slight improvement in feed costs, the high cost of production and price pressure could necessitate moves to reduce production.

The industry, after experiencing high demand during the Covid-19 pandemic, is now dealing with decreased consumption and oversupply in a post-pandemic environment. McCracken states that supply is currently outpacing demand and this imbalance will take time to correct.

Export markets do not seem to offer significant relief for the oversupply of pork, with McCracken doubting that consumers will switch their protein preferences significantly. Despite strong exports driven by reduced pork production in regions like China and Europe, global economic issues, such as inflation and economic slowdown, could reduce the demand for pork.

In addition, the recently upheld California’s Prop 12 animal welfare initiative could disrupt domestic markets. The law, which sets space requirements for livestock in production systems, stipulates that all pork sold in California must be produced in compliance with its regulations. Given that a significant amount of current pork production is not compliant with these new rules, the industry could be flooded with excess pork that isn’t eligible for export or for shipment into California. This could lead to additional challenges for producers.

— The Department of Justice (DOJ) Antitrust Division has updated its case against three poultry processors and a data consultant concerning the sharing of worker wage information. The notice (link) reveals that an amended complaint was filed on May 17, 2023, which includes settling the case with George’s Inc. George’s Foods was found to have participated in sharing information on wages and benefits for workers, and collaborating with competitors on compensation decisions.

As part of the settlement, George’s has agreed to comply with certain conditions and will pay restitution to its workers. This marks a significant development in the ongoing investigation into wage collusion within the poultry industry, potentially setting a precedent for other companies under scrutiny.

— A look at food prices around the world:

— End of Covid emergency rules means insurance halt for millions. More than 6 million people will be without health insurance after the end of Covid-related federal policies that prevented states from kicking people off their Medicaid programs, the nonpartisan Congressional Budget Office (CBO) reports. According to the CBO analysis, published in the Health Affairs journal, temporary federal rules during the pandemic made insurance on ObamaCare markets more affordable and increased Medicaid enrollment. Consequently, the uninsured rate for people in the U.S. who are not old enough for Medicare dropped to a record low of 8.3%. However, this rate is expected to rise to 10.1% by 2033, although this is still lower than pre-Covid levels.

In the next two years, the most significant change in coverage will occur in Medicaid, as 9.3 million people are projected to leave the program for other types of coverage, typically job-based plans. Nonetheless, around 6.2 million individuals will likely become uninsured due to ineligibility for Medicaid or inability to navigate the renewal process, according to CBO analyst Caroline Hanson.

Insurance through employment will continue to be the primary source of coverage for Americans under the age of 65 over the next decade, with approximately 155 million Americans expected to have employer-based insurance.

The CBO also projects that enrollment in Affordable Care Act (ACA) plans will grow to 22 million in 2025, from 19 million in 2023, but then decrease to roughly 18 million each year afterwards. This decline is attributed to the expiry of enhanced premium subsidies at the end of 2025, leaving it up to Congress to decide whether to extend the policy.

— Florida Governor Ron DeSantis announced his 2024 presidential campaign via Twitter Spaces, the audio-only platform from Twitter. However, the event, hosted by Elon Musk and tech entrepreneur David Sacks, faced a series of technical difficulties that led to criticism from both political sides. The event was initially delayed, then cut out a few minutes into the stream, and had to be restarted from a different account.

Only about 250,000 people ended up tuning in to the announcement, a number lower than expected. This situation opens up a challenge for DeSantis as he hopes to secure the 2024 GOP nomination, especially in light of potential competition from former President Donald Trump, who ridiculed the technical mishap.

The incident is also a setback for Elon Musk, who might have gained significant influence within the Republican party if the event had been successful. DeSantis’ choice to use Twitter Spaces over traditional media methods for his campaign announcement, including potential interviews with outlets like Fox News, was a significant departure from established practices.

— Biden’s veto of solar panel tariff measure sustained by House. Backers of a measure to repeal a two-year suspension of tariffs on solar panels fell short in their attempt override President Joe Biden’s veto in the House of Representatives. The resolution (HJRes. 39) sought to use the Congressional Review Act to overturn the administration’s use of a 1930 trade law to suspend new duties on solar panels from Cambodia, Malaysia, Thailand and Vietnam. The vote on overriding the veto was 214-205, short of the two-thirds majority required.

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