IMF Slightly Increases 2022 and 2023 Growth Forecasts but ‘Risks to Outlook Remain Tilted to Downside’

Crop insurance reform battle begins

Farm Journal
Farm Journal
(Farm Journal)

Crop insurance reform battle begins



In Today’s Digital Newspaper

The International Monetary Fund boosted its growth forecast for the year to 2.9% from a previous outlook of 2.7%. “Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe,” said IMF research director Pierre-Olivier Gourinchas. More info and graphics below.

China got some upbeat economic data Tuesday. Official readings on manufacturing and services improved sharply. The services purchasing managers’ index (PMI) rose to 54.0 in January from 39.4 in December. The manufacturing PMI rose to 54.4 from 41.6 in December. Readings above 50.0 suggest growth in the sector.

The Eurozone economy has avoided recession, but just barely. The fourth-quarter GDP for the zone came in at up 0.1% from the third quarter and up 1.9%, year-on-year. Those numbers were slightly better than market expectations.

On the ag sector front, Senate Ag pane leaders are urging the Biden administration to again take on Canada’s dairy policy via another dispute case via the U.S.-Mexico-Canada Agreement. USDA ag disaster aid payments keep slighting rising. Meanwhile, battle lines are being drawn over the call by some for reform of the crop insurance program. Letters and press releases on the matter are pouring out. Also, USDA’s Vilsack focused on farm bill possibilities with National Sustainable Agriculture Coalition (NASC) members. Details on all these topics below.

The food vs fuel debate is not just limited to the United States as Indonesia’s gov’t says moving to B35 will not endanger cooking oil supplies. More on that in Markets section.

United Airlines taps corn for its growing green fuel push/SAF; goal is to bring ethanol-based jet fuel to market by 2028. Details in Energy and Climate Change section.

The Biden administration will end the national health emergency designation for Covid on May 11. That means the U.S. will start treating the virus more as a seasonal health risk, such as the flu.

On the political front, former Indiana Gov. Mitch Daniels (R) announced that he will not run for the Senate in his home state.

A winter weather system moving through the U.S. today is creating dangerous travel conditions. More than 1,100 flights were canceled Monday, with a similar number of cancelations expected today. Widespread delays are also being reported. So far, the most affected airports are Dallas Love Field, Dallas-Fort Worth International, Austin Bergstrom International and Houston Bush International airports in Texas. About 38 million people from Texas and Oklahoma to Kentucky and West Virginia are under winter weather alerts as officials urge people to avoid any unnecessary journeys.

MARKET FOCUS

Equities today: Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward slightly higher openings. In Asia, Japan -0.4%. Hong Kong -1%. China -0.4%. India +0.1%. In Europe, at midday, London -1%. Paris -0.8%. Frankfurt -0.8%.

U.S. equities yesterday: The Dow ended down 260.99 points, 0.77%, at 33,717.09. The Nasdaq was down 227.90 points, 1.96%, at 11,393.81. The S&P 500 lost 52.79 points, 1.30%, at 4,017.77.

Agriculture markets yesterday:

  • Corn: March corn futures firmed 3/4 cent to $6.83 3/4.
  • Soy complex: March soybeans rose 25 3/4 cents to $15.35 1/4, marking the highest close since Jan. 18. March meal futures surged $15.20 to $488.70, a new contract high, while March soyoil rose 70 points to 61.32 cents.
  • Wheat: March SRW wheat firmed 2 1/2 cents to $7.52 1/2. March HRW wheat gained 4 1/2 cents to $8.73 3/4. March HRS wheat settled unchanged for the day at $9.21 1/2.
  • Cotton: March cotton fell 179 points to 85.10, marking the lowest close since Jan. 19.
  • Cattle: February live cattle rose $2.025 to $158.75, while April live cattle hit a contract high and gained $2.525 at $163.35. March feeder cattle futures rose 45 cents to $183.915, nearer the session high and hit a two-week high.
  • Hogs: February lean hog futures fell 72 1/2 cents to $75.15. April hogs rose 7 1/2 cents to $86.525 and finished near mid-range.

Ag markets today: Grain and soy complex futures traded lower overnight amid corrective selling and pressure from outside markets. As of 7:30 a.m. ET, corn futures were trading 1 to 2 cents lower, soybeans were 5 to 8 cents lower and wheat futures were mostly 4 to 8 cents lower. Front-month crude oil futures were around 75 cents lower, and the U.S. dollar index was about 125 points higher.

Technical viewpoints from Jim Wyckoff:

On tap today:

• U.S. employment-cost index for the fourth quarter is expected to rise 1.1% from the prior quarter. (8:30 a.m. ET) UPDATE: Compensation costs for civilian workers in the U.S. increased 1% on quarter in the last three months of 2022, a third straight slowdown, compared to a 1.2% rise in the previous quarter and slightly lower than market forecasts of 1.1%. Wages and salaries which make up about 70% of employment costs rose 1% (vs 1.3% in Q3) and benefit costs went up 0.8%, also lower than 1% in the previous period. Year-on-year, compensation costs rose 5.1%, slightly above 5% in Q3, but adjusted for inflation, they fell 1.3%.
• S&P CoreLogic Case-Shiller 20-city home-price index for November is expected to rise 7% from one year earlier. (9 a.m. ET)
• Institute for Supply Management-Chicago purchasing managers index is expected to rise to 45.3 in January from 44.9 one month earlier. (9:45 a.m. ET)
• Conference Board’s consumer confidence index is expected to rise to 109.5 in January from 108.3 one month earlier. (10 a.m. ET)
• Federal Reserve begins its two-day policy meeting (FOMC).
• China’s Caixin manufacturing index for January is out at 8:45 p.m. ET.

IMF: Global economy is poised to slow this year, before rebounding next year. The International Monetary Fund’s (IMF) outlook is less gloomy than its October forecast, and “could represent a turning point, with growth bottoming out and inflation declining.” In an updated assessment, IMF notes China’s sudden re-opening “paves the way for a rapid rebound in activity. And global financial conditions have improved as inflation pressures started to abate. This, and a weakening of the U.S. dollar from its November high, provided some modest relief to emerging and developing countries.”

Impact: IMF slightly increased its 2022 and 2023 growth forecasts. Global growth will slow from 3.4% in 2022 to 2.9% in 2023 then rebound to 3.1% in 2024.

For advanced economies, the slowdown will be more pronounced, with a decline from 2.7% last year to 1.2% and 1.4% this year and next. Nine out of 10 advanced economies will likely decelerate.

U.S. growth will slow to 1.4% in 2023, the IMF predicts, as Federal Reserve interest-rate hikes work their way through the economy.

Euro area conditions are more challenging, IMF adds, “despite signs of resilience to the energy crisis, a mild winter, and generous fiscal support.: With the European Central Bank tightening monetary policy, and a negative terms-of-trade shock — due to the increase in the price of its imported energy — IMF expects growth to bottom out at 0.7% this year.

Emerging market and developing economies have already bottomed out as a group, with growth expected to rise modestly to 4% and 4.2% this year and next.

China: Restrictions and Covid-19 outbreaks in China dampened activity last year. With the economy now re-opened, IMF sees growth rebounding to 5.2% this year as activity and mobility recover.

India remains a bright spot. Together with China, it will account for half of global growth this year, according to IMF, versus just a tenth for the U.S. and euro area combined.

Global inflation is expected to decline this year but even by 2024, projected average annual headline and core inflation will still be above pre-pandemic levels in more than 80% of countries.

IMF’s bottom line: The risks to the outlook remain tilted to the downside, “even if adverse risks have moderated since October and some positive factors gained in relevance.”

On the downside:

  • China’s recovery could stall amid greater-than-expected economic disruptions from current or future waves of COVID-19 infections or a sharper-than-expected slowdown in the property sector.
  • Inflation could remain stubbornly high amid continued labor-market tightness and growing wage pressures, requiring tighter monetary policies and a resulting sharper slowdown in activity.
  • An escalation of the war in Ukraine remains a major threat to global stability that could destabilize energy or food markets and further fragment the global economy.
  • A sudden repricing in financial markets, for instance in response to adverse inflation surprises, could tighten financial conditions, especially in emerging market and developing economies.

On the upside:

  • Strong household balance sheets, together with tight labor markets and solid wage growth could help sustain private demand, although potentially complicating the fight against inflation.
  • Easing supply-chain bottlenecks and labor markets cooling due to falling vacancies could allow for a softer landing, requiring less monetary tightening.

Americans saved 3.4% of their income in December, down from 7.5% a year earlier and a record high in April 2020. Credit-card interest rates have been rising, and Fed officials have signaled an additional 0.25-percentage-point increase to the central bank’s benchmark rate on Wednesday. Inflation remains elevated. A downshifting consumer is a key reason that some economists put the probability of a recession in the next 12 months at 61% — though many say it might be avoided if spending patterns stabilize. Link to more via the WSJ.

Eurozone economy posts surprise expansion in the fourth quarter, curbing recession fears. The Eurozone economy grew slightly by 0.1% in the final quarter of 2022, easing from a 0.3% expansion in the previous three-month period but beating market consensus of a 0.1% contraction, a preliminary estimate showed. It was the weakest pace of expansion since the first three months of 2021 as demand and activity were hit by high inflation and rising borrowing costs, and supply chain bottlenecks.

Amongst the bloc’s largest economies, the GDP grew in Spain (0.2%, the same as in Q3) and France (0.1% vs 0.2%), but contracted in Germany (-0.2% vs 0.5%) and Italy (-0.1% vs 0.5%).

Brexit is costing the U.K. economy £100 billion a year ($124 billion), with the effects spanning everything from business investment to the ability of companies to hire workers. An analysis by Bloomberg Economics three years after Britain left the European Union paints a bleak picture of the damage done by the way the split has been implemented by the Conservative government. Link for details.

Ford will reduce prices and increase production of its top-selling battery-powered vehicle, the latest sign of intensifying competition in the electric car market following Tesla’s recent EV price drop.

White House to release budget proposals March 9, according to reports. Federal law mandates that the White House submit a budget to Congress on the first Monday in February. But on more than a few occasions, the president has not met the deadline. Recall that Congress frequently alters White House budget requests.

Market perspectives:

• Outside markets: The U.S. dollar index was firmer, with the euro, yen and British pound all weaker versus the U.S. currency. The yield on the 10-year US Treasury note was weaker, trading around 3.52%, amid a mixed tone in global government bond yields. Crude oil futures were under pressure, with U.S. crude around $77.20 per barrel and Brent around $83.85 per barrel. Gold and silver futures were lower, with gold around $1,911 per troy ounce and silver around $23.34 per troy ounce.

· • The dollar Is facing a fourth monthly loss on Tuesday as investors reckon a peak in U.S. interest rates could swing into view as soon as this week’s Federal Reserve meeting. The U.S. dollar index is down 1.3% for January so far, though it rose 0.3% to 102.19 overnight.

• Natural gas prices hit their lowest level in 21 months. Some parts of the East Coast have had near-record stretches of zero snowfall, even as freezing temperatures and winter storms blow through the southern states.

• Indonesia: Moving to B35 will not endanger cooking oil supplies. Domestic cooking oil supplies will not be disrupted in Indonesia when the country launches its B35 biodiesel mandate Feb. 1, Airlnagga Hartarto, coordinating minister for economics, told reporters. The B35 mandate would increase the level of palm oil in biodiesel to 35% from a current 30%, in part in a bid to utilize more palm oil domestically due to restrictions in Europe. “The B35 program will not disrupt supply needed for (food) consumption,” he said. “Domestic supply is guaranteed to be enough.” The government Monday (Jan. 30) called on local cooking oil producers to boost supplies on the domestic market by 50% over the next three months, bringing it to a level of 450,000 tonnes as demand is expected to rise ahead of Islamic religious activities. The increase to B35 is expected to boost consumption of FAME (fatty acid methyl ester) fuel from palm oil to 13.15 million kiloliters, up from 10.1 million last year. Reuters quoted industry experts as saying the increase would mean 11 million tonnes of crude palm oil consumption compared with 9.6 million last year.

• Ag trade: Jordan purchased 60,000 MT of optional origin milling wheat. Egypt tendered to buy up to 60,000 MT of wheat via the World Food Bank.

• NWS weather: Prolonged and significant ice storm to continue impacting a large area from the southern Plains to the Tennessee Valley... ...Dangerous wind chills over the central and western United States linger through this morning... ...Heavy rain and scattered flash floods possible across parts of the Deep South and Southeast by midweek.

Items in Pro Farmer’s First Thing Today include:

• Corrective selling in grain markets overnight
• Consultant maintains Brazil and Argentina crop estimates, cuts Uruguay bean crop
• HRW conditions decline further in January
• Central European countries ask EU to ease problems caused by influx of Ukrainian grain
• Cattle Inventory Report expected to show additional cattle herd contraction
• Cattle traders build in some premium
• Cash hog index extends upturn

RUSSIA/UKRAINE

— Russia says Xi Jinping will visit Moscow around Ukraine war anniversary. Chinese President Xi Jinping is expected to visit Russia in spring, the Russian foreign ministry said, as the first anniversary of the start of the Ukraine war approaches. In a statement late on Monday, the ministry said Xi’s visit would be a “main event” on the two countries’ bilateral agenda, although Beijing is yet to confirm the trip. Russia’s invasion of Ukraine, which started on Feb. 24 last year, led to Moscow being sanctioned by Western nations.

  • The U.S. will not be sending F-16 fighter jets to Ukraine — at least not now. Asked by a reporter outside the White House Monday if the U.S. would transfer the warplanes, President Joe Biden responded: “No.”
  • Biden said he plans to visit Poland, but didn’t specify when, amid reports he was considering traveling to Europe for the Feb. 24 one-year anniversary of Russia’s war on Ukraine.
  • Russia’s government published a decree detailing the rules behind a presidential ban of oil sales to foreign clients adhering to a price cap imposed by the US and several allies.
  • Central European countries ask EU to ease problems caused by influx of Ukrainian grain. Six central European countries have asked the European Union to take steps to mitigate problems caused by increased Ukrainian grain imports into the region, saying the influx has cut prices and hurt local farmers, government officials said. Hungary, Poland, the Czech Republic, Slovakia, Romania and Bulgaria asked the EU to transport Ukrainian grain beyond the embattle country’s immediate neighbors and to provide assistance. “If the EU acts in unity to help overland grain exports, then the burden should also be shared equally among member states,” an official from Hungary’s ag ministry said.
  • Russia is undertaking ship-to-ship oil transfers at the Spanish enclave of Ceuta on the North African coast to save on shipping costs.

  • Russia boosts China trade to counter Western sanctions. Trade between China and Russia boomed last year, providing a lifeline to Russia’s beleaguered economy and showing the limits of Western sanctions. A report by the D.C.-based nongovernmental organization Free Russia Foundation said Moscow boosted imports of technologies critical to its war in Ukraine including semiconductors and microchips from China. China’s increased purchases of Russian exports, driven by energy sales, more than offset the declines from major Western trading partners.

POLICY UPDATE

— Crop insurance proponents send letter (link) again urging no cuts to crop insurance.

Premium subsidies for crop insurance near $12 billion, a year. In a decade, government outlays to subsidize crop insurance increased 60%, expanding in sync with the rapid growth in acreage covered by the policies, according to Risk Management Agency data.

Some $11.6 bil. in premium subsidies were paid for the 2022 crop year, a record amount.

Big growth: Premium subsidies cost nearly $7 bil. in crop year 2012, when 282.9 mil. acres were insured. In 2022, 493.3 mil. acres were insured.

To encourage enrollment, the gov’t pays 60 cents of each $1 of premium. Premiums totaled $18.4 bil. on 2022 crops, with $15.9 bil. paid in indemnities.

Some groups are already using this data to call for crop insurance reforms via the new farm bill making its way through Congress. But crop, livestock and dairy insurance proponents say they are already in the process of educating lawmakers and staff regarding the importance to keep improving the risk management tool supported by many farm groups and lawmakers.

— USDA’s Vilsack focuses on farm bill possibilities with National Sustainable Agriculture Coalition (NASC). USDA Secretary Tom Vilsack Monday addressed the winter meeting of the NASC, telling members that USDA’s focus has been on developing sustainable food systems via efforts into areas such as funding an organic transition program and helping farmers turn waste into biofuels.

Vilsack said USDA believes there are more options for farmers other than “get big or get out. There’s got to be a system in which the many and most have a fair shot.”

Vilsack noted the administration’s focus on a “true local regional food system” that he said would be more resilient and less susceptible to foreign conflicts, international trade and production in other countries. Vilsack specifically urged state leaders to get more involved. “Why can’t they invest in value-added opportunities? What’s preventing them from encouraging ecosystem markets in their state? Why aren’t they investing in bio-based product manufacturing and creating opportunities for agricultural waste? How about using some of that money to support local and regional food systems? Maybe they can help with input costs,” Vilsack said.

He urged the NSAC members to focus their efforts on educating lawmakers and urged them to push lawmakers to keep expanded funding in place. “There’s historic money invested in this and there are some people who want to take it away,” he stressed.

— USDA aid payments rise. Payments under the Emergency Relief Program (ERP) increased to $7.37 billion as of Jan. 29, up from $7.33 billion as of Jan. 22. The total includes non-specialty crop payments of $6.26 billion ($6.25 billion prior) and specialty crop payments of $1.11 billion ($1.10 billion prior).

Payments under the Coronavirus Food Assistance Program 2 (CFAP 2) rose to $19.35 billion as of Jan. 29, up from $19.34 billion the prior week, including $14.46 billion in original CFAP 2 payments ($14.45 billion prior) and top-up payments of $4.89 billion ($4.87 billion prior).

— Two of the most popular policies Americans say the new 118th Congress should consider: immigration reform and border security. That’s according to a recent NBC News poll, which tested seven different policy proposals. Support for a pathway to citizenship is backed by an overwhelming majority of Democrats (94%), independents (77%) and Republicans (67%). The least popular proposals: making cuts to the defense budget (31% support) and passing legislation that place additional restrictions on abortion (26%).

CHINA UPDATE

— U.S. halts Huawei export licenses. The Biden administration reportedly has stopped providing U.S. companies with licenses to export to Huawei as it moves towards imposing a total ban on the sale of American technology to the Chinese telecom equipment giant. U.S. security officials believe the Shenzhen-based tech company helps China engage in espionage, which Huawei denies.

— China’s hog numbers continue to rise. China’s sow herd increased 0.6% in December from November to 43.9 million head, according to ag ministry data. Sow inventories rose 1.4% from the end of 2021. China’s pig herd increased 1.9% in December from the month before to 452.6 million head and was 0.7% larger than the previous year.

— China’s services, manufacturing activity rebounded in January. China’s official gauges measuring services, manufacturing and construction activity all rebounded sharply in January as the nation recovered from a surge in Covid infections after a sudden reopening at the end of last year. China’s nonmanufacturing PMI, which covers service and construction activity, moved above the 50 level, which separates activity contraction from expansion, for the first time since September 2022. The manufacturing PMI indicated activity expanded for the first time in four months.

TRADE POLICY

— Senate Agriculture leaders call for Biden administration to pursue another USMCA dairy case against Canada. Senate Agriculture Committee Chair Debbie Stabenow (D-Mich.) and Ranking Member John Boozman (R-Ark.) are urging U.S. Trade Representative Katherine Tai to request a second dispute settlement panel under the U.S.-Mexico-Canada Agreement (USMCA) over Canada’s implementation of tariff-rate quotas (TRQs) for dairy. Even though the U.S. has already won one case via USMCA on Canada’s TRQ implementation, the lawmakers said Canada “continues to prevent U.S. dairy farmers and manufacturers from realizing the full benefits of the dairy market access commitments Canada made in USMCA.”

They contend Canada has “wrongly” interpreted the first USMCA panel ruling and continue to exclude retailers and food service operators from the TRQs. The U.S. requested consultations with Canada over the matter, but the lawmakers want another dispute settlement action to be deployed.

Next step: A dispute settlement panel after consultations, with a panel appointed to review the situation with 150 days to produce a draft report which would be finalized after a public comment period. The action could pave the way for the U.S. to deploy retaliatory measures.

ENERGY & CLIMATE CHANGE

— The European Union is seeking to rapidly accelerate production of clean technologies by offering tax credits and domestic subsidies to companies in a bid to catch up with President Joe Biden’s green package. The European Commission, the EU’s executive arm, will propose a plan enabling the bloc to avoid strategic dependencies on key clean technologies by diversifying suppliers and developing local production, according to a draft of the commission’s Green Deal Industrial Plan seen by Bloomberg News (link).

— United Airlines taps corn for its growing green fuel push/SAF; goal is to bring ethanol-based jet fuel to market by 2028. United Airlines is teaming up with a corn ethanol maker in a bid to ramp up production of green jet fuel to deal with carbon credits and climate change. United Airlines Holdings Inc., biofuels producer Green Plains Inc. and energy infrastructure firm Tallgrass Energy Partners LP are jointly investing up to $50 million to form Blue Blade Energy. The venture seeks to bring to market technology that would simplify making sustainable aviation fuel, or SAF, from ethanol and other alcohol-based ingredients, also known as feedstocks.

United plans to buy as many as 2.7 billion gallons of the fuel, its biggest SAF agreement by volume, as the airline works to reach net zero emissions by 2050. The venture centers around the idea that ethanol will beat out other commodities, like vegetable oil, as a preferred ingredient for making green jet fuel. “The trouble with SAF is the lack of feedstock,” United Airlines Ventures President Michael Leskinen said in an interview with Bloomberg. Blue Blade “has the potential to be very consequential in moving the needle in how much SAF is actually produced in the United States.”

The initial investment is for testing development. If that’s a success, then hundreds of millions in financing would be needed to build an initial production plant, according to Leskinen. The next step would be to build a test plant in 2024, followed by a facility that could start operating by 2028. The offtake agreement could provide for enough SAF to fly more than 50,000 flights annually between United’s hub airports in Chicago and Denver.

The Biden administration has challenged refiners and others in the supply chain to boost production of SAF to 3 billion gallons a year as part of an effort to cut aviation emissions 20% by 2030. The global aviation industry accounts for about 3% of the gases warming the planet today, though the sector’s emissions are rising fast.

HEALTH UPDATE

Summary:

  • Global Covid-19 cases at at 670,604,871 with 6,831,761 deaths.
  • U.S. case count is at 102,310,653 with 1,107,855 deaths.
  • Johns Hopkins University Coronavirus Resource Center says there have been 668,814,259 doses administered, 268,927,705 have received at least one vaccine, or 81.0% of the U.S. population.

— The White House announced that it plans to end the public health emergency for Covid-19 on May 11. The announcement came as a statement of administration policy (link). The move to end the national emergency and public health emergency declarations would formally restructure the federal coronavirus response to treat the virus as an endemic threat to public health that can be managed through agencies’ normal authorities. Combined with the drawdown of most federal Covid-19 relief money, it would also shift the development of vaccines and treatments away from the direct management of the federal government.

The national emergency is currently set to expire on March 1, while the public health emergency is currently scheduled to expire on April 11.

The White House statement opposes resolutions being brought to the floor this week by House Republicans to bring the emergency to an immediate end. House Republicans are also gearing up to launch investigations on the federal government’s response to Covid-19. The administration warned that approval of the House measures would also immediately end the Title 42 restrictions at the U.S. border. The administration noted, however, that due to litigation, Title 42 remains in place even as the administration has sought to end the action, a situation which resulted in court action to keep the policy in place.

— A new study found Covid to be the eighth most common cause of death in kids. Children and young people make up about 0.1% of the 1.1 million Americans who’ve died of the virus. But that’s still more than 1,300 people. The study found that Covid has surpassed the flu and pneumonia as a leading cause of death for kids, following shortly after homicides and heart disease.

— Major drug stores including CVS Health, Walgreens and Walmart are cutting back pharmacy hours due to a widespread pharmacist shortage, as the Bureau of Labor Statistics reports employment growth for pharmacists is projected to grow much more slowly than other occupations at 2%.

POLITICS & ELECTIONS

— Mitch Daniels passes on Senate campaign. Former Indiana Gov. Mitch Daniels (R) announced that he will not run for the Senate in his home state, dealing a recruiting blow to Republicans who had hoped he would enter the race in the Hoosier State.

CONGRESS

— Biden calls on McCarthy to show his budget plan. House Speaker Kevin McCarthy’s (R-Calif.) position that cuts to Medicare and Social Security are not on the table in exchange for a debt ceiling increase has drawn skepticism from the White House. McCarthy and President Biden are set to meet Wednesday. Asked by CNN what his message to McCarthy would be in that meeting, President Biden said it would be “show me your budget and I’ll show you mine.”

Meanwhile, nearly half of Senate Republicans have signed on to a letter to Biden warning they will not vote for any bill to raise the nation’s debt limit unless it’s connected to spending cuts to address the nation’s $31 trillion debt. The letter says it is the policy of the Republican conference that any increase in the debt ceiling “must be accompanied by cuts in federal spending or ‘meaningful structural reform in spending.’”

OTHER ITEMS OF NOTE

— Biden commits over $4 billion to fixing Baltimore rail tunnel. The investment, which President Biden on Monday said would create “20,000 good-paying construction jobs,” is part of a $1 trillion bipartisan infrastructure bill that he signed into law in 2021.

— USDA announces $2.7 billion in rural electric infrastructure efforts. USDA announced that 64 electric cooperatives and utilities will receive $2.7 billion in loans to modernize the rural electric grid and bolster grid security. The loans will be made in Alabama, Arkansas, Colorado, Florida, Georgia, Iowa, Indiana, Kentucky, Michigan, Minnesota, Mississippi, Montana, Nebraska, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington and Wisconsin.

USDA said the action includes $613 million in loans for installation of upgrading smart grid technologies.

Nearly half of the awards will go to underserved communities with many of the efforts to upgrade and install new power lines. USDA said that additional financing will be announced in coming months via more than $12 billion in funding from the Inflation Reduction Act (IRA) to expand clean energy in rural areas.

KEY LINKS


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 |