Jobs report key focus today | DOJ antitrust focus on U.S. ag sector | NCBA on key issues
In Today’s Digital Newspaper
Market Focus:
• Jobs report key focus today
• Restaurants, grocers can’t find enough workers
• Former N.Y. Fed president: Sharp rise in inflation will probably subside over next year
• Russia plans to abandon U.S. dollar as part of its sovereign wealth fund
• U.S. solidified its position last year as a top exporter of natural gas”
• U.S. oil demand and gasoline consumption declined last week
• Ag demand update
• Gains for corn, soybeans, wheat overnight
• Warm June with timely rain has helped the French wheat crop bounce back
• Duty on Russian wheat exports climbs a bit
• Russian ag minister maintains wheat crop forecast
• Cargill to build palm oil refinery in Indonesia
• Beef runup continues
• Choice boxed beef climbed another 39 cents on Thursday and Select rose $1.28
• Pork prices also moving higher
Policy Focus:
• Biden continues to compromise on infrastructure, but is it a setup for wary GOP?
• Infrastructure talks continue today at White House, likely during weekend
Livestock, Food & Beverage Industry Update:
• JBS plants in U.S., Canada and Australia running again
• White House urges companies to shore up defenses against ransomware
• FBI compares ransomware to 9/11: WSJ
• Best practices for addressing ransomware attacks
• Cyber threat to U.S. food supply must be addressed: Rep. Bustos
• Antitrust focus coming for U.S. ag industry
• USDA to address lack of competitiveness concerns in cattle market Vilsack
• Farm-state lawmakers urge overhaul of meat production practices
• MCOOL is not MHOT for NCBA
• NCBA on other meat industry issues
Coronavirus Update:
• Odd timing: Fauci urges China to release Wuhan records
• U.S. vaccine plans
Other Items of Note:
• Cotton AWP moves back higher
• U.S. finds no evidence of aliens but does not rule out
MARKET FOCUS
Equities today: Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly lower openings. In Asia, most major benchmarks ended trading on a mixed note. The Shanghai Composite Index ticked up 0.2%. Japan’s Nikkei 225 declined 0.4% and Hong Kong’s Hang Seng Index slid 0.2%.
U.S. equities yesterday: The Dow ended down 23.34 points, 0.07%, at 34,577.04. The Nasdaq declined 141.28 points, 1.03%, at 13,614.51. The S&P 500 fell 15.27 points, 0.36%, at 4,192.85.
On tap today:
• Federal Reserve Chairman Jerome Powell and European Central Bank President Christine Lagarde speak on central banks and climate change at 7 a.m. ET.
• U.S. nonfarm payrolls are expected to increase 671,000 in May and the unemployment rate is expected to fall to 5.9% from 6.1% a month earlier. (8:30 a.m. ET)
• U.S. factory orders for April are expected to fall 0.2% from the prior month. (10 a.m. ET)
• Baker Hughes rig count is out at 1 p.m. ET.
• CFTC Commitments of Traders report, 3:30 p.m. ET.
• Treasury Secretary Janet Yellen is in London for a Group of Seven finance ministers meeting.
Jobs update awaited. The May Employment report is expected to show a healthy rise in nonfarm payrolls in May, but the expectations range is extremely wide as the report has become less predictable as the economy continues to recover from the pandemic. The unemployment rate is also expected to dip to 5.9% after edging up to 6.1% in April. Beyond the rise in nonfarm payrolls, other areas of focus will be on the labor force participation rate which has been struggling to rise coming out of the pandemic. Wages will be another attention point given continued reports of businesses opting to boost wages and bonuses in a bid to attract workers back to scores of jobs that remain unfilled. But even if the nonfarm payrolls rise by 1 million for May, it would still mean around 7 million remain unemployed.
President Biden raised expectations with a tweet yesterday that touted the latest weekly jobless data: “Unemployment claims are down 50% and 64% of adults are vaccinated since I took office. That’s progress.”
Tight labor market is hampering new restaurant and supermarket openings, putting a potential check on growth in the food industry, the Wall Street Journal reports (link). Many food sellers are adding stores to capitalize on high consumer spending as Americans emerge from a year spent largely at home. But grocers and restaurants say they are struggling to hire all the workers they want. They are adding perks and bonuses to entice job seekers and, in some cases, delaying openings.
There were a record-high 8.1 million unfilled jobs at the end of March, according to the Labor Department, including 993,000 at restaurants and hotels and 878,000 at stores. Businesses that can’t fill jobs may close a part of a restaurant, stock shelves more slowly or serve fewer customers — accommodations that could reduce sales and, economists say, act as a brake on what otherwise is expected to be strong economic growth this year.
U.S. economy is 93.03% recovered, according to the latest reading of the “recovery tracker” compiled by Oxford Economics. The index combines a range of high-frequency statistics — Covid cases, hotel stays, job postings, mortgage applications and the like — to gauge economic activity in relation to late January, before the pandemic turned everything upside down.
Sharp rise in inflation will probably subside over the next year. But not definitely. “The Biden administration is pursuing an infrastructure bill and other legislation that will pile on added stimulus. Households have done enough saving during the pandemic to sustain spending long after the fiscal impulse ends. And the Fed has committed to keeping short-term interest rates at zero until the economy has achieved maximum employment and inflation has reached at least 2% and is expected to stay above 2% for some time. In other words, the Fed — according to its own policies — is likely to act too late to prevent the economy from overheating. So, no matter what prices do this year, the risk of higher inflation down the road remains elevated,” former New York Fed President Bill Dudley writes at Bloomberg Opinion (link).
Meanwhile, developed countries have not experienced rapid inflation in decades, but that streak could soon end, the Financial Times reports (link).
Market perspectives:
• Outside markets: The U.S. dollar index is slightly higher and hitting a three-week high overnight as the greenback bulls have had a good week. The yield on the 10-year US Treasury note was flat ahead of the jobs report, while there was a narrowly mixed tone in global government bond yields. Gold and silver futures were little changed ahead of the Employment update, with silver around $1,873 per troy ounce and silver around $27.49 per troy ounce.
• Russia plans to abandon the U.S. dollar as part of its sovereign wealth fund. Russia currently has 35% of the fund in greenbacks but will cut that to zero. Many veteran market watchers reckon that Russia and China will continue to scheme to erode the dollar’s global dominance. While Russia’s economy is not that significant on the world stage, China boasts the world’s second-largest economy that will move to the number-one spot likely within a decade. Both Russia and China correctly claim the U.S. uses the might of the dollar for political purposes, such as sanctions.
• Crude oil is moving higher ahead of U.S. trading after a relatively quiet finish in Thursday U.S. trade. U.S. crude is trading around $69.05 per barrel while Brent is around $71.50 per barrel. Futures were weaker in Asian action, with U.S. crude down seven cents at $68.74 per barrel while Brent crude was down nine cents at $71.72 per barrel.
• U.S. solidified its position last year — even amid a pandemic — as a top exporter of natural gas. The International Gas Union’s World LNG Report, released Thursday morning, finds the U.S. exported 44.8 metric tons of liquified natural gas, or LNG, in 2020, the third most of any country behind Qatar and Australia. U.S. LNG exports increased 33% from 2019, the largest growth in the world. Most of the growth this year and into the future will come from increasing demand in Asian countries that are looking to diversify off dirtier coal while serving the energy needs of their growing populations. Europe is expected to steadily import LNG from the U.S., even as countries such as France apply more scrutiny to the emissions associated with the shale gas transported through the export facilities. In written responses to the Energy Committee that oversaw her confirmation, Energy Secretary Jennifer Granholm said U.S. LNG exports can play an “important role” in reducing consumption of dirtier fuels, but also said she wants to work with the oil and gas industry to “reduce emissions associated” with LNG.
• U.S. oil demand and gasoline consumption declined last week after two weeks of big gains due to the shutdown of the Colonial Pipeline. Overall oil demand fell to 19.1 million barrels per day from nearly 20 million barrels p/d the previous week, the Energy Information Administration (EIA) reported, while gasoline consumption declined to 9.1 million barrels p/d compared to 9.5 million barrels p/d. But oil prices still rose as the EIA also reported a large draw in crude inventory stocks of 5.1 million barrels.
• Ag demand: Indonesia reportedly passed on a tender to buy 240,000 MT of feed wheat. Iran’s state agency is thought to have purchased around 195,000 MT of milling wheat in a tender in which it was seeking 60,000 MT of the grain.
Items in Pro Farmer’s First Thing Today include:
• Gains for corn, soybeans, wheat overnight
• Warm June with timely rain has helped the French wheat crop bounce back
• Duty on Russian wheat exports climbs a bit
• Russian ag minister maintains wheat crop forecast
• Cargill to build palm oil refinery in Indonesia
• Beef runup continues
• Choice boxed beef climbed another 39 cents on Thursday and Select rose $1.28
• Pork prices also moving higher
POLICY FOCUS
— Biden offers GOP several infrastructure compromises, including tax and using $75 billion of unspent Covid funding. President Joe Biden is clearly trying to do his style of negotiating with key Republicans in an attempt to find the correct middle ground to get enough votes for a trillion dollar-plus infrastructure package.
Biden signaled he could accept a narrower infrastructure package that didn’t include raising the corporate tax rate to 28% from 21%, telling a top Senate Republican that he wants $1 trillion in new spending and floating alternative ways to pay for the measure.
The new proposal includes a minimum corporate tax of 15% for the nation’s largest companies and the repurposing of some Covid-19 aid funding. According to details the administration released earlier this year, the tax would apply only to companies with income exceeding $2 billion. The result is that just 180 companies would even meet the income threshold and just 45 would pay the tax, according to administration estimates. Tax lawyers and others say a 15% minimum tax on financial-statement income could be difficult to administer and implement and would cede some U.S. tax rules to accounting regulators. But, the minimum tax wouldn’t directly reverse the 2017 law, passed by Republicans with no Democratic support.
Regarding tapping $75 billion of unspent Covid aid, the White House said the funding would come from leftover Covid-19 aid passed during the Trump administration. Republicans have pushed redirecting $700 billion of existing Covid aid as an infrastructure pay-for.
Biden’s latest offer marks a clear and late shift from the White House. “This should be completely acceptable to a number of Republicans who have said their bottom line is they want to leave the 2017 tax law untouched,” White House press secretary Jen Psaki said Thursday. “We’re also going to keep options open and keep a range of paths open,” she said.
Talks will continue today and likely through the weekend on the size of the infrastructure plan and how to fund it.
GOP aides on Thursday signaled skepticism of Biden’s ideas. This will give encourage some Democratic lawmakers to move ahead without Republican support while others have supported continuing talks. Senate Minority Leader Mitch McConnell (R-Ky.) said Republicans were still hoping to reach a bipartisan agreement but were cool to the idea of higher taxes. “Once you get into this tax increase area, you are going to create an enormous amount of controversy, so I don’t think that’s going to appeal to members of my party,” he said at an event in Kentucky on Thursday. “My advice to the president and the administration: Let’s reach an agreement on infrastructure that’s smaller, but still significant and fully paid for.”
Of concern to Republicans and some Democrats, Biden’s latest counterproposal includes changing the longstanding income-tax rules for investment appreciation when a taxpayer dies and eliminating tax provisions that benefit fossil-fuel companies.
Next steps: As noted, Biden will meet today with Sen. Shelley More Capito (R-W.Va.). Republicans have been discussing making a counteroffer to the White House today. Psaki said Biden isn’t abandoning his goal of raising the corporate tax rate and would continue to push the measure in other negotiations, while reiterating the White House wouldn’t support higher gasoline taxes or user fees on drivers, as some Republicans have suggested. She also played down any immediate deadline, after other administration officials said the
Timeline: Psaki played down any immediate deadline, despite reports over the weekend that the White House wanted to see significant movement by Monday, when Congress returns to Washington.
Bottom line: Infrastructure policy differences are narrowing, but they are still wide on the total spending side and efforts to help offset some of whatever final tally may be agreed to. But President Biden is making the moves that would likely give him and Democrats some needed cover if a final agreement fall shorts of majority support.
LIVESTOCK, FOOD & BEVERAGE INDUSTRY
— JBS plants in the U.S., Canada and Australia are running again. JBS on Thursday said nearly all of it operations on Thursday were running, amid some scheduling of 10-hour shifts or weekend work. JBS said its plants around the world were operating at normal capacity Thursday following a ransomware attack.
JBS said its encrypted backup servers were not affected, allowing the company to resume operations more quickly. JBS estimated that less than one day’s worth of meat production was lost during the shutdowns, and that it would make up the difference by the end of next week. “The criminals were never able to access our core systems, which greatly reduced potential impact,” said Andre Nogueira, chief executive of JBS’ U.S. division.
Sen. Chuck Grassley (R-Iowa) used the JBS situation to force a livestock industry structural move he has long called for. Grassley said the cyberattack’s fallout showed the risks of industry consolidation that has led to a handful of big companies processing the bulk of America’s meat. “If you had 10 companies instead of four, or 20 companies instead of four, we’d be less vulnerable if one of them was hacked,” said Grassley, who has proposed legislation that he said would require meatpackers to compete more directly on livestock purchases. “It ought to teach us something, that there have been too many mergers,” he said.
Background: Grassley and some other farm-state senators in March introduced legislation that would require beef processors to make at least half of their weekly livestock purchases on the open market, versus through pre-negotiated contracts. Proponents say the requirement would make cattle markets more competitive and improve prices for ranchers. Other senators proposed a separate bill in March that would set regional minimum cash prices for cattle and increase reporting requirements for processors.
Bottom line: JBS’ note that the cyberattack caused less than one day’s worth of meat production, and that it would make up the difference by the end of next week, shows the firm was prepared for any major attack. But as noted elsewhere in this report, lawmakers and Biden administration officials are pushing for major changes on this topic.
— Best practices for addressing ransomware attacks. The Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Agency (CISA) released a document providing CISA recommended best practices for addressing ransomware attacks. Link to document. Lisa Monaco, deputy attorney general at the Justice Department, issued a memorandum to U.S. attorney’s offices around the country on Thursday urging all ransomware investigations to be coordinated with a ransomware task force created in April. The move is one of the first major efforts by the Biden administration in response to the growing threat of attacks in which hackers disrupt services and demand that companies pay ransom to unfreeze data and computers. Victims have included Colonial Pipeline Co. and JBS, the world’s largest meat processor. USDA Secretary Tom Vilsack on Thursday urged corporate leaders to pay attention to guidance issued by the CISA to understand what steps need to be taken. “The lesson here is: Get the guidance, follow the guidance, harden your system,” Vilsack said.
In an open letter, the White House urged private companies to better protect themselves from ransomware attacks. The White House is urging private companies to take ‘immediate steps’ to better protect themselves against ransomware attacks following a pair of high-profile episodes in which hackers allegedly located in Russia targeted a major oil pipeline company and a meat supplier with operations in the United States. In an open letter to corporate executives and business leaders, the National Security Council’s top cyber official said strengthening the nation’s resistance to cyberattacks is a top priority for Biden. But she also stressed that “the private sector has a distinct and key responsibility.”
Meanwhile, FBI Director Christopher Wray said the agency is investigating about 100 different types of ransomware, many of which trace back to actors in Russia, and compared the current spate of cyberattacks with the challenge posed by the Sept. 11, 2001, terrorist attacks. “There are a lot of parallels, there’s a lot of importance, and a lot of focus by us on disruption and prevention,” Wray said in an interview on Thursday with the Wall Street Journal. ”There’s a shared responsibility, not just across government agencies but across the private sector and even the average American.”
— Cyber threat to U.S. food supply must be addressed: Rep. Bustos. The chair of the U.S. House Agriculture Committee’s Risk Management panel says she’s looking closely at the cybersecurity threat to the food supply chain after the virtual attack on JBS. “We’ve got to do what we can to help prevent this going forward,” Rep. Cheri Bustos, an Illinois Democrat, said in a phone interview with Bloomberg Thursday.
“This was huge,” she said. “The plants are mostly back up now, but even temporary closures can have a big impact, and we saw that with JBS. Bustos said congressional hearings are appropriate to address unanswered questions on the attack and broader risk. The cyberattack that forced JBS to halt operations across the globe appears to be having a “short term” impact on meat prices, Bustos said.
— USDA is planning to address concerns about lack of competitiveness in the cattle market, USDA Secretary Tom Vilsack told Politico. USDA is planning several moves in the coming months to improve cattle market transparency and boost meat processing capacity after complaints of extreme consolidation, Vilsack said. Meanwhile, Vilsack told Montana Ag Network last week that USDA would be “aggressive” in the coming weeks to promote more openness and transparency in the cattle market, but it remains to be seen what USDA plans to do. “Obviously the Department of Justice is going to make its decisions, as it should, but what we can do at USDA is figure out ways in which we can provide support for processing capacity,” Vilsack told Politico. “We can provide potentially greater price discovery by having more processing capacity — we may have a cash market that is more transparent, more open and therefore more reliable.” Vilsack said USDA can also “take a look” at the Packers and Stockyards Act to “make sure that we are able to take action against unfair, deceptive practices.”
— Antitrust focus coming for U.S. ag industry. Richard Powers, the acting assistant attorney general for antitrust, said Thursday that prosecutors plan to continue to focus on the agriculture industry. “Agriculture is a priority for us moving forward,” Powers said, speaking at a virtual event hosted by Canada’s Competition Bureau. He highlighted the DOJ’s investigation into price-fixing among chicken companies, which has so far netted a guilty plea and $107 million fine for JBS’ Pilgrim’s Pride, and indictments against Georgia’s Claxton Poultry Farms and 10 executives. We are told the initial focus will be on the meat processing and seed industries.
— NCBA presses Congress not to resurrect MCOOL, comments on market reform proposals. Stressing “significant challenges” facing cattle producers, the National Cattlemen’s Beef Association (NCBA) is pressing Congress to focus on several cattle market reform initiatives while also urging lawmakers not to resurrect mandatory country of origin labeling (MCOOL).
For cattle producers, “soaring input costs, devastating weather patterns, and beef processing woes have resulted in enormous barriers to producer profitability,” the group wrote in a June 1 letter (link) to House and Senate Agriculture Committee leaders. “Further, supply chain disruptions caused by Covid-19 have exacerbated these existing problems and severely impacted America’s cattlemen and women.” The letter was also signed by NCBA state affiliates.
NCBA urged lawmakers to focus on cattle market/price reform and other proposals it says will help address “critical” areas of concern to the sector.
NCBA pushed back forcefully on calls from some producer groups and some lawmakers for a revival of MCOOL. “While some elected officials and a very small segment of the cattle industry are calling for restoration of mandatory country-of-origin labeling (MCOOL), we encourage you to avoid resurrecting controversial and divisive policies like MCOOL that are opposed by a vast majority of U.S. cattle producers,” NCBA wrote.
NCBA recalled the World Trade Organization (WTO) dispute that led to MCOOL being repealed in 2015. “We should not risk triggering another trade war with Canada and Mexico who still have a $1 billion judgment against us,” the group warned, referencing Canada’s ability to take retaliatory action if MCOOL were to be brought back. Besides the WTO ruling, NCBA also noted a 2015 study by USDA “that found the regulatory compliance costs of MCOOL outweighed the benefits to producers and consumers.”
While some proponents of MCOOL “have argued that its repeal led to a sharp decline in cattle prices,” NCBA disputed that claim, highlighting cattle futures data show no discernible correlation between the repeal and long-term trends in prices.
Instead of focusing on “aged policies like MCOOL,” NCBA said a focus should be on voluntary origin and value-added labeling. Additionally, it said the current generically approved “Product of USA” label “does not adequately inform consumers, deliver additional value for our producers, or provide true product differentiation in the marketplace.” Instead, expanding voluntary, industry-led labeling efforts undertaken in concert with USDA can help “ensure that accurate and voluntary origin labels are in place to benefit cattle producers and consumers,” the group maintained.
NCBA also commented on cattle market initiatives and LMR reauthorization. NCBA voiced support for several cattle market initiatives currently being considered by lawmakers, and stressed the importance of reauthorizing Livestock Mandatory Reporting (LMR) currently set to expire Sept. 30. “Timely reauthorization of LMR is imperative,” the group stressed, saying failure to do so risks the “catastrophic and instant loss of market transparency, price discovery, and information designed to improve cattle producers’ negotiating leverage.”
Regarding potential adjustments to LMR, NCBA said it supports the establishment of a formula pricing contract library that protects confidential business information, a measure included in several reform measures including the Price Reform in Cattle Economics (PRICE) Act offered by Rep. Dusty Johnson (R-S.D.). The availability of contract information “may aid cattle producers in capturing more value for their livestock,” the group wrote.
Other policy keys for the NCBA include measures that it says will help expand beef processing capacity, with the group asserting that the recent trend of lower prices paid to cattle producers concurrent with higher meatpacker margins can “largely be attributed” to a lack of adequate beef processing capacity. NCBA said the PRICE Act’s provisions that would provide low-interest, federally guaranteed loans to help small processors expand would help address the situation.
NCBA said it also supports efforts such as Reps. Johnson and Henry Cuellar’s (D-Texas) Direct Interstate Retail Exemption for Certain Transactions (DIRECT) Act, which would ease limits on interstate sales of meat processed in state- (though not federally-) inspected meat processing facilities. The legislation “would empower state-inspected facilities to access new markets without jeopardizing the safety of the product,” NCBA said, and urged Congress “to quickly enact this important bill.”
NCBA lauded passage of the Requiring Assistance to Meat Processors for Upgrading Plants (RAMP UP) Act, which provides funding to help state-inspected meat processors become federally inspected and called on Congress “to continue its oversight of USDA to ensure the RAMP UP Act is implemented without delay.”
On oversight of market participants, NCBA noted its support for recent investigations, including an ongoing probe by the Justice Department. That probe seeks to determine whether market disruptions seen after a 2019 meat processing plant fire in Holcomb, Kansas, and during the Covid-19 pandemic were exacerbated by “anticompetitive or illicit activity occurred following these black swan events,” which the group said was a needed move. While the probe remains ongoing, NCBA said “no details or progress reports have been provided to us in the meantime,” and it voiced support for a letter sent last week by Sen. John Thune (R-S.D.) and Rep. Johnson to Attorney General Merrick Garland “reiterating the need for a thorough investigation and a swift conclusion.” Cattle producers “have been bombarded with adverse market conditions for many years and they deserve to know whether packer activity worsened those hardships,” the group concluded.
A shortage of labor is another factor weighing on the beef sector, according to NCBA. “The beef supply chain cannot function properly without a steady stream of labor,” the group warned, saying generous Covid-19 relief benefits “necessary at the start of the pandemic” are now serving “as a disincentive for some individuals to return to work.” Absent a scale back of those benefits, the group suggested expanding the H-2A foreign guestworker program to permit year-round job positions “is one viable solution.” The ability to secure year-round workers is also a struggle for processing facilities, feed yards, and cow/calf operations, NCBA said, urging “a multi-faceted approach” to address the problem. “This includes allowing appropriate flexibilities to address near-term in-plant shortages, providing additional resources for workforce training and development for highly skilled technical workers, in-plant line operators, meat scientists and veterinarians alike, and other potential regulatory changes to assist our year-round cattle industry overall in closing the gaps in our ongoing labor shortage,” the group concluded.
CORONAVIRUS UPDATE
— Summary: Global cases of Covid-19 are at 172,189,881 with 3,702,667 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 33,326,411 with 596,434 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 297,720,928 doses administered, 136,644,618 have been fully vaccinated, or 41.6% of the entire U.S. population.
— Fauci urges China to release medical records of Wuhan lab workers. Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, or NIAID, told the Financial Times that he has called on China to release the medical records of nine people whose illnesses might provide vital clues into whether Covid-19 first emerged as the result of a lab leak. Fauci said the records could help resolve the debate over the origins of a disease that has killed more than 3.5 million people worldwide. The records in question concern three researchers at the Wuhan Institute of Virology who reportedly became sick in November 2019, and six miners who fell ill after entering a bat cave in 2012. Scientists from the Wuhan Institute of Virology subsequently visited the cave to take samples from the bats. Three of the miners died. Fauci has been accused, especially by conservatives, of playing down the lab leak theory, in part to protect the reputation of NIAID, which helped to fund controversial bat research at Wuhan. David Asher, former head of the state department’s Covid-19 origins investigation, questioned why Fauci was only seeking the medical records now. He pointed out that the Trump administration said publicly in January that US intelligence believed the Wuhan scientists had fallen sick with symptoms of the virus. “I’m stunned that Fauci would now ask this question,” said Asher, who is now at the Hudson Institute, a conservative think-tank.
Fauci dismissed the idea that the NIH might bear any responsibility for the pandemic, telling the FT: “Are you really saying that we are implicated because we gave a multibillion-dollar institution $120,000 a year for bat surveillance?”
— U.S. vaccine plans. U.S. President Joe Biden announced on Thursday a plan to distribute 25 million vaccine doses from the U.S. stockpile to other nations. Biden said 75% of the vaccines would be donated to the COVAX initiative, while the remainder would go to allied and partner countries. The 19 million dose donation would substantially boost COVAX, which has only distributed 76 million doses to date. Nevertheless, U.S. National Security Advisor Jake Sullivan said the U.S. would “retain the say” on where COVAX doses will go, according to the Associated Press, adding: “We’re not seeking to extract concessions, we’re not extorting, we’re not imposing conditions the way that other countries who are providing doses are doing.”
Meanwhile, the European Union is pushing an alternative to the U.S.-backed plan to temporarily waive intellectual-property rights for Covid-19 vaccines. Brussels’ alternative plan would lift export restrictions on vaccines and their raw materials, expand manufacturing capacity around the world, and make it easier for countries to use existing rules to override patents in some cases. EU officials said they would present the proposal at the World Trade Organization next week, when members are also set to debate the waiver.
OTHER ITEMS OF NOTE
— Cotton AWP moves back higher. The Adjusted World Price (AWP) for Upland Cotton rose to 69.78 cents per pound effective today (June 4) after declining the prior two weeks. This marks the third week in a row the AWP has been under 70 cents per pound. Meanwhile, USDA said that Special Import Quota #7 would be established June 10 for 43,009 bales of Upland Cotton, applying to supplies purchased not later than Sept. 7 and entered into the U.S. not later than Dec. 6.
— U.S. finds no evidence of aliens but does not rule out. American intelligence officials have found no evidence that aerial phenomena witnessed by Navy pilots in recent years are alien spacecraft, the N.Y. Times reported (link). But an upcoming government report says “much about the observed phenomena remains difficult to explain, including their acceleration, as well as ability to change direction and submerge… One possible explanation — that the phenomena could be weather balloons or other research balloons — does not hold up in all cases, ... because of changes in wind speed.”