Johnson Has Plan C for CR After Thursday Bill Overwhelmingly Defeated

‘Clean CR’ with debt limit language latest GOP option

•

December 20, 2024 08:19 AM

News/Markets/Policy Updates: Dec. 20, 2024

— Government shutdown looms as latest GOP plan fails; Republicans’ last-minute proposal rejected, leaving Congress in deadlock. The latest Republican effort to avert a government shutdown overwhelmingly failed, 174-235 with one voting present. leaving federal agencies on the brink of closure with just one day remaining until current funding expires.

The House vote on Thursday evening rejected a new stopgap measure proposed by Republican leaders, which aimed to fund the government through March 14 and included provisions for:
· $100.4 billion in disaster relief ($21 billion for ag disasters; of that amount, $2 billion would have been used for assistance to livestock producers and $220 million would have been in block grants to state agriculture departments),
· $10 billion in farmer aid,
· extension of the 2018 Farm Bill (but no funding for orphan programs),
· $2.1 billion for emergency conservation, restoration, and watershed protection activities, and
· a two-year debt ceiling suspension at the insistence of Trump — the measure would have suspended the debt ceiling through Jan. 29, 2027, providing the Treasury Department borrowing authority for about two more years. (Some reports note that Trump’s team initially asked for a five-year extension of the debt limit, so it would not come up again during his presidential term.) Democrats do not want to help Trump avoid a debt ceiling fight next year, which could make it easier for Republicans to pass the hefty tax cut package Democrats oppose.
· a separate $6.4 billion to the U.S. Forest Service for disaster-related expenses and restoration.

The proposal faced hefty opposition from both sides of the aisle. All but two Democrats rejected the bill (Reps. Kathy Castor of Florida and Marie Gluesenkamp Perez of Washington; one voted present, Rep. Marcy Kaptur of Ohio). Democrats criticized the removal of key provisions from the original bipartisan deal. Some 38 Republicans (mostly fiscal hardliners) rejected Trump and GOP House leadership. The bill required a two-thirds majority to pass under suspended rules, which it failed to achieve. Republicans didn’t even get a majority vote.

The new defeated legislation came in at 116 pages, down from the 1,547 pages in the original bill.

Blame game. Republicans attempted to shift blame to Democrats for a potential shutdown, but Democrats insisted on adhering to the previous bipartisan agreement.

House Speaker Mike Johnson (R-La.) says “we’ve got a plan,” and votes are expected this morning, an NBC News reporter posts on X. Members are convening at 10 a.m. ET to discuss a possible temporary fix to fund the government and avert a shutdown, Fox News reports, citing people familiar with the negotiations. The CR being discussed would be the third package for consideration and is reported to be a clean stopgap measure, according to Fox News. It does not include a debt ceiling provision, Fox News says. Our sources say it will or should likely include disaster aid and likely the $10 billion in farmer aid, and perhaps an extension of the 2018 Farm Bill as those provisions would garner more Democrat and Republican votes.

Majority Leader Steve Scalise (R-La.) said Republicans won’t try their luck with the House Rules Committee on a party-line vote. “What exactly is in or out hasn’t been decided, but you start with keeping the government open,” Scalise said. Johnson (R-La.) needs Democratic votes to advance legislation — and Republican votes to remain speaker. Sen. Lindsey Graham (R-S.C.) said the reality is that Republicans will need Democratic votes, both in the Senate, which has a 60-vote threshold to advance most legislation, and in the House where Republicans hold a very narrow majority. Senate Majority Leader Chuck Schumer (D-N.Y.) said the House needs to embrace its original failed deal. That is unlikely. Senators insist they can’t be blindsided. “They need to be talking to the Senate, too,” said Sen. Joni Ernst (R-Iowa), a member of leadership. Punchbowl News reported that JD Vance and Russ Vought, who is Donald Trump’s pick to lead the Office of Management and Budget, are meeting with the House Freedom Caucus this morning in Johnson’s office to attempt to resolve the funding impasse.

“It’s a taste of things to come,” former House member and newly elected Sen. Adam Schiff (D-Calif.) said after the first deal blew up. “The House is going to be ungovernable.”

Trump’s latest comments: “Congress must get rid of, or extend out to, perhaps, 2029, the ridiculous Debt Ceiling,” Trump said in a Truth Social post. “Without this, we should never make a deal.”

This captures how it is to deal with House Republicans (like herding feral cats):

— Unconventional power and political disarray: Musk’s influence and GOP leadership challenges. There is growing concerns about unconventional power dynamics and the influence of unelected individuals, particularly Elon Musk, in U.S. politics. Rep. Jamie Raskin’s (D-Md/) statement underscores the confusion and frustration within the Democratic Party about who wields actual power in the Republican Party. His reference to Speaker Mike Johnson, Donald Trump, and Elon Musk suggests a perception of divided or competing influences within GOP leadership. Rep. Rosa DeLauro (D-Ct.) called Musk “President Musk,” reflecting fears about the outsized role Musk plays in shaping political discourse and policy decisions, despite lacking an official political role. His influence is seen as bypassing traditional checks and balances. Musk’s combative style and threat of leveraging his wealth and influence to challenge dissenting Republican lawmakers in primaries highlight tensions within the GOP. His involvement in legislative negotiations is seen as destabilizing, risking fractures within the party. Meanwhile, speculation about Speaker Johnson’s precarious tenure points to deeper instability in Republican leadership. If Johnson’s authority is undermined by figures like Trump or Musk, it could exacerbate internal divisions and legislative gridlock.

— From Lance Honig at USDA’s NASS: “What impact a shutdown would have on our January reports:For all of our end-of-season crop and Dec stocks data, we are finished collecting the data, so the only issue would be with timing. In other words, we have all of the data we need to work with, just need time to analyze & compile it. So if there were a shutdown, it would just depend on how long it was in determining when the reports could be published (if any delay were necessary). So not a question of if we could publish, just maybe when.

“Hogs & Pigs is scheduled to publish on Monday, so again just a timing issue. The one I would be watching more closely is the January Cattle report. We will collect that data in January, so IF we were shut down then, it gets a little more complicated. Not saying we couldn’t do it — just that the overall timeline/process would have to be re-worked.”

— Implications of a government shutdown on USDA. There is a contingency plan (link) that would retain a small number of administrative employees to oversee activities including disaster response and cybersecurity should funding lapse.

Meanwhile, one holiday-sensitive area tat risk of being disrupted: air travel. Federal workers being temporarily out of work means Americans could face slowdowns due to understaffed airport security. Last time around, flights were delayed or rerouted due to limited transportation staffing.

Economists began detailing the fallout of a potential shutdown. GDP growth would fall by 0.15 percentage points “for each week it lasted,” Alec Phillips, an economist for Goldman Sachs, wrote this week in a client note. The disruption shouldn’t hinder the federal government’s ability to borrow in the near term, he added.

— Friendly receptions for Trump Cabinet picks at USDA, HHS. President-elect Donald Trump’s cabinet nominees Brooke Rollins and Robert F. Kennedy Jr. are making progress with key Senate members as they prepare for confirmation hearings.

Rollins, tapped to lead USDA, has been meeting with Republican and agriculture-focused Democratic senators. Rollins engaged with Sens. Peter Welch (Vt.), Amy Klobuchar (Minn.), Michael Bennet (Colo.), and Raphael Warnock (Ga.). Welch described her as “knowledgeable and impressive” but stopped short of committing to her confirmation.

Kennedy, nominated for the Health and Human Services Department, also began meeting with senators this week. Conservative lawmakers like Sen. Markwayne Mullin (R-Okla.) voiced support, with Mullin defending Kennedy’s critique of agricultural practices and calling for a shift to natural fertilizers over chemicals. Kennedy’s proposals to restrict food dyes, reduce pesticide use, and increase federal oversight of processed foods have drawn scrutiny, particularly from lawmakers in farm-heavy states. Sen. Chuck Grassley (R-Iowa) expressed concerns about his stance on genetically modified corn, while Sen. John Fetterman (D-Pa.) awaits a meeting before deciding his vote.

— Pete Hegseth’s confirmation hearing is scheduled for Jan. 14.

— President Biden’s aides went to great lengths to prevent him from “making gaffes or missteps that could damage his image, create political headaches or upset the world order.” That includes limiting who spoke to him and what they said, including some Cabinet secretaries, the Wall Street Journal reported (link).

MARKET FOCUS

— Equities today: Asian and European stock indexes were mostly lower overnight. U.S. stock indexes are pointed toward solidly lower openings. U.S. markets are down sharply this morning on growing worries that a U.S. government shutdown could become reality, adding to investor jitters over high interest rates and the return of inflation. In Asia, Japan -0.3%. Hong Kong -0.2%. China -0.1%. India -1.5%.In Europe, at midday, London -0.9%. Paris -1.2%. Frankfurt -1.6%.

Today is the quarterly “triple-witching” expirations that will see $6.5 trillion worth of options on individual stocks, stock indexes and exchange-traded funds expire. Today’s expirations are this year’s largest and among the big

U.S. equities yesterday: All three major indices finished well off their highs with the Dow just avoiding a lower finish in a late decline while the S&P 500 and Nasdaq both ended weaker. The Dow was up 15.37 points, 0.04%, at 42,342.24. The Nasdaq declined 19.92 points, 0.10%, at 19,372.77. The S&P 500 lost 5.08 points, 0.09%, at 5,867.08.

— Amazon strike targets holiday season demands. Amazon workers across seven facilities in New York, Georgia, California, and Illinois went on strike Thursday to push the company toward negotiations ahead of the holiday shopping season. Organized by the Teamsters, the strike — the largest against Amazon in U.S. history — seeks better benefits, higher wages, and improved safety conditions. While Amazon claims the protesters are “almost entirely outsiders,” the Teamsters report nearly 10,000 Amazon workers have joined their ranks, representing under 1% of Amazon’s workforce as of Dec. 31, 2023.

— FedEx to spin off freight business. FedEx Corporation has announced its decision to spin off its freight trucking division, FedEx Freight, into a separate publicly traded company within the next 18 months. This strategic move aims to enhance operational focus and streamline the company’s core delivery business, allowing both entities to better respond to their respective market dynamics. CEO Raj Subramaniam emphasized that this separation will unlock significant value for shareholders and enable more tailored investment strategies for each business segment. The decision comes amid a challenging economic environment for FedEx, as the company reported a slight decline in second-quarter revenue to $22 billion, down from $22.2 billion the previous year. Adjusted earnings per share were reported at $4.05, slightly higher than analyst expectations but reflecting ongoing pressures in the delivery sector due to reduced demand and changing consumer preferences. The spinoff is seen as a response to the unique dynamics of the less-than-truckload (LTL) market, where FedEx Freight holds a leading position with nearly $10 billion in annual revenue. The separation will allow both companies to pursue distinct growth strategies while maintaining operational synergies in areas such as technology and customer service. Subramaniam noted that this decision is part of a broader effort to transform FedEx’s operations and improve profitability amidst ongoing challenges in the logistics sector, including a prolonged period of weak demand in the U.S. industrial market.

— Ag markets today: Corn and soybeans extended Thursday’s corrective gains during the overnight session, while wheat bounced from recent losses. As of 7:30 a.m. ET, corn futures were trading 2 to 3 cents higher, soybeans were 6 to 8 cents higher, winter wheat markets were 1 to 2 cents higher and spring wheat was mostly 5 to 7 cents higher. The U.S. dollar index was more than 300 points lower, and front-month crude oil futures are down around 65 cents.

Cattle futures posted sharp losses again on Thursday and look toppy on the daily charts. Cash cattle traded steady to $2.00 higher so far this week, despite the sharp break in futures. Those markets are unlikely to diverge for long, so either futures will pull cash lower or the strong cash market will cause traders to buy the break.

The case for a seasonal bottom in the cash hog market is building with the CME lean hog index up another nickel to $84.21 as of Dec. 18. That’s the fifth gain in the last seven days, though the net advance during that span is only 89 cents.

— Agriculture markets yesterday:
• Corn: March corn rose 3 1/2 cents to $4.40 3/4, closing near the session high and above the 20-day moving average.
• Soy complex: January soybean futures climbed 11 1/4 cents to $9.63 and settled nearer session highs. January meal futures surged $4.60 to $284.10, near session highs. January bean oil rallied 46 points to 40.01 cents.
• Wheat: March SRW wheat fell 8 1/4 cents to $5.33, nearer the daily low and hit a contract low. March HRW wheat fell 5 1/2 cents to $5.43 1/4 and nearer the session low.
• Cotton: March cotton futures fell 17 points to 67.91 cents.
• Cattle: February live cattle fell $1.775 to $186.55 Thursday, near the session low and hit a two-week low. January feeder cattle fell $2.525 to $254.475, nearer the session low and hit a nearly four-week low.
• Hogs: Hog futures slipped lower, with nearby February futures skidding 7.5 cents to $83.625 at the close.

— PCE prices rise less than expected. The PCE Price Index monthly change in the United States slowed to 0.10% in November 2024, down from 0.20% in October. This represents a significant deceleration in price growth and came in below economists’ expectations of a 0.2% increase. Historically, the index has averaged 0.27% from 1959 to 2024, with a peak of 1.20% in February 1974 and a low of -1.20% in November 2008. The Fed closely watches the PCE index, particularly the core PCE (excluding food and energy). This moderation in price growth may provide the central bank with more flexibility in its monetary policy decisions. The deceleration suggests that inflationary pressures may be easing, which could be positive news for consumers and the broader economy. While slower price growth is generally positive, too low inflation can be a sign of weak demand. The Fed will likely analyze this data in the context of other economic indicators.

Market perspectives:

— Outside markets: The U.S. dollar index was weaker, with the euro and British pound both firmer against the greenback. The yield on the 10-year U.S. Treasury note eased to 4.54% with a mostly lower tone in global government bond yields. Crude oil futures were lower, with U.S. crude around $69.05 per barrel and Brent around $72.55 per barrel. Gold and silver were mixed, with gold higher around $2,618 per troy ounce and silver weaker around $29.30 per troy ounce.

— EU/China trade developments shake soybean market. The EU is considering an 85% tariff on lysine imports from China as part of an anti-dumping investigation. This essential amino acid for animal feed may see price hikes, pushing feed manufacturers to substitute with soybean meal to meet protein requirements. Higher lysine costs could drive European demand for soybean meal, supporting price increases in the meal market. China reportedly has purchased 500,000 tons of U.S. soybeans amid lysine market disruptions, signaling sustained demand and strategic protein source management. Soybean prices have rallied, reflecting heightened demand expectations and shifting feed market dynamics. These developments highlight escalating EU/China trade tensions, influencing global agricultural trade and market movements.

— Ag trade groups push for action on port labor dispute. The National Grain and Feed Association (NGFA) and other agricultural trade groups have urged President Biden and President-elect Trump to address ongoing labor disputes at East and Gulf Coast ports. In letters sent on Dec. 19, they emphasized the critical need for a new agreement between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance before the current contract expires on Jan. 15, 2025. Citing the disruption caused by a brief strike in October, the groups warned that prolonged port shutdowns could jeopardize $1.4 billion in weekly agricultural trade and erode U.S. competitiveness in global markets. With 40% of U.S. agricultural exports reliant on these ports, they called for swift action to protect supply chains, farmers, and the broader economy.

— Winter lock closures on the Upper Mississippi River. The U.S. Army Corps of Engineers (USACE) St. Louis District announced winter closures for key locks:

Lock 25: Fully closed from January 1 to March 2, 2025, for downstream sill beam installation and guidewall concrete repairs.
Melvin Price Main Lock: Closed from January 1 to April 1, 2025, for Phase III upstream liftgate replacement.
Lock 27 Main Lock: Closed during the same period for repairs and replacement of embedded metals.

Secondary locks at Melvin Price and Lock 27 will remain operational, but Lock 25 will be entirely inaccessible.

These closures impact grain shipments, with the following averages for the period:

Melvin Price Lock: 3.5 million tons (21% of yearly total).
Lock 27: 3.6 million tons (20% of yearly total).
Lock 25: 461,000 tons (5% of yearly total) due to reduced winter navigation.

— New CPKC bridge enhances Laredo border crossing capacity. Canadian Pacific Kansas City (CPKC) has completed a new international railway bridge connecting Laredo, TX, and Nuevo Laredo, Mexico. Announced on Dec. 17, the bridge addresses a critical bottleneck at North America’s busiest rail crossing, which handles significant U.S. grain exports to Mexico. Previously limited to alternating four-hour windows for northbound and southbound traffic on a single bridge, the new infrastructure allows simultaneous bidirectional movement, doubling freight capacity. With Ferromex facing capacity challenges at other border crossings, the expanded Laredo capacity positions CPKC to accommodate additional traffic effectively.

— Dec. 1 feedlot inventory expected to be slightly below year-ago. Analysts expect USDA’s Cattle on Feed Report this afternoon to show the large feedlot (1,000-plus head) inventory down 0.3% from year-ago at 11.975 million head as of Dec. 1. The report is expected to show a 5.1% decrease in the number of cattle moved into feedlots last month, while marketings are anticipated to be down 1.8% from November 2023. Of note: The U.S. ban on Mexican cattle imports went into effect on Nov. 22, so this month’s report won’t fully reflect those restrictions. Next month’s report, featuring activity during December, will reflect the restrictions.

— USDA daily export sale:
· 150,000 MT of corn to Colombia for 2024-25

— Ag trade update: South Korea purchased 67,000 MT of corn that can be sourced from the U.S., South America or South Africa but passed on another tender to buy up to 69,000 MT of corn.

— NWS outlook: Snow will fall over parts of the Great Lakes, Central Appalachians, and
Northeast... ...Record warmth possible across the West Friday and Saturday.

Items in Pro Farmer’s First Thing Today include:
· Grains firmer overnight
· Cattle futures, cash market headed in opposite directions
· Cash hog index continues to inch higher
· China leaves interest rates unchanged

RUSSIA/UKRAINE

— Russia’s wheat export quota lower than originally announced. Russia set its wheat export quota for the second half of 2024-25 at 10.6 MMT, the government said. That’s down from the 11 MMT quota announced last month by the Eurasian Economic Union, a trade association of Russia and other four ex-Soviet countries. The quota from Feb. 15 to June 30 is down 63.4% from 29 MMT last year.

CHINA UPDATE

— Beijing sets 2025 rural agenda at Central Rural Work Conference (CRWC). Leading policymakers convened at the annual CRWC)in Beijing this week to chart the course for China’s agricultural and rural development policies in 2025. The conference underscored the rural economy’s pivotal role in stabilizing employment and ensuring national stability, security, and growth. In written remarks, Xi Jinping urged officials to prioritize rural issues, stating that record-high grain output and rising rural incomes are “foundational support for high-quality economic and social development.” Echoing this, the People’s Daily described rural development as a “ballast stone” for public confidence and national stability. A striking Farmer’s Daily editorial drew parallels between rural policy and strategic preparedness, citing The Art of War and Xi’s 2022 guidance to “respond to uncertainty in the external environment with the certainty of stable domestic production and supply.” Rural policy is integral to boosting employment, improving incomes for low- and middle-income groups, and driving domestic consumption. Delivering on these priorities is also critical to mitigating risks from potential trade or geopolitical conflicts, particularly with the U.S. Stay tuned as further details from the CRWC inform the Party’s 2025 No. 1 Document, which will outline its annual agricultural and rural policy objectives.

— China’s state stockpiler buys U.S. soybeans for winter, spring delivery. China’s Sinograin has bought nearly 500,000 MT of U.S. soybeans this week for shipment in March and April, paying more for U.S. supplies for state reserves rather than buying cheaper Brazilian beans, two U.S. traders familiar with the deals told Reuters. Sinograin’s purchases this week follow deals China booked last week for around 750,000 MT for shipment from January to March. Sinograin prefers U.S. beans when it is buying for storage because they are less prone to spoilage than those from Brazil, traders said. The purchases came as soybeans fell to near four-year lows and ahead of potential tariffs when President-elect Donald Trump takes office.

— COFCO inks climate-linked loan. Crop merchant COFCO International on Friday announced a $600 million revolving credit facility with OCBC bank involving emissions reductions targets for soy and corn purchases. COFCO International, the overseas trading arm of Chinese food group COFCO Corp., will be eligible for interest discounts if it achieves the targets, which it aims to do mainly through steps to eliminate deforestation and land conversion from its soy and corn supply chains.

— China’s soybean imports from U.S. jump in November but Brazil remains leading source. Of the 7.15 MMT of soybeans China imported last month, 2.79 MMT came from the U.S., up 21.8% from last year. November arrivals from Brazil declined from year-ago, though it was still the leading source at 3.94 MMT. For the first 11 months of 2024, China imported 97.09 MMT of soybeans, with 71.7 MMT from Brazil (up 10%) and 17.88 MMT from the U.S. (down 9%).

TRADE POLICY

— USDA expands agricultural export market with $300 million in new RAPP grants. USDA announced $300 million in additional funding through the Regional Agricultural Promotion Program (RAPP) to diversify U.S. agricultural exports. This brings total 2024 RAPP funding to $600 million. The grants will target emerging markets in Africa, Latin America, and South/Southeast Asia, fostering opportunities for American producers in regions with growing demand. USDA said it aims to reduce dependency on major markets like China and Canada while addressing global food insecurity through complementary programs. Proposals for the latest funding round exceeded $1 billion, highlighting strong interest in expanding market opportunities.

— Mexico expands tariffs to shield domestic textile industry. In a move to bolster Mexico’s struggling textile sector, Economy Minister Marcelo Ebrard announced a temporary 35% tariff on 138 additional finished textile products. These tariffs, targeted mainly at inexpensive Chinese imports, aim to protect the national industry, which employs 400,000 people but has lost 79,000 jobs in recent years. An additional 15% tariff on certain unfinished textile goods was also introduced. The measures, signed by President Claudia Sheinbaum, will remain effective until April 2026. Authorities hope to curb “technical contraband” and promote domestic production while reducing reliance on imports. The initiative aligns with Mexico’s broader goals of fostering job creation and supporting its national industries.

— Trump’s tariff threats loom over Europe. President-elect Donald J. Trump’s renewed threats of tariffs on European goods have unsettled leaders and businesses across the continent, raising fears of a potential trans-Atlantic trade war. With political instability in key EU countries and no unified strategy to counter these moves, Europe faces a precarious challenge. The European Commission said it was ready to discuss strengthening the EU/U.S. relationship and that the bloc is “committed to phasing out energy imports from Russia and diversifying our sources of supply,” a European Commission spokesperson said.

Trump has warned of “TARIFFS all the way” unless Europe significantly increases imports of U.S. oil and gas. The European Union is exploring options ranging from retaliatory tariffs to negotiated concessions, but divisions among member states and bureaucratic inertia complicate the process. Meanwhile, businesses brace for potential disruptions, with industries such as energy, aviation, and wine production particularly vulnerable.

The U.S. goods and services trade deficit with the EU totaled $131.3 billion in 2022, according to the office of the U.S. Trade Representative. And hydrocarbons have been its big export success story of recent years. Eurostat data indicate the EU purchased 47% of its liquefied natural gas (LNG) needs and 17% of its oil imports from the U.S. in the first quarter of 2024.

The countries of the EU have already boosted their imports of U.S. oil and gas dramatically. Purchases in the first nine months of 2024 were more than five times as high as during the initial nine months of Trump’s first presidency.

Facts and figures. According to Bloomberg, based on current oil prices, the region would have to purchase an additional 5.3 million barrels a day of American crude to fill the trade deficit. That’s impossibly large, almost the combined oil use of Germany, France, Spain and Italy — the bloc’s four biggest consumers. On a more immediate, practical level, Bloomberg adds that the U.S. can only sell more oil and gas to Europe by diverting it from elsewhere, reducing one trade deficit by swelling another.

LIVESTOCK, NUTRITION & FOOD INDUSTRY

— Michigan to go cage-free with eggs by year’s end. Starting Dec. 31, Michigan will require all eggs sold in stores to come from cage-free chickens, marking a significant shift in the state’s egg industry. While the law aims to improve animal welfare, experts warn of potential price increases, adding to existing inflation and bird flu challenges.

The 2019 “cage-free” egg law mandates retailers sell only cage-free eggs. Small farms with under 3,000 hens are exempt. Cage-free systems incur higher production costs, passed on to consumers. Recent data shows cage-free eggs are 45 cents more expensive on average. The five-year phase-in period has allowed farmers to prepare for the transition, potentially mitigating drastic price hikes.

Michigan joins some other states with similar laws. Producers, like Herbruck’s Poultry Ranch, have transitioned early, citing consumer demand. Restaurants are bracing for higher costs, and price-sensitive households may reduce egg purchases. Business owners selling shell eggs must ensure compliance with the new requirements.

The following states have enacted or are in the process of implementing cage-free egg legislation:

California: Implemented in 2022, requiring all eggs sold in the state to be from cage-free hens.
Massachusetts: Also implemented in 2022, mandating cage-free conditions for egg-laying hens.
Nevada: Law went into effect in 2024, requiring cage-free environments for egg-laying hens.
Oregon: Implemented cage-free egg requirements in 2024.
Washington: Enacted cage-free egg laws in 2023.
Colorado: Required cage-free conditions for egg-laying hens by 2023.
Utah: Set to implement cage-free housing requirements by 2025.
Rhode Island: Mandates cage-free environments for egg-laying hens by 2026
Arizona: Will implement cage-free egg requirements in 2025.

— “Covid for Cows": Avian Flu devastates California’s dairy industry. California’s dairy sector, the nation’s largest milk producer, faces a severe crisis as the H5N1 avian flu spreads rapidly, infecting herds despite farmers’ precautions. Dubbed “Covid for cows,” the outbreak has led Governor Gavin Newsom to declare a state of emergency. With 645 dairies affected, milk production is down, and farmworkers remain at risk. Scientists are racing to contain the virus, which spreads via contaminated milk and equipment. The outbreak has also disrupted egg supplies, leaving shelves bare during the holiday season. The long-term impact on the dairy and poultry industries remains uncertain.

— FDA redefines “healthy” food label: Stricter standards for added sugars and fats. The FDA has introduced a new definition for “healthy” food, removing the label from items like sugary yogurts, cereals, and fruit cups. Foods such as salmon, avocados, and olive oil now qualify, while those with excessive added sugars or fats face stricter limits. The updated guidelines, designed to curb chronic disease and set to take effect in 2028, come as President-elect Trump prepares to install Robert F. Kennedy Jr. as head of HHS. Kennedy has vowed to reform food labeling and tackle unhealthy additives in processed foods.

OTHER ITEMS OF NOTE

— Cotton AWP moves lower. The Adjusted World Price (AWP) for cotton moved down to 55.09 cents per pound, effective today (Dec. 20), down from 56.22 cents per pound the prior week. While the lowest since July, this still leaves the AWP more than 3 cents per pound above the level that would trigger an LDP under the farm program. Meanwhile, USDA announced Special Import Quota #10 will be established Dec. 26 for the import of 31,716 bales of upland cotton, applying to supplies purchased no later than March 25 and imported into the no later than June 23.

KEY LINKS