Kerry Hits U.S. Ag Sector Re: Climate Change and Gets Negative Backlash

Virus that’s ravaged poultry flocks in U.S.& Europe hits Brazil, world’s largest chicken exporter

The U.S. is already paying a price via “substantially” higher borrowing costs for its failure to raise the federal debt limit, Treasury Secretary Janet Yellen warned, as talks between the White House and lawmakers from both parties continue at the White House today. Hours after House Speaker Kevin McCarthy (R-Calif.) said, “We are nowhere near reaching a conclusion” in the talks, Yellen sent a letter warning the Treasury could run out of cash as soon as June 1.

Yellen will meet to discuss debt ceiling negotiations with the Bank Policy Institute board, which includes CEOs of major U.S. banks, on Thursday. Bank CEOs will also hold meetings with regulators and Biden administration officials in Washington.

Treasury Deputy Secretary Wally Adeyemo Monday urged Congress to lift the nation’s debt limit to avoid a default while also rejecting calls to mint a $1 trillion platinum coin to ease the crisis.

The Senate plans two hearings today on the debt-limit — Finance plans to look at efforts to repeal supplemental funding for the IRS in last year’s tax and climate law. Small Business and Entrepreneurship set a hearing on how a default would affect small businesses.

Meanwhile, the House Financial Services panel hears from the banks’ regulators today, including Fed Reserve Vice Chair for Supervision Michael Barr, FDIC Chair Martin Gruenberg, and Office of the Comptroller of the Currency acting head Michael Hsu. Barr is calling for more oversight of bank executives’ compensation. Senior executives at SVB weren’t properly encouraged to manage the firm’s risk, Barr said in remarks prepared for the hearing.

Fed Presidents Raphael Bostic of Atlanta, John Williams of New York and Austan Goolsbee of Chicago are slated to speak today.

China’s economic data undershot economists’ expectations in April, as the world’s second-largest economy continued to show a patchy post-covid recovery. Industrial output rose by 5.6% compared with a year earlier while retail sales rose by 18.4% — both well below forecasts of 10.9% and 21%. The data also showed a further decline in property investment.

Ukrainian officials said they had shot down all 18 Russian missiles fired in a strike on the capital early Tuesday morning, including six ballistic Kinzhal missiles. Several drones were also downed, according to the general staff. Until recently, Ukrainian officials said they had no way to take down the Kinzhals, which can fly at more than five times the speed of sound. U.S.-made Patriot air-defense systems received in April have changed that.

USDA’s Foreign Agricultural Service (FAS) released a dashboard that demonstrates the scope of Black Sea grain and oilseed trade. Millions of tons of grain are shipped through these international waters each year, making the Black Sea region a major supplier of agricultural commodities worldwide. The dashboard is complementary to the Russia Grain and Oilseed Exports Expand trade report published last week by FAS. As the Black Sea Grain Initiative is renegotiated, this report and dashboard provide an in-depth data-based analysis of trade from the region. See Russia/Ukraine section for link and details.

The virus that’s ravaged poultry flocks in the U.S. and Europe has just hit Brazil, the world’s largest chicken exporter, for the first time. Avian influenza was detected in wild birds on the coast of Espirito Santo state, according to the Agriculture Ministry.

According to the Federal Reserve Bank of New York, total U.S. household debt rose by 0.9% to $17.05 trillion, with balances standing $2.9 trillion higher than at the end of 2019 (before the pandemic recession).

Representatives from Iowa, Illinois, Texas and Oklahoma are introducing a bill that would allow corn-based ethanol to qualify as an “advanced biofuel” — a bid to boost the gasoline additive’s green credentials.

The Department of Energy will purchase 3 million barrels of crude oil for the Strategic Petroleum Reserve, as the Biden administration aims to refill the stockpile following the sale of 180 million barrels — the largest sale ever — last year that worked to stabilize oil markets following Russia’s invasion of Ukraine. Last year’s sale left the SPR at its lowest level since 1983.

John Kerry, Special Presidential Envoy for Climate, got a lot of negative feedback following his comments last week about the ag sector and climate change. More in Energy section.

Roughly $11 billion in grants and loans from the climate-and-tax law will go to clean energy in rural communities. The available funds will be the most spending on rural electrification since 1936. Grants and loan opportunities will be targeted toward energy projects that roll out low-cost, renewable power to rural communities, USDA Secretary Tom Vilsack said on a call with reporters. The money is part of a broader Biden administration effort to ensure rural America is a “full participant in the clean energy economy,” Vilsack added.

Special counsel John Durham issued a long-awaited report that sharply criticizes the FBI for investigating the 2016 Trump campaign based on “raw, unanalyzed, and uncorroborated intelligence.”

Equities today: Asian stock markets were mixed overnight and European shares were mixed but mostly lower. U.S. Dow opened around 120 points lower. In Asia, Japan +0.7%. Hong Kong flat. China -0.6%. India -0.7%. In Europe, at midday, London +0.1%. Paris flat. Frankfurt +0.1%.

U.S. equities yesterday: The Dow finished up 47.98 points, 0.14%, at 33,348.60. The Nasdaq gained 80.47 points, 0.66%, at 12,365.21. The S&P 500 rose 12.20 points, 0.30%, at 4,136.28.

Home Depot reports disappointing sales. While the bottom line barely beat Wall Street’s expectations, revenue came up short. In fact, it was the home improvement retailer’s second consecutive revenue miss after previously posting 12 consecutive beats. Home Depot also lowered its same-store sales estimate for the year to a decline of 2% to 5%. Before, it had expected the metric to stay effectively flat. Target reports Wednesday, Walmart posts its results Thursday, and Home Depot rival Lowe’s is up a week from now.

Global fund managers are now the most pessimistic they’ve been all year, flocking to cash amid concerns that a recession is looming, according to Bank of America’s latest survey. 65% of survey participants now expect a weaker economy, the poll showed, though around two thirds see a soft landing and only a small contraction in earnings. Cash levels rose to 5.6% in May, exposure to equities also climbed to the highest this year, and bond allocations are now the biggest since 2009.

The European Union’s antitrust watchdog approved Microsoft’s planned $75 billion acquisition of Activision Blizzard, giving the two companies a win after the deal hit a regulatory roadblock in the U.K. — U.K. regulators rejected the deal last month and yesterday criticized the fixes accepted by its EU counterpart. And in the U.S., the FTC has sued to block it.

Agriculture markets yesterday:

• Corn: July corn rose 6 1/4 cents to $5.92 1/2 and ended the session above the 10-day moving average.
• Soy complex: July soybeans rallied 10 3/4 cents to settle at $14.00 3/4. July meal fell $2.00 to $430.90 after trading at the highest level since April 24. July soyoil rose 17 points to 46.69 cents.
• Wheat: July SRW wheat gained 25 3/4 cents at $6.60 3/4 and nearer the session high. July HRW wheat rose 21 1/4 cents to $8.98 1/4. Prices closed nearer the session high and hit a nearly six-month high. Spring wheat futures rose 27 1/4 cents to $8.73 1/4.
• Cotton: July cotton rose 184 points to 82.37 cents, finishing the session above the 10-, 20- and 40-day moving averages.
• Cattle: June live cattle fell 7 1/2 cents to $164.325. August feeder cattle jumped $2.075 to $231.05.
• Hogs: June lean hogs rallied $2.05 to settle at $86.15, the highest settlement since May 4.
  

Ag markets today: Corn, soybean and winter wheat futures pulled back from Monday’s gains during overnight trade. As of 7:30 a.m. ET, corn futures were trading 1 to 4 cents lower, soybeans were 6 to 8 cents lower and winter wheat futures were3 to 6 cents lower, while spring wheat was steady to fractionally higher. Front-month crude oil futures were modestly weaker, and the U.S. dollar index was around 150 points lower.

Market quotes of note:

• Former Silicon Valley Bank Chief Executive Greg Becker plans to tell a Senate committee Tuesday that no bank could have survived the unprecedented deposit run that led to his institution’s failure in March. Becker said the fastest pace of rate hikes by the Federal Reserve in decades combined with negative social media sentiment contributed to the failure of SVB.
  

• The New York Fed released its Q1 report on household debt: Findings include a record-high debt level of $17 trillion, persistent credit card debt, and rising delinquency rates. A typical first quarter sees credit card balances decline as people pay off what they spent over the holidays. But, for the first time since the New York Fed started tracking this 20 years ago, that isn’t the case, according to Bankrate’s senior industry analyst Ted Rossman. Instead, balances remained flat over Q1. Delinquency is rising, which is when a debt is 90+ days past due. The Fed’s report showed that 4.57% of credit card debt transitioned to serious delinquency last quarter, up from 3.04% in Q1 of 2022. And for credit card holders aged 18–29, 8.3% of balances were in serious delinquency. Bottom line: With interest rates at a near 16-year high, this could put more pressure on indebted consumers to pull back on spending, potentially increasing the likelihood of a recession.

  
  

• CEO of OpenAI Sam Altman has been frank about the potential dangers of artificial intelligence (AI). “It’d be crazy not to be a little bit afraid, and I empathize with people who are a lot afraid,” he said in March. “The current worries that I have are that there are going to be disinformation problems or economic shocks, or something else at a level far beyond anything we’re prepared for.” He’s expected to say in his testimony today that “the regulation of AI is essential.”
  
• Securities and Exchange Commission Chair Gary Gensler said that the agency is not considering a temporary ban on short selling of stocks in troubled regional banks, a statement that follows comments last week by JPMorgan Chase & Co. CEO Jamie Dimon suggesting that regulators should prosecute “unscrupulous” market participants who pair market manipulation with short selling of bank stocks. Gensler told attendees at an Atlanta Federal Reserve conference that historically, such bans have been ineffective at preventing panic selling and may actually create more fear in the market because bans signal that the sector “is not confident in fair, orderly and efficient markets.”

On tap today:

• U.S. retail sales for April are expected to increase 0.8% from the prior month. (8:30 a.m. ET) UPDATE: Retail sales in the U.S. increased 0.4% in April, partially recovering from two consecutive months of declines but falling short of market expectations for a 0.8% increase. While sales at motor vehicle and parts dealers increased by 0.4%, there was an unexpected decline of 0.8% in receipts at gasoline stations, despite the higher fuel prices.
• U.S. industrial production for April is expected to rise 0.1% from the prior month. (9:15 a.m. ET)
• U.S. business inventories for March are expected to be unchanged from the prior month. (10 a.m. ET)
• National Association of Home Builders housing market index is expected to tick up to 46 in May from 45 one month earlier. (10 a.m. ET)
• Federal Reserve speakers: Cleveland’s Loretta Mester on the economy and monetary policy at 8:15 a.m. ET, Vice Chairman Michael Barr before the House Financial Services Committee at 10 a.m. ET, New York’s John Williams on the economic outlook at 12:15 p.m. ET, and Dallas’s Lorie Logan (3:15 p.m. ET), Atlanta’s Raphael Bostic and Chicago’s Austan Goolsbee (7 p.m. ET) at an Atlanta Fed financial markets conference.
• Japan’s first-quarter gross domestic product report is due out at 7:50 p.m. ET.

Busiest Memorial Day since 2005 for air travel to boost fuel use. Air travel in the U.S. over the Memorial Day holiday weekend is forecast to rise to the highest since 2005, driving hopes that strong fuel consumption will counter a bleak economic outlook.

Farms consolidating globally. A new study projects that the number of farms globally will shrink in half as the size of existing farms doubles by the end of the 21st century. Link for details.

Market perspectives:

• Outside markets: The U.S. dollar index was slightly weaker. The yield on the 10-year U.S. Treasury note was lower, around 3.48%, with a lower tone in global government bond yields. Crude oil futures were slightly weaker, with U.S. crude around $71.05 per barrel and Brent around $75.11 per barrel. Gold and silver were under pressure, with gold around $2,010 per troy ounce and silver around $23.97 per troy ounce.

• The International Energy Agency has raised its 2023 global crude oil demand by 100,000 barrels per day, to 102 million barrels per day. But, it cut the absolute amount of oil China expects it to consume this year.

• Copper prices have slumped to a four-month low, reflecting softening demand from China, the resolution of supply disruptions, and traders betting against the red metal.

• The embattled London Metal Exchange is still trying to rebuild faith in its nickel contract after an epic short squeeze last year, according to Chief Executive Officer Matthew Chamberlain. Nickel remains the worst-performing contract on the LME so far this year. Link to more via Bloomberg.

• Americans are driving more so far this year than any other year on record, except for 2019. The rise reflects not just the return to offices for millions of Americans but also a steady decline in fuel prices since last year. It also means more ethanol consumption.

• Developing nations with fossil-fuel riches say they can’t just leapfrog to renewables as they lack capital and rely on cheap power and oil revenues. The US and Europe have no easy response, the New York Times reports (link).

• India cuts import prices for palm oil, soyoil. India has lowered the base import prices for crude palm oil, RBD palm oil, TBD palm olein, and crude soyoil. The country adjusts the prices every two weeks, using the prices to calculate the tax importers need to pay.

• Ag trade: Japan is seeking 113,555 MT of milling wheat in its weekly tender.

• NWS weather outlook: Heavy rainfall, flooding and severe weather are possible across the Ohio Valley and Mid-Atlantic today... ...Above-normal temperatures continue in the West; East Coast cools down.

Items in Pro Farmer’s First Thing Today include:

• Grains weaker overnight
• ‘No encouraging prospect’ for extension of Black Sea grain deal but talks continue
• HRW wheat tour starts today
• HRW CCI rating inches up but remains historically low
• Consultant again raises Brazilian crop estimates
• Cash cattle end recent skid
• Hog traders extend premiums to cash market

— The head of the South African army met officials in Moscow and visited Russian military academies, just as his country’s president denied favoring Russia over Ukraine. Last week the U.S. alleged that South Africa — which professes to be neutral — had shipped weapons to Russia late last year. South Africa denied the accusation.

— Russia hasn’t implemented its pledged crude-output cuts, with exports hitting a postwar high as Moscow seeks to boost energy revenue to fund military spending, according to the IEA.

— Russia said contacts are continuing relative to the Black Sea Grain Initiative with Kremlin spokesman Dmitry Peskov telling reporters that Moscow has a decision to make on whether to extend the deal or not. He said many questions linger relative to the Russian portion of the deal, presumably referring to the ongoing narrative from Moscow that the portions of the deal to expand Russian fertilizer and grain exports were not being implemented to their satisfaction. The deal is currently set to expire May 18.

Of note: USDA released a Black Sea Trade Vulnerability Dashboard (link).

— Ukraine has removed some of the barriers for agricultural commodity exports that it imposed last year to avoid food shortages, mostly removing export licenses for live cattle, froze beef, chicken meat, eggs, rye, oats, millet and some other commodities. The changes would not affect domestic supplies, the government said in a Telegram message, and were developed with input from associations in a bid to help “optimize” agricultural exports and boost foreign exchange earnings.

— Ukraine grain exports expected to fall sharply amid lower production. Ukrainian exports of corn and wheat are expected to plunge this year as an anticipated sharp drop in production will leave less supplies to ship aboard. The head of the Ukrainian Grain Association (UGA) forecasts corn production will fall 22.7% to 21.1 MMT and exports in 2023-24 will plunge 29.6% to 19 MMT. For wheat, UGA forecasts production of 17 MMT, down 15.8% from last year, while exports for 2023-24 are expected to fall 9.7% to 14 MMT. Sunflower seed production is expected to jump 20% to 12.7 MMT.

— USDA aid payments continue to edge higher; ERP Phase 2 tops $500,000. Payments under USDA aid programs continued to move slightly higher over the past week, with payouts under Phase 1 of the Emergency Relief Program (ERP) still at a total of $7.43 billion as of May 14. But payments for non-specialty crops are now at $6.30 billion, up from $6.29 billion the prior week, while specialty crop payments still total $1.19 billion.

Phase 2 ERP payments reached $508,196 to 259 recipients, crossing the $500,000 threshold.

The Coronavirus Food Assistance Program 2 (CFAP 2) totals remained steady while total CFAP 1 payments remained at $11.83 billion while original CFAP 1 payments are now at $10.64 billion, up from $10.63 billion the prior week. Top-up payments remained at $1.19 billion.

— What President Biden reportedly wants from the debt-limit talks:

(1) that the GOP “drop its effort to roll back parts of Biden’s key legislative accomplishments, like the Inflation Reduction Act, as well as take student debt relief off the table”;

(2) to limit any spending caps “to as little as two years”; and

(3) a debt-ceiling extension “of at least two years — through the 2024 election.

Here is what Biden is reportedly willing to give, with some pushback by other Dems:

(1) accepting discretionary spending caps through the remainder of his term;

(2) “clawing back billions of dollars in pandemic aid once seen as critical to the agenda”; and

(3) possible “restrictions on certain safety net programs for the poor.” But Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus, told Politico: “We did not elect Joe Biden of 1986. We elected Joe Biden of 2020.” Jayapal called the idea of adding work requirements to SNAP “an absolutely terrible idea” and “a nonstarter for many of us across the Democratic caucus.”

— A new White House proposal would allow conservationists to lease federal land for restoration in a similar way as ranchers and oil companies, the Associated Press first reported (link). “While the bureau previously issued leases for conservation in limited cases, it has never had a dedicated program for it.”

— White House adds new permitting staffer. Ana Unruh Cohen will join the White House Council on Environmental Quality (CEQ) as the senior director for clean energy, infrastructure, and environmental permitting on May 22, the Biden administration announced. In her new role, Unruh Cohen will spearhead CEQ’s efforts to update the National Environmental Policy Act, one of the administration’s top remaining priorities. Unruh Cohen has served as staff director on the House Select Committee on the Climate Crisis; director of energy, climate, and natural resources for Sen. Ed Markey (D-Mass.); and deputy staff director for Democrats on the House Natural Resources Committee.

— The U.S. and European Union will pledge to take joint action on shared concerns about China at the upcoming May 30-31 meeting of the EU/U.S. Trade and Technology Council in Sweden, Reuters reported, citing a draft statement. Although the document rarely mentions China by name, it says the European Union and the United States will hold talks on efforts to stop outbound investments that support the technological development of strategic rivals and will coordinate on export controls on semiconductors and “sensitive items” with a military use, among other things.

— China’s industrial production expanded by 5.6% year-on-year in April 2023, missing market forecasts of 10.9%, while accelerating from a 3.9% rise in March. It was the 12th straight month of growth in industrial output and the fastest pace since last September, mainly supported by both manufacturing and mining sectors, following the lift of the zero-Covid policy.

Within manufacturing, production grew for oil & gas (5.6%), chemical raw materials (7.5%), ferrous metal smelting (4.3%), non-ferrous metal smelting (7.4%), electrical machinery (17.3%), electricity (5.5%), communication (1.8%), general manufacturing (4.6%), and automotive (44.6%); while decreasing for textiles (-3.0%), agriculture (-1.6%), coal mining & washing (-0.6%), and non-metallic mineral products (-0.6%).

Considering the first four months of the year, industrial production advanced by 3.6% from the same period in 2022. In 2022, industrial production grew by 3.6%.

— China’s youth unemployment rate rose above 20% for the first time since Beijing began tracking the data five years ago, the latest sign of uncertainty around the country’s economic recovery. A bundle of new economic indicators for April, released Tuesday by China’s National Bureau of Statistics, also showed measures of retail sales, factory production and fixed-asset investment all falling short of economists’ expectations. The data provide fresh evidence that China’s recovery, while still on track, remains unbalanced, the WSJ reports (link).

— The Senate Appropriations Committee continues work on a second China competition bill today. Members will hear from Defense Secretary Lloyd Austin, Secretary of State Antony Blinken, and Commerce Secretary Gina Raimondo about the U.S./China national security and economic relationship.

— John Kerry, Special Presidential Envoy for Climate, highlighted the need to address ag sector emissions in the fight against climate change during his keynote address at USDA’s recent AIM for Climate Summit. He noted that agriculture production accounts for 33% of global greenhouse gas emissions, making it essential to focus on reducing these emissions in the pursuit of a net-zero future. “We can’t get to net zero, we don’t get this job done, unless agriculture is front and center as part of the solution,” Kerry said.

Kerry also emphasized the importance of climate-smart agriculture as a potential solution.

Details: Agriculture generates 10% to 12% of greenhouse gas emissions globally, according to the Intergovernmental Panel on Climate Change. The food system as a whole —including packaging, transportation, and waste management — generates a third of global emissions, according to a 2021 study published in the academic journal Nature Food.

As the global population continues to grow, emissions from food systems are projected to cause an additional half a degree of warming by mid-century. Kerry stressed that lives depend on developing the necessary tools to lower agricultural emissions, urging for innovation within the sector. The global food system, which encompasses land-use change, agricultural production, packaging, and waste management, generates approximately 18 billion tons of carbon dioxide annually, or 34% of total worldwide emissions.

Fox Business News recently interviewed Nicole Ort Moke of Ort Farms. She said “agriculture is very green and as farmers we are the most invested in keeping the land sustainable, keeping it viable for future generations. And everything we do, environmentally, that’s always at the top of our mind.”

Nicole was asked to comment about making planters and other farm equipment electric vehicles. Her response: “Going electric with the tractors the concerns that I have are, are they able to be efficient enough with keeping up the battery life and having enough horsepower for us to be able to feed the nation in an economic, affordable way?”

Fox Business News then talked with Bjørn Lomborg, a Danish author and the president of the think tank Copenhagen Consensus Center. He is the former director of the Danish government’s Environmental Assessment Institute in Copenhagen. He became internationally known for his best-selling and controversial book The Skeptical Environmentalist. He has a new book titled Best Things First.

Lomborg was asked if the U.S needs to restrict farming on a vast scale. Lomborg’s response:

“What John Kerry is telling us is that a third of all emissions come from farming, most of that is in developing countries and remember, what is it that is also mostly a core part of the world? It’s a lot of people starving. There’s something fundamentally wrong about that. Look, there’s maybe 750 million people who are starving, but do we need to make it harder to do agriculture? No. The solution is focused on innovation. First, what matters a lot more is to get cheaper and more food so you can feed your kids. That’s not what John Kerry is pushing for. Secondly, if you focus a lot more on innovation, that’s what’s in my new book, that’s one of the 12 great things to do for the world. If we innovate to have better agriculture that produces more at lower cost, it also helps the environment because it reduces climate emissions because you don’t need to cut down a lot of forests.”

Upshot: Lomborg says Kerry’s solution to the climate problem is not going to work and should be withdrawn. He says the U.S. and other countries should be spending the money that we’re spending on innovation and technology. He adds: “Look at all the other problems that are also facing the world. Remember, people still die from easily curable infectious diseases. There is no good education in most of the poor part of the world and on and on. All these problems have smart solutions as we just talked about for agriculture. This is about getting more innovation, especially for the world’s poorest for cassava and sorghum and all these other grains… all these other agricultural products that don’t get a lot of funding because they’re not growing in rich countries. Those could be better, cheaper, more effectively produced. More production, lower price and lower CO2 emissions.”

Fox Business also checked in with Kevin O’Leary, chairman of O’Leary Ventures. He said: “I don’t know how we got politicized when it comes to two of the most important things you have to have for prosperity. You got to have food and you got to have energy. Nobody disputes that and yet they become very partisan issues. Let’s take Kerry’s situation right now. I’m pretty sure it’s a personal opinion. He wishes he could roll back that statement in a very big way. I don’t think he checked in with or his staff didn’t check in with the White House. This is not the time for this policy, with the politics going on months before the election. The support in rural regions of America for the current administration is almost zero. And this idea of enhancing the cost of farming and food in America or making it more expensive when we have inflation. On protein, very bad politics, very bad policy. I’m blaming his staff for not doing research. If you’re in the rural areas and you’re a farmer or you’re a rancher, very often a lot of acres forested, or just pasture, and that is a carbon sink and absorbs up to two and a half to three tonnes of carbon per year per acre. Those are things that are very important if Kerry wants to get to carbon neutrality in 2050 There’s a massive carbon offset market emerging and your friend is the farmer… he’s the landowner, a rancher. If you alienate them now, they’re not going to help you towards getting carbon neutrality. I I thought this was so tone deaf and such a bad time that I’m sure he regrets it.”

He continued: “Voters in every state want sustainability. They want a better climate for their children. Let the market [work it out]. … We have to really be strategic, we can be clean, we can be more efficient, we can be productive, and we can do it with technology innovation, but a blanket statement that farmers are to blame for climate change is pure political suicide. I guarantee you that.”

The pros and cons of focusing on U.S. agriculture re: climate change:

Pros:

• Reduction of greenhouse gas emissions: Agriculture is a significant contributor to global greenhouse gas emissions, particularly methane and nitrous oxide. By focusing on sustainable farming practices, emissions can be reduced.
• Carbon sequestration: Certain agricultural practices, such as cover cropping and no-till farming, can help sequester carbon in the soil, reducing atmospheric CO2 levels.
• Improved water management: Sustainable agriculture can help manage water resources more efficiently, reducing stress on freshwater sources and mitigating the effects of droughts and floods.
• Biodiversity protection: Promoting agricultural practices that protect habitats and ecosystems can contribute to biodiversity conservation and support ecosystem services that are crucial for human well-being.
• Food security: Climate-resilient agricultural practices can help ensure a stable food supply in the face of climate change-induced threats like extreme weather events, pests, and diseases.
• Economic benefits: Investing in sustainable agriculture can create jobs and stimulate economic growth in rural areas, fostering the development of green technologies and practices.

Cons:

• Short-term economic costs: Transitioning to sustainable agricultural practices may require significant investments in new technologies, infrastructure, and training, which could be costly in the short term.
• Resistance to change: Farmers and other stakeholders might be resistant to change due to a lack of understanding, financial incentives, or concerns about potential negative impacts on their livelihoods.
• Trade-offs and unintended consequences: Focusing on agriculture alone may not be sufficient to address climate change, and some solutions might lead to trade-offs with other environmental, social, or economic objectives.
• Political challenges: Policy changes necessary to support sustainable agriculture may face opposition from powerful interest groups, such as the agribusiness sector or the fossil fuel industry, making it difficult to implement effective policies.
• Global coordination: While focusing on U.S. agriculture can contribute to mitigating climate change, it’s essential to recognize that climate change is a global problem that requires international cooperation and coordination to address effectively.

Upshot: While people like Kerry say that focusing on U.S. agriculture in the context of climate change can yield significant environmental, social, and economic benefits, others note there are challenges to overcome, such as the short-term costs, resistance to change, and the need for global coordination.

— USDA announces $11 billion for rural clean energy transition. The Biden administration plans to make nearly $11 billion in grants and loan opportunities available to rural electric providers to help them transition to clean energy (link). This represents the largest investment in rural electricity since the Rural Electrification Act of 1936. The funds aim to support cleaner energy, create new jobs, reduce energy costs, and combat climate change.

The Empowering Rural America (New ERA) program will make $9.7 billion available to eligible rural electric cooperatives for deploying renewable energy systems, zero-emission systems, and carbon capture systems.

The Powering Affordable Clean Energy (PACE) program will provide $1 billion in partially forgivable loans to renewable-energy developers and electric service providers for financing large-scale solar, wind, geothermal, biomass, hydropower projects, and energy storage systems.

To apply for the New ERA program, eligible entities must submit a Letter of Interest between July 31 and August 31.

For the PACE program, USDA will accept Letters of Interest starting on June 30 until Sept.29. Loans through the PACE program may be forgiven by 40% of the loan amount, and up to 60% for applicants in Puerto Rico, the Federated States of Micronesia, the Republic of the Marshall Islands, the Republic of Palau, and Tribal communities.

Background: Cooperatives are tax-exempt and can’t take advantage of renewable energy tax credits that large power companies can get. The loans and grants are meant to fill that gap and speed rural America’s transition to clean energy, instead of coal and oil-burning power plants. The funds can be used to deploy renewable energy systems, zero emission systems and carbon capture systems.

— Electric vehicles fuel bipartisan ethanol bill. As consumers turn to electric vehicles to reduce their carbon footprint, crop growers and fossil-fuel producers are looking to ethanol as a way to boost the appeal of gasoline-powered cars, as the shift to electricity threatens demand for the fuels. A bipartisan bill sponsored by Rep. Mariannette Miller-Meeks (R-Iowa) proposes to reclassify the gasoline-additive as an “advanced biofuel” under the Renewable Fuel Standard (RFS). With co-sponsors from Texas, Illinois, and Oklahoma, the bill shows how oil-producing states and the Corn Belt — which once clashed over how much ethanol should be blended in gasoline — have come to find the same interest in the gasoline. “Liquid fuels are the backbone of our society, which is why I’m ecstatic to support this legislation,” said Rep. Wesley Hunt (R-Texas).

— California to work with pork industry on Prop 12 implementation. The California Department of Food and Agriculture (CDFA) pledged (link) to work with the pork industry to implement Proposition 12, the initiative passed by the state’s voters in 2018 which established minimum confinement standards for the sale of certain pork products within California borders. The U.S. Supreme Court last week upheld the law.

In a blog post, CDFA said, “As we approach July 1, when a previous court order suspending Prop 12 enforcement expires, CDFA looks forward to engaging with industry representatives to further discuss what is needed to achieve a smooth transition to compliance.” Steve Lyle, the CDFA director of public affairs, said: “Enforcement with respect to pork products cannot occur prior to July 1 pursuant to a stipulation filed in the Cal Hispanic Chambers of Commerce case.” CDFA in the coming months said it will “continue to focus on engaging with stakeholders to inform and educate. Enforcement actions could be taken by the attorney general’s office or any county or city-level prosecutor in California.”

CDFA’s Animal Care Program will continue to focus on implementation of distributor registration requirements, accreditation of third-party certifiers, and outreach and technical assistance to businesses throughout the supply chain.

Of note: Here is a link to what a specialist in animal law says about the SCOTUS ruling. He expects that the Supreme Court’s decision to uphold California law will result in a patchwork of laws that are likely to make national meat producers very uncomfortable.

— Brazil confirms first cases of HPAI in wild birds. Brazil, the world’s top chicken exporter, for the first time confirmed highly pathogenic avian influenza (HPAI) cases but only in wild birds, the country’s ag ministry said on Monday. The Brazilian government confirmed the H5N1 subtype of the HPAI virus in two marine birds on the coast of Brazil’s southeastern state of Espirito Santo. The ag ministry said because the cases were detected in wild animals, Brazil’s status “HPAI-free” was not affected. Link to more via Bloomberg.

— Processed meats are the latest public-health villain. New York City is eliminating the likes of sliced ham, bacon and sausage from public-school and hospital menus by 2025, the WHO is coming up with recommended consumption limits and U.S. agencies have set sodium-reduction goals for them. Behind the decisions, and many doctors’ push to get people to eat less processed meat, is growing research linking it to health problems including heart disease, stroke, Type 2 diabetes, certain cancers and dementia. Link to more via the WSJ.

— Acetaminophen overdose is the leading cause of liver transplantation in the United States, according to a recently updated report by the National Institutes of Health. About 500 Americans die yearly of complications from acetaminophen toxicity. It also causes approximately 56,000 emergency department visits and 2,600 hospitalizations annually. Even though acetaminophen is effective in treating symptoms such as pain and fever, high doses of the medication can be dangerous and cause potentially irreversible liver damage. When acetaminophen is taken in high doses, the liver may be unable to keep up with the breakdown process, and toxic byproducts can accumulate, causing damage to liver cells.

— Glyphosate in oat milk. Two out of 13 popular brands of oat milk had detectable levels of the controversial herbicide glyphosate. Link for details.

— Gov. Ron DeSantis of Florida reportedly plans to gather his top donors next week, just before he officially files to run for president. Link for details via Politico.

— The House Agriculture Committee will examine how the National Forest System can help confront wildfires and support healthy forests. Later this afternoon, a House Natural Resources subcommittee will look at the challenges facing firefighters and wildfire suppression ahead of this year’s wildfire season.

— A four-year probe into the FBI’s investigation of Donald Trump’s ties to Russia found no evidence of a deep-state plot against the former president. It did, though, strongly criticize the bureau’s handling of the case. John Durham, the special counsel in charge of the inquiry, accused FBI officials of using uncorroborated information, lacking “analytical rigor” and relying too heavily on tips provided by Trump’s political opponents.

— The U.S. Supreme Court has declined to review a $39 million Roundup class settlement involving a large award, dismissing an objector’s argument that the award wrongfully diverted class members’ compensation to third parties. The settlement was reached between Bayer AG unit Monsanto Co. and plaintiffs Lisa Jones, Horacio Torres Bonilla, and Kristoffer Yee, who claimed Monsanto deceived consumers about the health risks of the weed killer. The settlement included a $14.4 million cy pres award for the National Consumer Law Center, the National Advertising Division of BBB National Programs, and the Center for Consumer Law & Economic Justice at the University of California, Berkeley. Objector Anna St. John argued there is a circuit split on various aspects of cy pres awards and further outreach efforts to class members were feasible. Monsanto and the plaintiffs opposed review, stating that there is no circuit split and the courts below found cy pres appropriate.

— The Supreme Court said it would decide a case on lawmakers’ access to records on a Trump hotel in a Washington landmark. Congressional Democrats in 2017 sued for information as they questioned whether payments from foreign interests to former President Donald Trump’s real-estate company for stays at the Trump International Hotel in the Old Post Office building ran afoul of constitutional curbs. The litigation outlived both the Trump administration and the Trump International itself, which became a Waldorf Astoria in May 2022.

— Yesterday, Sports Illustrated announced that 81-year-old Martha Stewart will appear on one of the covers of this year’s Swimsuit issue, making her the oldest SI Swimsuit cover model ever.

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