Lawmakers Renewing Efforts to Intensify Oversight of Foreign Purchases of U.S. Farmland

U.S. money supply fell for first time ever in 2022 | Will we have a new farm bill this year?

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January 26, 2023 06:18 AM

U.S. money supply fell for first time ever in 2022 | Will we have a new farm bill this year?

In Today’s Digital Newspaper

Abbreviated format today as I am in St. Pete’s Beach in Florida speaking at Ag View’s 2023 Executive Business Conference.

Equities: Global stock markets were mostly higher overnight. U.S. stock futures rose early Thursday, as investors digest the latest release of corporate earnings. Both Tesla and Levi’s were among stocks that beat revenue expectations. Meanwhile, traders will also be watching for data on jobless claims, gross domestic product, and durable goods — all due out today

On Wednesday, only the Dow managed to finish in positive territory after all three major indices gradually lifted off their morning lows into the close. The Dow rose 9.88 points, 0.03%, at 33,743.84. The Nasdaq fell 20.91 points, 0.18%, at 11,313.36. The S&P 500 was down 0.73 point, 0.02%, at 4,016.22.

Outside markets: Wednesday saw the dollar selling off after the Bank of Canada said it was ready to pause/end its tightening cycle. Some in the market could be thinking the Fed is of a similar mindset. Today the focus is on U.S. 4Q GDP data. The U.S. dollar index is slightly higher early today. Nymex crude oil futures prices are a bit firmer and trading around $80.75 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.485%.

U.S. money supply fell for first time ever in 2022. The Federal Reserve’s main measure of the nation’s money stock — known as M2 money supply — slid for a fifth straight month in December, dropping a record $147.4 billion to a seasonally adjusted $21.2 trillion from the month before. From a year earlier, the volume of cash, coins, checking and savings deposits, other small-time deposits and cash parked in money market funds fell by nearly $300 billion – the first ever annual decline. The recent decline in the money supply comes as the Fed has been aggressively raising rates to push inflation back to its 2% target. Since last June, it has also cut its holdings of Treasury and mortgage bonds by $400 billion to roughly $8.5 trillion to augment that process, further stripping the economy of financial liquidity. St. Louis Fed President James Bullard said the decline in money supply “bodes well for disinflation.”

“Worst food crisis.” Cindy McCain, U.S. ambassador to the United Nations’ agencies for food and agriculture in Rome, has said that a spike in food prices will continue this year — and that only when Russia’s war in Ukraine is over will supplies be safe. McCain called it the “worst food crisis” and “worst humanitarian crisis” since World War II. She also said U.S. funding for the agencies would be “tight” this year.

Smartphone shipments slow. Shipments of smartphones declined across the globe during the holiday shopping quarter, according to IDC, a market research firm. Overall, firms shipped 18.3% fewer smartphones than they did in the same quarter of 2021, representing the biggest-ever decline. For the full year, companies shipped 1.21 billion smartphones, which is the lowest annual total since 2013.

Personnel:

White House considers Fed Vice Chair for role as top economic adviser. President Biden is strongly considering Federal Reserve Vice Chair Lael Brainard to become the next head of the National Economic Council (NEC), the WSJ reports. The NEC director serves as the top economic adviser to the president and plays a central role in shaping a range of policy decisions. Appointing Brainard would install an economist with broad domestic and international policy experience at a time when the economy is cooling under the weight of high inflation, climbing interest rates and the global fallout of the Covid-19 pandemic and Russia’s invasion of Ukraine.
Toyota, Japan’s biggest carmaker, announced that Koji Sato, its chief branding officer, will replace Akio Toyoda as president and chief executive from April 1. Toyoda, who is the grandson of Toyota’s founder and has presided over the firm for more than a decade, will become chairman. Sato will be charged with overseeing the company’s transition to selling more electric vehicles.

Russia/Ukraine:

U.S. tanks for Ukraine. President Biden announced Wednesday that the U.S. would send 31 M1 Abrams tanks to Ukraine to help it defend against Russian invaders and that Germany would follow through by contributing 14 Leopard 2 tanks, freeing other allies to send their own. He emphasized that the buildup was not meant to expand the war into Russia.
Ukraine’s military acknowledged that it had retreated from Soledar, a strategic eastern city that Russian forces had been fighting to capture in months of brutal trench warfare and artillery battles.
A barrage of Russian missiles struck Kyiv on Thursday morning, less than 24 hours. Officials said they expected at least 30 missiles and Ukrainian air defenses reportedly shot down 24 Iranian-made Shahad kamikaze drones and 15 missiles, according to the Guardian.

China:

After paying for costly “zero Covid” measures, local governments in China have few resources to buy expensive natural gas. Link for more via NYT. The lack of natural gas, which is used widely across China to heat homes and businesses, has angered tens of millions of people and spilled over into caustic complaints on social media. In China, the temperature has become unusually frigid. Mohe City, the northernmost city in China, reached lows for three straight days below minus 50 degrees Celsius. China’s meteorology agency has issued nationwide warnings this week of very cold weather.
China’s palace politics: Xi Jinping loyalists compete for power. That’s according to a Financial Times account (link/paywall), which says a new landscape of political divisions is forming at the top of the Chinese Communist party
U.S. corn exports to China dip as Brazil garners a portion of the market. Chinese buyers hold contracts for 3.7 million metric tons of U.S. corn, 70% less than at this time a year ago, according to a USDA ag attaché report (link) that notes Brazil will likely have as much as 50 million tons of corn to export for the 2022-23 marketing year, FAS says.
Lawmakers are renewing efforts to intensify oversight of foreign purchases of U.S. farmland. Aimed at concerns over recent acquisitions by Chinese buyers, the bipartisan legislation would put the agricultural sector in the domain of the Committee on Foreign Investment in the U.S., or CFIUS, the federal panel that reviews investments for national-security interests, the Wall Street Journal reports (link).
China owned slightly less than 1% of foreign-held U.S. agricultural land at the end of 2021, while Canadian investors held the largest share, at 31%, according to USDA data (link). Investors from the Netherlands, Italy, the U.K. and Germany collectively held another 31% of foreign-held U.S. acres. Foreign investors held a total of roughly 40 million acres, or just over 3% of all privately held agricultural land, according to the USDA.
Lawmakers comments. “Over the past few years, we’ve seen an alarming increase in foreign purchases of farmland and food companies, particularly by China,” said Sen. Tommy Tuberville (R-Ala.), who is introducing the legislation in the Senate along with GOP Sens. Roger Marshall of Kansas, Cynthia Lummis of Wyoming, Mike Braun of Indiana, Kevin Cramer of North Dakota and Rick Scott of Florida. “That’s why America’s agriculture community needs to have a permanent seat at the table when our government vets foreign investment in our country.” Rep. Ronny Jackson (R-Texas) is introducing the bill in the House, along with Democratic Reps. Abigail Spanberger of Virginia and Vicente Gonzalez of Texas, and more than two dozen other co-sponsors.

Policy:

More hearings slated for new farm bill. Some were held last year and four more were announced by the Senate Ag Committee starting next Wednesday on the trade and horticulture titles. The second hearing on Feb. 9 will cover commodity programs, conservation and credit programs. Look for the House Ag panel to announce more farm bill listening sessions ahead.
Will a new farm bill be completed this year? The more experienced farm bill watchers say “no,” largely due to the need to educate new members of Congress, especially in the House, and their staffs. But Ag panel leaders in the House and Senate say they want to reach the end zone… by September, according to House Ag Committee Chair G.T. Thompson (R-Pa.). Some say a one-year or longer extension may not be so bad, due to the possibility of damaging amendments offered in the House by some conservative lawmakers. Bottom line: Leaders of both political parties want to get something accomplished, and a farm bill may be on the list. The first six months should help determine the odds as both parties deal with increasing or suspending the debt limit. If that can be accomplished, a farm bill could as well.
A group of Senate conservatives usually voting against debt-limit measures say they’ll change if House Republicans can strike a good deal, encouraging their colleagues to negotiate without fear of being betrayed by fellow conservatives. “There’s a number of us who have never voted for increasing the debt ceiling,” Sen. Ron Johnson (R-Wis.) said at a press conference where he was joined by Rick Scott (Fla.), Mike Braun (Ind.), Ted Cruz (Texas), and Rand Paul (Ky.). They’re some of the senators who could be counted on in most cases to vote against debt-limit bills, appropriations packages, and other must-pass items. “As senators who have taken that position in the past, we need to provide that support for our colleagues in the House, fiscal conservatives that also will take the votes they’ve never taken in the past,” he added. Johnson said he could vote for an increase “if we attach to it certain fiscal controls.” The members called for fiscally conservative changes to the congressional budget process. But Paul specifically said lawmakers could reinstate statutory limits on discretionary spending, as Congress did in the 2011 debt-limit deal. “There’s no reason why raising the debt ceiling can’t have spending caps,” Paul said.

Trade Policy:

USTR again raises agriculture biotech issues with Mexico. Deputy U.S. Trade Representative Jayme White yesterday met with Mexico’s Under Secretary of Economy for Foreign Trade Alejandro Encinas in San Diego, and White called on Mexico to “return to a science- and risk-based regulatory approval process for all agricultural biotechnology products in Mexico.” The two also discussed issues on Mexico’s energy policies that are under a U.S.-Mexico-Canada Agreement (USMCA) dispute process.

White also met with Canada’s Deputy Minister for International Trade Rob Stewart where issues on Canada’s unilateral digital service tax and pending legislation in Canada could affect digital streaming services and online news sharing. However, the dispute between the two countries over Canada’s implementation of its dairy tariff-rate quotas was not mentioned in the readout from the Office of the US Trade Representative (USTR).

The three officials will take part today in a USMCA deputies meeting in San Diego.

The U.S. already won one case via USMCA dispute settlement procedures over Canada’s dairy TRQ implementation and has requested new consultations on Canada dairy TRQ allocation measures.

Mexico official admits country cannot replace imports of U.S. corn. While Mexico wants to reduce its imports of corn by 30% to 40% by 2024, Deputy Agriculture Minister Victor Suarez told reporters in Mexico City that it cannot replace its imports of U.S. corn for livestock feed. He declared the country self-sufficient in white corn production, but still highly dependent on the U.S. for yellow corn to feed livestock. “We are not going to be able to produce another 16 million tonnes of corn, which is currently imported for the livestock sector,” Suarez said, adding the next government will have to address the issue as the country needs to “continue the strategy of saving small growers and food self-sufficiency.”

Energy and climate change:

The U.S. and the European Union are discussing a possible deal on minerals and critical raw materials in a bid to allow the EU to qualify for benefits in President Joe Biden’s massive new green investment plan, according to Bloomberg (link), citing people familiar with the matter. The Inflation Reduction Act, which includes roughly $500 billion in new spending and tax breaks over a decade to promote US manufacturing and services, offers certain exceptions for countries that have free-trade agreements with the US. A deal on key materials used in electric vehicles and batteries could allow the EU to access some of those advantages, said the people.
European natural gas prices rose nearly 4% to €59/MWh on Thursday, after falling 15% in the first three days of the week, as traders weigh risks of a rise in Asian demand and supply prospects. A cold snap is hitting the Korean Peninsula, northern China and Japan while milder temperatures are expected to return to Europe next week. Also, China’s reopening is seen raising energy demand and competition on the LNG market, thus lifting prices.

Congress:

McCarthy blocks two Democrats from Intelligence Committee. House Speaker Kevin McCarthy (R-Ky.) said Tuesday he will block Reps. Adam Schiff and Eric Swalwell from serving on the House Intelligence Committee, days after House minority leader Hakeem Jeffries (D-N.Y.) formally recommended the California Democrats be reappointed to the panel. McCarthy has argued that both Schiff and Swalwell are unfit to serve on the committee, using Schiff’s work conducting the first impeachment investigation of President Trump and Swalwell’s alleged ties to a Chinese intelligence operative. ‘’This is not anything political. This is not similar to what the Democrats did,’’ McCarthy, a California Republican, said. ‘’Those members will have other committees, but the intel committee, the Intel committee’s responsibility is a national security … I respect Hakeem Jeffries’s support of his conference and his people. But integrity matters.’’

Politics & Elections:

Meta to reinstate Donald Trump’s accounts on Facebook and Instagram. The former U.S. president had been suspended from platforms after Jan. 6 Capitol riots.

Health:

16.3 million+: The number of people who selected a plan on the Affordable Care Act marketplaces. That’s an all-time high, according to the White House. The enrollment increase is due to generous subsidies and aggressive outreach.
Global cases of Covid-19 are at 669,658,061 with 6,798,711 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 102,181,886 with 1,106,524 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 667,815,321 doses administered, 268,765,902 have received at least one vaccine, or 81.57% of the U.S. population.
Updated Covid-19 boosters are cutting the risk that a person will get sick from the coronavirus by about half, research from the CDC shows. For adults between the ages 18 and 49, the studies showed Covid-19 boosters lowered the odds of getting a symptomatic infection caused by the BA.5 subvariant by 52% and cut the odds of getting an infection caused by XBB or XBB.1.5 by 49%. For adults 50 to 64, the new boosters reduced the odds of getting sick with Covid-19 by 43% for BA.5 and 40% for XBB subvariants. For those 65 and older, the boosters cut the odds of an infection with symptoms by 37% and 43% for the BA.5 and XBB subvariants, respectively.

NWS weather outlook: Impactful storm affecting the Northeast U.S., southward along the east coast into early Thursday... ...Active Lake effect snows downwind of the Great Lakes on Thursday and again late Friday across the Upper Lakes... ...Arctic air to surge south into the Northern Plains/Upper Mississippi Valley on Friday.

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