Major Business Leaders & Economists Fret About America’s Growing Debt Problem

More layoffs at John Deere | Wheat market rally | Farm bill food policy issues | Spike in shipping rates and delays

MARKET FOCUS

• More layoffs at John Deere
• New York has housing inflation
• Fed’s Loretta Mester” Three interest rate cuts in 2024 no longer appropriate
• Capital Economics: Fed’s policy should not deter other central banks from cutting
• Yellen announces opposition to proposed global wealth tax on billionaires
• Container freight rates rising
• Ag markets today
• USDA announces two daily export sales of corn to Mexico and Spain
• Grain trader and analyst Richard Crow on wheat markets
• Ag trade update
• NWS weather outlook
• Pro Farmer First Thing Today items

BALTIMORE BRIDGE COLLAPSE

• Container ship Dali refloated and returned to Baltimore; investigations ongoing

ISRAEL/HAMAS CONFLICT

• Biden rebukes ICC for seeking arrest warrants for Netanyahu and Sinwar
  

RUSSIA & UKRAINE

• Xi and Putin to meet again in July in Kazakhstan
• Officials: Ukrainian crops largely unaffected by recent frosts, unlike Russia
• IKAR further cuts Russian wheat production, export forecasts
  

POLICY

• McGovern as expected opposes House GOP nutrition proposals in farm bill
• Vilsack allocates RAPP funds amid House Ag farm bill markup

PERSONNEL

• FDIC Chairman Martin Gruenberg bows to pressure to resign from bank regulator
  

CHINA

• China condemns Blinken over Taiwan, sanctions ex-U.S. lawmaker
• China to offer nationwide crop insurance for staple grains
  

TRADE POLICY

• Study: Trump’s proposed tariffs and tax cuts to burden America’s poorest
  

ENERGY & CLIMATE CHANGE

• CFTC to issue final guidance on carbon credits within next six months
  

HEALTH UPDATE

• Dental insurance comes to ObamaCare
• Hims & Hers offers cheaper versions of weight-loss drugs
  

POLITICS & ELECTIONS

• Dem Rep. David Scott faces challenge in today’s Georgia primary election
  

— Equities today: In Asia, Japan -0.3%. Hong Kong -2.1%. China -0.4%. India -0.1%. In Europe, at midday, London -0.4%. Paris -1%. Frankfurt -0.4%. There are no U.S. economic reports to watch but a handful of Fed speakers on the calendar this morning: Barkin (9:00 a.m. ET), Waller (9:00 a.m. ET), Williams (9:05 a.m. ET), Bostic (9:10 a.m. ET) and Barr (11:45 a.m. ET).

U.S. equities yesterday: The Nasdaq and S&P 500 notched fresh record finishes to open the week while the Dow shrank back from the 40,000 point level. The Dow fell 196.82 points, 0.49%, at 39,806.77. The Nasdaq rose 108.91 points, 0.65%, at 16,794.87. The S&P 500 was up 4.86 points, 0.09%, at 5,308.13.

— Ag markets today: Grain and soy futures pulled back from Monday’s strong gains overnight, though buyers are returning to wheat early this morning. As of 7:30 a.m. ET, corn futures were mostly 2 cents lower, soybeans were 5 to 8 cents lower and wheat futures were narrowly mixed. Front-month crude oil futures were $1.35 lower, and the U.S. dollar index was trading just below unchanged.

Traders expecting short-term top in cash cattle. Cash cattle averaged $188.54 last week, up $2.60 from the previous week, the fourth consecutive weekly gain and the third highest on record. Previous runups to highs or near-record highs in the cash market have been followed by a brief period of weaker prices. Based on Monday’s modest 42.5-cent gain in June live cattle futures despite the big discount to the cash market suggests traders sense a short-term cash top is close.

Pork cutout firms, cash index slips. The pork cutout value firmed 92 cents on Monday, despite giving back some of the morning gains. Movement was strong to open the week at 327.0 loads. The CME lean hog index is down 7 cents to $92.22 as of May 17. With seasonally tightening market-ready supplies and packers’ margins in the black, any decline in the cash index should be minor and temporary.

— Agriculture markets yesterday:

• Corn: July corn rallied 8 cents to $4.60 1/2 and ended the session above the 100- and 20-day moving averages.
• Soy complex: July bean futures surged 20 cents to $12.48 and closed on today’s highs. July meal futures rallied $5.30 to $374.10 and closed near session highs. July bean oil futures jumped 105 points to 46.32 cents and settled nearer today’s highs.
• Wheat: July SRW wheat closed up 37 1/2 cents at $6.88 3/4, near the session high and closed at a nine-month-high close. July HRW wheat rose 35 cents at $6.96 3/4 and near the session high. July spring wheat futures closed 27 3/4 cents higher to $7.39 1/4.
• Cotton: July cotton rose a modest 14 cents to 76.03 cents and nearer the session low.
• Cattle: June live cattle rose 42 1/2 cents to $181.475 and nearer the session low. Prices hit a seven-week high early on. August feeder cattle fell $1.375 to $258.475. Prices closed nearer the session low after hitting a three-week high early on.
• Hogs: June lean hog futures climbed 42.5 cents to $96.925 and settled nearer session highs.
  

— Quotes of note:

• Fedspeak. Loretta Mester said that three interest rate cuts in 2024 is no longer appropriate and reiterated that policymakers need more data before making a decision, even adding she’d be open to a rate hike if warranted. Raphael Bostic, Thomas Barkin, John Williams and Christopher Waller are Fed speakers today.
  
• Neil Shearing of Capital Economics says the U.S. Federal Reserve’s monetary policy should not deter other central banks from cutting interest rates. Although currencies may weaken against the dollar when local rates are lower, this is unlikely to cause significant inflation since only 10%-15% of CPI baskets in advanced economies outside the U.S. consist of imported goods and services. Shearing predicts the Fed may cut rates this year despite its hawkish stance. Even if the Fed maintains current rates, it won’t stop the European Central Bank (ECB) and the Bank of England from reducing their interest rates more than the market expects.
  

— U.S. Treasury Secretary Janet Yellen announced opposition to a proposed global wealth tax on billionaires, an idea suggested by Brazil, France, and other nations to address economic inequality. Brazil, currently leading the Group of 20 major economies, advocates for a coordinated tax approach for the ultrawealthy to prevent them from moving their money to low-tax jurisdictions, like the global minimum tax on corporations agreed upon by around 140 countries in 2021. Yellen stated the U.S. would not support discussions on the wealth tax. She is scheduled to meet with finance ministers from the Group of Seven advanced democracies later this week to discuss the issue.

— Major business leaders and economists concerned about America’s growing debt problem. Prominent figures in the business and economic sectors are expressing alarm over the rising U.S. national debt and deficit spending, fearing a potential crisis.

JPMorgan CEO Jamie Dimon warned that unchecked deficit spending could lead to a crisis, attributing higher inflation to the deficit. He urged the US government to focus on reducing the deficit before it becomes a market-driven problem that must be addressed under more difficult conditions.

Bridgewater hedge fund founder Ray Dalio echoed Dimon’s concerns, telling the Financial Times that investors should worry about the U.S. debt situation.

Economist Glenn Hubbard noted that interest payments on the debt have grown significantly, now equating to defense spending levels. He emphasized that the next president will have to tackle this issue, even if it’s not a campaign focus.

Debt explosion: The national debt has surged due to Trump-era tax cuts and Covid-era stimulus programs, further exacerbated by spending under President Biden’s Inflation Reduction Act. The U.S. has run a budget deficit for six of the first seven months of the current fiscal year, accumulating a deficit of about $855 billion, or more than 6% of GDP. The total debt now stands at $34.6 trillion.

Economic implications: Running a high deficit while the economy is at full employment suggests a potentially catastrophic deficit during a recession. Increased Treasury securities issuance will raise borrowing costs, potentially stifling economic growth.

Global impact: The IMF has warned that rising U.S. debt could elevate global borrowing costs and destabilize financial markets.

Interest payments: The U.S. gov’t spends $2.4 billion daily on interest payments... expected to double within a decade due to maturing low-interest Treasuries replaced by higher-yield bonds.

Voter concerns: A significant majority of voters (82%) want the president and Congress to address the debt, with 80% indicating increased concern over recent years. However, political reluctance to discuss tax increases or spending cuts in an election year remains a barrier to action.

Projections: If the debt issue remains unaddressed, the 10-year U.S. Treasury yield could rise to 5.5%, pushing mortgage rates to 8%, creating further economic strain and political pressure.

Market perspectives:

— Outside markets: The U.S. dollar index was essentially steady with the euro, yen and British pound all firmer against the greenback. The yield on the 10-year U.S. Treasury note was weaker, trading around 4.43%, with a mixed tone in global government bond yields. Crude oil futures were under increasing pressure, with U.S. crude around $78.30 per barrel and Brent around $82.15 per barrel. Gold and silver were lower, with gold around $2,428 per troy ounce and silver around $32.03 per troy ounce.

— Container freight rates rising. Ship diversions from the Red Sea, due to attacks by Iran-backed Houthi rebels, have caused container freight rates to increase by about 30% in recent weeks. This rise is expected to continue as importers boost their volumes for the busy summer season, the Wall Street Journal reports (link). Nine out of ten large container ships are avoiding the Red Sea and the Suez Canal, opting for a longer route around the Cape of Good Hope, which adds up to two and a half weeks to travel time.

This change has led to a spike in shipping rates and delays. The article cites Dennis Tsakiris, who imports goods for his restaurants, reporting that shipping times have doubled and costs have increased by 30%. During the pandemic, shipping costs from China to California peaked at $20,000 per container but have now stabilized at $4,500, up from $3,100 in April. Rates from China to Europe have also risen.

Smaller customers are particularly affected by these changes, while larger importers like Amazon and Walmart, with long-term contracts, can better absorb the impact. The National Retail Federation (NRF) indicates strong import trends, with ports handling increasing volumes of containers, suggesting robust consumer demand.

Shipping companies have adjusted their networks to account for the longer routes. Maersk, for example, has increased its container capacity by over 10% and expects higher earnings for the year. The diversions are seen as beneficial for shipping lines, which have raised their yearly outlooks. However, it remains uncertain whether the recent rate increases are a short-term spike or indicative of long-term trends.

— USDA daily export sales:

• 113,050 metric tons of corn to Mexico. Of the total, 56,525 metric tons is for delivery during the 2023-2024 marketing year and 56,525 metric tons is for delivery during the 2024-2025 marketing year.
• 110,000 metric tons of corn to Spain during the 2023-2024 marketing year.

— Grain trader and analyst Richard Crow on wheat markets: “The story of the markets is all about supply issues. Russia’s wheat crop gets the most attention as production estimates to the 80-million-ton area circulate. The weather in Russia is dry for a week, past that is uncertain. The Russia wheat could be handled easier if not for EU quality questions and a smaller crop due to less acreage. Rio Grande is not getting its wheat crop planted. The U.S. wheat harvest is underway with harvesting in Southern Oklahoma Rain for the SW would bring no relief and just cause problems. Kansas could still benefit from rain. A Russia wheat crop of 80 million tons will shift demand to other areas. How much wheat feeding will be reduced will take time, but corn gets support from potential demand increase.”

— Ag trade update: Tunisia tendered to buy 100,000 MT of optional origin soft milling wheat. Egypt tendered to buy at least 50,000 MT of optional origin raw cane sugar.

— NWS weather outlook: An increasing threat of severe weather and excessive rainfall as well as high winds expected to overspread the northern Plains and upper Midwest today through tonight and into Wednesday morning... ...Severe weather and heavy rain threat will emerge across the southern Plains to the mid-Mississippi Valley on Wednesday... ...Cool conditions with periods of shower and high elevation snow chances from the Rockies to the Pacific Northwest... ...Well above average temperatures across the central Plains will be replaced by cooler conditions but summer-like weather expected to continue across the southern Plains to the Northeast.

Items in Pro Farmer’s First Thing Today include:

• Wheat mixed, corn and soybeans weaker this morning
• HRW CCI rating improves, SRW declines
• Cordonnier leaves South American crop estimates unchanged

— Container ship Dali refloated and returned to Baltimore; investigations ongoing. Nearly two months after crashing into the Francis Scott Key Bridge, the container ship Dali has been refloated and returned to the Seagirt Marine Terminal in Baltimore. The Dali had been trapped under part of the bridge it destroyed since the incident on March 26. Controlled explosions freed the ship on May 13, allowing it to be moved by tugboats.

The crew remained onboard during the two-month ordeal and are still part of ongoing investigations. The National Transportation Safety Board (NTSB), the Coast Guard, and the FBI are investigating the causes of the crash, focusing on electrical problems and power outages that occurred before the collision.

The Dali will stay in Baltimore for four to six weeks for debris removal before heading to Norfolk for further repairs. The cargo, including soybeans and other goods, will largely remain on board to keep the ship low enough to pass under the Chesapeake Bay Bridge.

Of note: The main shipping channel, cleared of debris, is expected to fully reopen by the end of May, restoring normal traffic.

— Biden rebukes ICC for seeking arrest warrants for Netanyahu and Sinwar. President Joe Biden criticized the International Criminal Court (ICC) for its intention to issue arrest warrants for Benjamin Netanyahu, Israel’s prime minister, and Yahya Sinwar, Hamas’s leader. Biden labeled the ICC’s effort as “outrageous” and asserted that there was “no equivalence” between Israel and Hamas. The court’s chief prosecutor claimed there was evidence implicating both leaders in war crimes, referencing Hamas’s attacks on Israel on October 7 and Israel’s subsequent blockade of aid to Gazans. The issuance of the warrants depends on the approval of the ICC’s judges.

— Chinese President Xi Jinping and Russian President Vladimir Putin are set to meet again in July in Kazakhstan, marking their second meeting in two months. This announcement was made during a meeting between Russian Foreign Minister Sergey Lavrov and Chinese Foreign Minister Wang Yi on the sidelines of the Shanghai Cooperation Organization (SCO) meeting. The leaders plan to discuss expanding political, economic, and military ties amidst growing Western pressure. Lavrov highlighted an intensive schedule of contacts, noting an upcoming session with BRICS foreign ministers in Russia. The SCO, founded by China, Russia, and Central Asian states, now includes India, Pakistan, and Iran. Wang Yi emphasized the need for China and Russia to support each other and maintain regional stability.

— Ukrainian crops largely unaffected by recent frosts, unlike Russia, officials say. The Ukrainian state weather agriculture department reported that recent frosts in eastern, northern, and central Ukraine have not caused significant damage to grain and oilseed crops. Tetiana Adamenko, speaking to Reuters, mentioned that while there is localized damage to early seedlings of corn and sunflower, wheat and other cereals, which are frost-tolerant, were largely unaffected. She explained that temperatures would need to drop below 9 degrees Celsius (48.2 F) to cause significant plant death, which has not occurred. This contrasts with Russia, where frosts have caused substantial damage. Despite a warning from APK-Inform consultancy about potential yield losses of 20% to 30% for wheat, barley, rapeseed, and pea crops due to severe frosts, the situation in Ukraine remains relatively better.

— IKAR further cuts Russian wheat production, export forecasts. IKAR cut its forecast for Russia’s wheat crop another 2.5 MMT to 83.5 MMT after a “more exact assessment of frost damage and dryness across the south.” Total grain production is now forecast at 132 MMT, down 3 MMT from its prior outlook. The ag consultancy lowered its 2024-25 Russian wheat export projection by 2 MMT to 45 MMT. Total grain exports are now forecast at 57 MMT, down 2.5 MMT.

— McGovern as expected opposes House GOP nutrition proposals in farm bill. Rep. Jim McGovern (D-Mass.), a member of the House Ag Committee, is vocally opposing the nutrition proposals put forth by House Ag Chair GT Thompson (R-Pa.) in the recently released farm bill. In a letter to his House colleagues on Monday, McGovern described the new farm bill text as “even worse” for the Supplemental Nutrition Assistance Program (SNAP) than anticipated.

McGovern criticized the proposed repeal of the SNAP felon ban, arguing that it should not come “at the expense” of future Thrifty Food Plan (TFP) updates. The TFP is considered by Democrats to be a crucial mechanism for increasing SNAP benefits over time, and many Democrats strongly oppose any future limitations on these updates.

GOP response: Republicans argue that Thompson’s bill will not cut any current SNAP benefits. Instead, they emphasize that billions of dollars will be reinvested into existing nutrition programs under the proposed legislation.

— Vilsack allocates RAPP funds amid House Ag farm bill markup. USDA Secretary Tom Vilsack announced the allocation of $300 million to 66 U.S. organizations under the new Regional Agricultural Promotion Program (RAPP). This initiative, created using the Commodity Credit Corporation (CCC) funds, aims to help U.S. exporters expand their markets beyond traditional ones, focusing on regions with growing consumer demand and purchasing power such as Africa, Latin America, the Caribbean, and South and Southeast Asia.

Background. Launched in October 2023 with $1.2 billion in CCC funding, RAPP was established at the request of Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) and Sen. John Boozman (R-Ark.). It seeks to promote U.S. agricultural exports to new and dynamic markets. The program targets regions like Africa, Latin America, the Caribbean, and South and Southeast Asia to tap into increasing consumer demand and purchasing power.

Specific allocations:

• The Cranberry Institute will focus on export opportunities in India, Brazil, Colombia, and Southeast Asia.
• The Southern Forest Products Association will promote Southern yellow pine products in the Caribbean.
• The Hazelnut Marketing Board will conduct market research and trade missions in African countries.
• The U.S. Dairy Export Council will expand its presence in Africa, focusing on dairy import regulations.
• The U.S. Meat Export Federation will enhance its export efforts in the ASEAN region and Africa and invest in the convenience store segment in South Korea, Central America, and Colombia.
• The Brewers Association will engage with the craft beer market in Southeast Asia and participate in trade shows and festivals.

Responding to questions about the use of the CCC and a proposal by House Ag Chairman Glenn GT Thompson (R-Pa.) to suspend Section 5 of the CCC Charter Act, Vilsack defended the flexibility provided by the CCC. He highlighted that the CCC, crafted during the New Deal, is essential for responding to agricultural needs and noted that while the Trump administration used the entire CCC account for tariff-related payments, the Biden administration has been more judicious with its use.

— Martin Gruenberg will step down as head of the Federal Deposit Insurance Corp. (FDIC) following findings of a toxic work environment that placed the regulator at the center of a political controversy and led to calls for his removal. Gruenberg, 71, faced increasing pressure after a report by law firm Cleary Gottlieb Steen & Hamilton detailed harassment and discrimination at the FDIC during his tenure. The report, based on accounts from over 500 individuals, highlighted a “sexualized, boys’ club environment” for female bank examiners.

In his statement, Gruenberg announced his intention to step down once a successor is confirmed. The White House plans to nominate a replacement swiftly and thanked Gruenberg for staying on until then to maintain a majority of Democratic appointees on the FDIC board, ensuring the administration’s regulatory agenda remains on track through the election.

Political pressure on Gruenberg intensified after two congressional hearings and a key Democrat, Senate Banking Committee Chairman Sherrod Brown (D-Ohio), called for new FDIC leadership to ensure fundamental changes. Despite Gruenberg’s commitment to addressing the agency’s issues and multiple apologies to employees, the report questioned his suitability to lead the necessary cultural overhaul.

The report did not find Gruenberg personally guilty of harassment or discrimination but cited instances of him losing his temper with staff. The findings led to calls from House Majority Whip Thomas Emmer for Gruenberg to step down immediately, suggesting other capable individuals could better manage the FDIC.

Of note: Gruenberg’s departure could significantly impact the Biden administration’s regulatory agenda. If he leaves without a confirmed replacement, the FDIC board would be evenly split between Democrats and Republicans, with Republican Vice Chairman Travis Hill potentially leading the regulator temporarily. This shift could affect plans requiring big banks to hold more capital, which Wall Street firms and some Republicans oppose.

— China condemns Blinken over Taiwan, sanctions ex-U.S. lawmaker. China criticized U.S. Secretary of State Antony Blinken for congratulating Taiwan’s new president and sanctioned former U.S. Congressman Mike Gallagher for his support of Taiwan. Beijing’s response highlights the ongoing tension between China and the U.S. over Taiwan’s status.

Blinken congratulated Lai Ching-te on his inauguration as Taiwan’s president and expressed a desire to work with Taiwan to advance shared interests and values. This prompted a strong response from China, which accused the US of violating its commitment to maintaining only unofficial relations with Taiwan.

Chinese Foreign Ministry spokesman Wang Wenbin condemned Blinken’s comments, stating they sent a “seriously wrong signal to the Taiwan separatist forces.” China filed a diplomatic complaint and urged the U.S. to correct its stance.

Meanwhile, China announced sanctions on Mike Gallagher, who had led a delegation to Taiwan and advocated for arming the island against Chinese military threats. Beijing accused him of interfering in China’s internal affairs and harming its sovereignty.

— China to offer nationwide crop insurance for staple grains. China will offer nationwide full-cost, planting income insurance policies for rice, wheat and corn. The policies are aimed at improving crop insurance protection, stabilizing farmers’ income, supporting the revitalization of rural areas and better safeguarding food security, according to a notice jointly released by the ministries of finance and agriculture and the State Administration of Financial Supervision.

— Trump’s proposed tariffs and tax cuts to burden America’s poorest with $500 billion annual cost, study finds. Donald Trump’s proposed economic policies, which include imposing a 10% levy on all U.S. imports and a 60% tax on goods from China, are expected to disproportionately impact America’s poorest households. According to economists from the Peterson Institute, these tariffs would create a $500 billion annual burden. The tariffs are intended to fund an extension of tax cuts initially introduced by Trump in 2017, beyond their current expiration in 2025. The think-tank’s research suggests that these policies would shift tax burdens from wealthier Americans to lower-income individuals, calling them “sharply regressive tax policy changes.”

The study by Kim Clausing and Mary Lovely estimates that the combined cost of existing tariffs and Trump’s new plans would amount to 1.8% of GDP. This figure does not account for potential retaliatory actions from trading partners or other negative side effects, such as reduced competitiveness. The new tariffs are projected to cost consumers an additional $500 billion per year, nearly five times the costs incurred from Trump’s previous tariff actions by late 2019. Middle-income households could see an average yearly hit of $1,700, while the poorest 50% of households might experience a 3.5% reduction in disposable income.

Trade tariffs, particularly those targeting Beijing, were a key element of Trump’s first term economic policies and remain unchanged under President Joe Biden, who is also Trump’s rival in the 2024 election. Recently, Biden introduced additional tariffs on Chinese green-tech exports, including a 100% levy on Chinese electric vehicles, citing concerns over Beijing’s manufacturing subsidies potentially creating a global supply glut that could harm U.S. businesses.

Biden has explicitly stated his opposition to the broad use of tariffs.

Meanwhile, some economists are increasingly concerned about the cost of extending elements of Trump’s Tax and Jobs Act, set to expire in 2025. The Congressional Budget Office (CBO) estimates that extending all provisions would cost nearly $5 trillion over the next decade, including the rise in interest payments. Arthur Laffer, an economic adviser to Trump, claimed that the 2017 tax cuts paid for themselves through stronger growth and higher tax revenues, a statement contradicted by the CBO’s findings.

Trump’s team has suggested that the second round of tariffs could help cover the fiscal gap left by extending the tax cuts. However, the Peterson Institute paper argues that revenue from the levies would likely amount to only $2.75 trillion, falling short of what is needed to fund the tax cut extensions. The paper highlights that, even without considering growth effects and other economic factors, tariff revenues would be insufficient to fully cover the costs of extending the Tax and Jobs Act provisions.

— The Commodity Futures Trading Commission (CFTC) is set to issue final guidance on carbon credits within the next six months, potentially as early as September, according to Commissioner Christy Goldsmith. This guidance is essential for ensuring the integrity of carbon credits traded on regulated markets. Currently, most carbon credits are traded over the counter, but there is a push for more regulatory oversight to prevent “greenwashing.” The CFTC released draft guidance in December and is now reviewing feedback. Companies are eagerly awaiting the final rule to establish clear standards and avoid issues with investors and regulators. Carbon markets have been struggling, with credit values declining significantly over the past two years.

— Dental insurance comes to ObamaCare. The Affordable Care Act (ACA/ObamaCare), which extended health insurance to millions of Americans, did not initially include dental coverage for adults. However, in a recent move with little public attention, the Biden administration finalized a rule allowing states the option to add adult dental insurance to their ACA plans. States have until 2025 to decide whether to mandate dental benefits for adults under this new rule.

— Hims & Hers offers cheaper versions of weight-loss drugs. Telehealth company Hims & Hers Health is now offering weight-loss injections at a significantly reduced cost of $199 per month. This is a substantial discount compared to the $1,000 monthly cost for Novo Nordisk’s Ozempic and Eli Lilly’s Zepbound. The announcement led to a 28% increase in the company’s shares on Monday as it seeks to compete in a booming market. CEO Andrew Dudum stated that the company has utilized its size and scale to secure high-quality supplies of compounded GLP-1 injections, aiming to alleviate the current shortage. The company’s version of GLP-1 drugs for obesity treatment is priced at one-seventh of Novo’s Wegovy, which lists at $1,349.02 per month.

Of note: Hims & Hers, which began offering oral medication kits for weight loss late last year, claims that its compounded version includes the same active ingredient found in Ozempic and Wegovy. While the FDA does not review compounded drugs for efficacy or safety, it permits their production if there is a shortage of FDA-approved versions. However, the FDA has indicated that some compounders might use different active ingredients than those in the approved drugs.

— Top House Ag Committee Democrat, Rep. David Scott, faces challenge in today’s Georgia primary election. If he doesn’t win more than 50% of the vote, he’ll face a June runoff. The most recent round of redistricting removed nearly all the rural areas from his new district, which now mainly encompasses Atlanta’s eastern exurbs.

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