New Farm Bill Odds Plunging as Chaos in House and Issues in Senate Stymie Outlook

Biden admin. building wall on southern border | USDA asked to survey Hawaii fire impacts

Jim Wiesemeyer

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October 05, 2023 09:27 AM

Biden admin. building wall on southern border | USDA asked to survey Hawaii fire impacts

Today’s Digital Newspaper

MARKET FOCUS

Downward revisions in monthly jobs report dishearten Wall Street traders
ADP private payrolls rise by 89,000 in September, falling short of expectations
EU borrowing costs to remain elevated
Reasons for dramatic rise in Treasury yields
SCOTUS foreign income tax case sparks concerns for U.S. tax code
KC Fed economist: softening farmland values amid strong demand, limited supply
Oil prices volatile
Ag markets today
Argentina’s soy crushers face crisis as drought halves soybean crop
USDA seeks emergency clearance for Hawaiian fire damage survey
Rice inflation in the Philippines soared to a 14-year high last month
Ag trade update
NWS weather outlook
Pro Farmer First Thing Today items

RUSSIA & UKRAINE

Russia may ease ban on diesel exports soon
U.S. sends 1.1 million seized ammunition rounds from Iran to Ukraine
U.K. warns of Russian mines in Black Sea, raises concerns for commercial shipping
Ukraine likely to reduce 2024 winter wheat planting amidst drought concerns
Ukraine pauses WTO complaints against Poland, Hungary, and Slovakia

POLICY

Can the House even clear a farm bill extension if needed?
Voice votes can lead to farm policy problems

PERSONNEL

Deputy Interior Secretary Beaudreau to step down

CHINA

Soybeans, corn, sorghum and upland cotton key sales to China in most recent week
Raimondo: Reports of chip breakthrough by Huawei ‘incredibly disturbing’
IMF likely overestimating China’s economic growth prospects: U.S. analyst
China’s pledged reduction in global coal supply chains faces delays

ENERGY & CLIMATE CHANGE

U.S. to hold Gulf of Mexico offshore drilling rights auction on Nov. 8

LIVESTOCK & FOOD INDUSTRY

Mexico confirms H5N1 avian influenza in wild bird; no outbreak in commercial poultry
Weight-loss drugs like Ozempic raise questions for big food companies and investors
EPA advances plan to revise effluent standards for meat and poultry products
Missouri AG urges Tyson Foods to sell poultry processing facilities facing closure

CONGRESS

House Republicans enter Speaker race amid ongoing uncertainty
House GOP moderates call for change to rule that allowed for McCarthy’s removal
Congress preaches spending cuts while allowing its own budget to explode by 38%

OTHER ITEMS OF NOTE

Pakistan orders undocumented migrants, including 1.7 million Afghans, to leave
Biden administration waives 26 federal laws for border barrier construction in Texas
Today’s calendar of events

MARKET FOCUS

— Equities today: Asian and European stocks were mixed overnight. U.S. Dow opened around 40 points lower. In Asia, Japan +1.8%. Hong Kong +0.1%. China closed. India +0.6%. In Europe, at midday, London +0.5%. Paris +0.1%. Frankfurt +0.1%.

U.S. equities yesterday: All three major indices ended with gains after a session where the Dow and S&P traded both sides of unchanged. The Dow closed up 127.17 points, 0.39%, at 33,129.55. The Nasdaq gained 176.54 points, 1.35%, at 13,236.01. The S&P 500 rose 34.30 points, 0.81%, at 4,263.71.

— ADP private payrolls rise by 89,000 in September, falling short of expectations. ADP’s latest report reveals that private payrolls in September increased by only 89,000, a figure considerably lower than the 160,000 expected by economists. This unexpected slowdown in job growth has sparked hope among investors that the historically tight labor market may be showing signs of loosening. If this trend continues, it could potentially provide the Federal Reserve with a reason to halt its interest rate hikes. However, it’s important to note that ADP’s data can significantly differ from the official government numbers, which are set to be released on Friday. As a result, the relief from these figures may prove to be short-lived, pending the more comprehensive government report.

The ADP report comes after JOLTS data released Tuesday registered a surprising surge in job openings, prompting market concerns that Fed officials’ warning of keeping rates higher longer is rising as a likelihood.

— Agriculture markets yesterday:

Corn: December corn fell 1 1/2 cents to $4.86, a mid-range close.
Soy complex: November soybeans rose 1/4 cent to $12.73 and nearer the session low. December soybean meal rose $0.30 to $372.00 and nearer the session low. December bean oil lost 114 points at 55.99 cents and nearer the session low.
Wheat: December SRW futures fell 8 1/2 cents before settling at $5.60, near mid-range. December HRW futures fell 16 3/4 cents and closed at $6.66 1/2. December spring wheat futures fell 13 3/4 cents to $7.11 3/4.
Cotton: December cotton fell 42 points to 87.01 cents, ending below the 10- and 20-day moving averages.
Cattle: Futures rebounded from early follow-through losses Wednesday, with the October and December contracts rising 7.5 cents and 37.5 cents to $182.20 and $186.025, respectively.
Hogs: December lean hog futures rallied 10 cents on the session to $69.175, while nearby October futures fell 5 cents to $79.925.

— Ag markets today: Corn and soybeans faced fresh selling pressure during overnight trade, while wheat firmed amid light corrective buying. As of 7:30 a.m. ET, corn futures were trading mostly 2 cents lower, soybeans were mostly 9 cents lower, SRW wheat was 2 to 3 cents higher, while HRW and HRS wheat were 5 to 6 cents higher. Front-month crude oil futures were around $1.50 lower, and the U.S. dollar index was down more than 100 points.

Cash cattle trade lower. The sharp break in futures the first two days this week combined with packers having access to fresh contract supplies caused some feedlots to sell cattle in the negotiated market at lower prices and earlier than expected. Initial cash cattle trade occurred at mostly $1 lower prices, with activity reported at those levels in both the Southern Plains and northern market.

Cash hog decline slowing, pork cutout modestly firms. The CME lean hog index is down another 28 cents to $84.28, though that’s the smallest decline in the past week. The pork cutout value firmed 3 cents on Wednesday, halting the sharp decline the past two days. While cash fundamentals continue to weaken, traders will watch to see if prices may be stabilizing.

— Quotes of note:

EU borrowing costs to remain elevated. European Central Bank President Christine Lagarde reiterated that borrowing costs will remain elevated for some time to contain inflation. Future ECB decisions “will ensure that the interest rates will be set at sufficiently restrictive levels for as long as necessary,” Lagarde said Wednesday at a conference in Frankfurt.
Reasons for dramatic rise in Treasury yields. The scale and upward trajectory of U.S. borrowing and absence of any political corrective now threaten markets and the economy in ways they haven’t for at least a generation. That’s the takeaway from the sudden sharp rise in Treasury yields in recent weeks, writes Greg Ip of the Wall Street Journal (link).
“Overall, the industry is running on fumes.” — Economist Beau Whitney, on the difficulty in setting up a legal cannabis production and distribution business.
Disturbing. U.S. Commerce Secretary Gina Raimondo said reports of a chip breakthrough by Huawei are “incredibly disturbing” and emphasized that her department needs more ways to enforce its export-control regime. Link for details.
“They’re overdoing it a little bit.” — Travis Kelce on the NFL, its TV partners and commentators’ recent attention to celebrities who attend the games, notably including Taylor Swift. (For those counting, the latest Swift-attended game had 17 cutaways.)

— Downward revisions in monthly jobs report dishearten Wall Street traders. Wall Street traders are growing cautious in their reliance on the federal government’s monthly jobs report, as it has seen a continuous streak of downward revisions this year, the Wall Street Journal reports (link). The Employment report is a significant economic release closely monitored by the financial industry, as it provides insights into the Federal Reserve’s interest-rate policy. What sets this year apart is that, for the first time on record, each monthly release through July has resulted in negative revisions, discouraging some traders. These downward revisions are adding complexity to Wall Street’s narrative, which suggests that the economy’s robustness may lead to higher interest rates persisting for longer than initially anticipated.

— Supreme Court foreign income tax case sparks concerns of far-reaching implications for U.S. tax code. Tax professionals from various political backgrounds are raising alarm bells regarding a foreign income tax case scheduled for the Supreme Court’s fall docket.

The case, Moore v. U.S., revolves around the “transition tax” on unrealized foreign earnings brought back to the United States, a provision introduced in the 2017 Republican tax overhaul.

Concerns are growing among former GOP staffers, lawmakers, practitioners, and the Joint Committee on Taxation that the Supreme Court’s ruling could have broad-ranging effects on the tax code. Many worry that the difficulty of constraining the ruling’s scope may lead to more lawsuits challenging other sections of the tax code and potentially reshape Congress’ ability to amend the code and raise revenue.

The Moores argue that taxing unrealized gains violates the Commerce Clause of the U.S. Constitution. (Unrealized gains are essentially “on paper” profits because the investment hasn’t been sold.)

Bottom line: If the Supreme Court rules in the Moores’ favor, the Institute on Taxation and Economic Policy (ITEP) says it could mean windfalls for large corporations such as Apple and Microsoft, with potential tax relief of $37 billion and $18 billion, respectively.

— Kansas City Fed economist notes softening farmland values amid strong demand and limited supply. While farmland values remain robust, some agricultural bankers in the central Plains are reporting a downturn in prices after three years of rising values, according to senior economist Cortney Cowley of the Kansas City Federal Reserve. However, the majority of bankers anticipate that farmland values will remain stable or see moderate increases. Cowley made his comments during a University of Missouri webinar.

Cowley highlighted that farm profit margins are expected to be narrower this year due to lower commodity prices and higher expenses. Despite elevated costs, corn and soybean producers still have solid profit opportunities, with futures prices exceeding average production costs. Wheat and cattle are also in a similar situation, although hog farmers may face potential losses.

Despite uncertainties in the U.S. economy and higher interest rates, stable to rising land values and land rental rates indicate the sector’s overall strength, Cowley noted. Cropland values have surged by 33% since 2020, reaching a national average of $5,460 per acre this year, as reported by the USDA.

Cowley also mentioned that ag lenders are increasingly reporting declines in farm real estate values, though this is not the prevailing sentiment among farm bankers surveyed by the Kansas City Fed. The district served by the regional Fed includes states such as Kansas, Nebraska, Oklahoma, Wyoming, Colorado, western Missouri, and northern New Mexico. In August, the Kansas City Fed noted that farmland values were higher than expected given the current interest rate environment and income prospects from the land. Some moderation in farmland values was anticipated due to downward pressures, particularly on less productive tracts. However, a steady supply of land sales and strong demand from farmers have likely contributed to the resilience of real estate values.

Cowley also highlighted the limited supply of farmland available and the strong demand, particularly among farmers. Farm income has been consistently above average since 2021, and growers continue to have substantial financial resources. For high-quality farmland, demand remains robust despite signs of softening in some areas.

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 was weaker, around 4.73%, with a mixed tone in global government bond yields. Crude oil futures shifted lower ahead of U.S. trading, with U.S. crude around $83.50 per barrel and Brent around $85.20 per barrel. Gold and silver futures were slightly higher ahead of US economic reports, with gold around $1,836 per troy ounce and silver around $21.21 per troy ounce.

— Oil prices experienced a modest uptick in morning trading in Asia, recovering slightly from a steep one-day drop of over 5% on Wednesday, marking the sharpest decline in more than a year. The international benchmark, Brent crude, saw a 0.2% increase, reaching $86.02 per barrel. The dramatic fall on Wednesday was prompted by worries about a slowdown in demand, wiping out the gains made since Saudi Arabia and Russia had extended output cuts in September.

— Argentina’s soy crushers face crisis as drought halves soybean crop. Argentina’s soybean processing industry is grappling with a looming crisis as a historic drought has severely reduced the soybean crop. Reuters cites the head of the country’s grains export chamber, CIARA-CEC, saying Argentina’s soybean processing plants are running low on soybeans, leaving more than two-thirds of their capacity idle. It’s estimated that only 3 million metric tons (MMT) of soybeans will remain for crushers to process by the end of the month. The drought has already caused a 27% drop in soybean crush volume to 19.6 MMT in the first eight months of the year, despite significant soybean imports from neighboring countries.

Additionally, the head of CIARA-CEC expressed doubts about any official wheat sales for the 2023-24 harvest in the coming months. This uncertainty arises because export contracts from 2022-23 are still being fulfilled, as the government allowed exporters to defer them due to the drought’s impact on the industry.

— USDA seeks emergency clearance for Hawaiian fire damage survey. USDA’s National Agricultural Statistics Service (NASS) is urgently requesting clearance and review from the Office of Management and Budget (OMB) to conduct a special survey. This survey aims to assess the damage caused by wildfires and high winds in La Haina, Hawaii, in August. While some farms suffered physical damage, NASS highlights that many others were adversely affected by the loss of markets and agritourism income. The Hawaii Department of Agriculture (HDOA) has enlisted NASS to conduct this disaster survey, which will account for various losses, including crops, livestock, sales, equipment, infrastructure, and more. The voluntary survey’s objective is to quantify economic losses, damages on an acreage and livestock basis, impacts on agricultural infrastructure, and the well-being of agricultural workers. Comments on the Hawaii Agricultural Disaster Survey will be accepted until Oct. 10, and NASS has requested that OMB decide within five days after the comment period concludes.

— Rice inflation in the Philippines soared to a 14-year high last month, indicating limited impact from President Ferdinand Marcos Jr.’s price cap. Price gains quickened to 17.9% year-on-year from 8.7% in August, pushing overall inflation beyond economist expectations. Link to details via Bloomberg.

— Ag trade update: South Korea purchased 198,000 MT of corn, with one cargo expected to be sourced from Romania, another from South America and the other from either South America or South Africa. Japan purchased 91,234 MT of milling wheat in its weekly tender, including 23,987 MT U.S., 32,974 MT Canadian and 34,273 MT Australian.

— NWS weather outlook: There is a Marginal Risk of excessive rainfall over parts of the Western/Central Gulf Coast on Thursday and the Northeast on Friday... ...There is a Freeze Watch over parts of the Northern Plains overnight Thursday... ...Temperatures will be 15 to 25 degrees above average over parts of the Northeast.

Items in Pro Farmer’s First Thing Today include:

• Corn and soybeans weaker, wheat firms overnight
• Argentina’s soy crushers face ‘disaster’
• Coceral cuts EU wheat crop estimate

RUSSIA/UKRAINE

— Russia may ease ban on diesel exports soon. The Russian government is ready to ease a ban on diesel exports in coming days, the daily Kommersant reported, citing unnamed sources, while Deputy Prime Minister Alexander Novak said the restrictions were working. Despite being one of the world’s top oil producers, Russia has suffered high domestic prices and shortages of gasoline and diesel in recent months as high export prices made it advantageous for refiners to sell their products abroad.

Kommersant reported the ban would be lifted only on pipeline exports of diesel, and that volumes may be subject to quotas to avoid surges in wholesale prices. The ban on gasoline exports will remain in force for now, it said.

— U.S. sends 1.1 million seized ammunition rounds from Iran to Ukraine. The United States delivered over 1.1 million ammunition rounds, previously seized from Iran’s Islamic Revolutionary Guard Corps, to Ukraine’s army. These rounds had been confiscated by American naval forces in December, suspected of being intended for Iran-aligned Houthi rebels in Yemen, a violation of a U.N. Security Council resolution. The U.S. officially assumed ownership of the ammunition in July.

— U.K. warns of Russian mines in Black Sea, raises concerns for commercial shipping. The British government has issued a warning about the potential use of mines by Russia in the Black Sea, including near the entrances to Ukrainian ports, with the intention of targeting commercial shipping. According to reports by Reuters, the UK’s Foreign Office has expressed concerns that Russia may opt for covert actions, such as laying mines, rather than openly sinking civilian ships. The statement emphasizes that Russia might attempt to falsely attribute any attacks on civilian vessels in the Black Sea to Ukraine. In releasing this assessment of intelligence, the U.K. aims to expose Russia’s tactics and deter such incidents from occurring in the region.

— Ukraine likely to reduce 2024 winter wheat planting amidst drought concerns. Ukraine’s Agriculture Minister, Mykola Solsky, indicated that the country is expected to plan a smaller area for winter wheat cultivation in 2024 than initially projected due to widespread drought conditions. Solsky emphasized that the dry and sunny weather is acting as a hindrance to the sowing season. Although the specific reduction figures were not provided, the Agriculture Ministry had previously announced plans to plant 4.4 million hectares (approximately 10.87 million acres) of winter wheat. As of this week, Ukrainian farmers have sown nearly 3 million hectares of winter crops, including 1.7 million hectares designated for winter wheat.

— Ukraine pauses WTO complaints against Poland, Hungary, and Slovakia over agricultural imports dispute. Ukrainian trade officials have decided to temporarily suspend their World Trade Organization (WTO) complaints against Poland, Hungary, and Slovakia, who had previously blocked imports of Ukrainian agricultural products. According to reports by Interfax-Ukraine, Ukraine is actively seeking a resolution to this issue and aims to achieve a “constructive” solution with all European Union (EU) countries involved in the dispute.

POLICY UPDATE

— Can the House even clear a farm bill extension if needed? Not in the current environment, say several observers. House Ag Chairman G.T. Thompson (R-Pa.) said Tuesday night that he was unsure a farm bill extension, if needed, could make it through a distracted and divided House. “The agitators and the Democrats rule the day. In a mutual way, they’ve really blown up any meaningful legislation. I don’t know how you get a speaker with that coalition. Without a speaker, you can’t do anything,” Thompson said, adding that it could lead to multiple time-consuming rounds of votes for a new speaker. Senate Ag member Chuck Grassley (R-Iowa) said even before the House move against McCarthy that he was worried about a farm bill not being ready in December. “I have my doubts that we’re going to get a five-year farm bill [this year] and we’re going to have a one-year, two-year extension. The farmers will have their usual safety nets,” Grassley said on his weekly call with reporters Tuesday.

Of note: Grassley also said work on the Senate draft bill was moving slowly amid a disagreement on the Senate Agriculture Committee about reprogramming funds to provide increases in some farm programs. Senate Ag Chairman Debbie Stabenow (D-Mich.) said that “we are diligently working on the farm bill. I’ve been involved in six of them. None of them, unfortunately, have ever hit the exact deadline.”

— Voice votes can lead to farm policy problems. Roll Call notes the following: House Ag Chairman G.T. Thompson (R-Pa.) “had to maneuver to protect the farm bill from potential encroachment by amendments to the fiscal year (FY) 2024 House Ag Appropriations bill on Sept. 28. After the House adopted by voice vote an amendment by Rep. Victoria Spartz (R-Ind.) that would prohibit USDA from administering checkoff programs funded by farmer assessments, Thompson requested a roll call vote, and the amendment was rejected.”

Thompson also worked to keep other amendments from being offered such as one by Rep. Scott Perry (R-Pa.) that would bar USDA from using funds to provide non-recourse loans for raw cane sugar or refined beet sugar. The House rejected the spending bill, 191-237, with 27 Republicans voting against it.

PERSONNEL

— Deputy Interior Secretary Tommy Beaudreau to step down, leaving key energy and conservation role vacant. Beaudreau is set to resign from his position at the end of the month, leaving a crucial role in the Biden administration overseeing decisions on oil, energy, and conservation open. During his two-year tenure, Beaudreau oversaw the approval of the Willow Alaskan oil project and played a key role in negotiating a deal to safeguard the Colorado River’s water supply. His responsibilities also encompassed efforts to reform mining rules, enhance conservation measures, and accelerate the expansion of renewable energy and transmission on federal lands. Beaudreau cited the need to spend more time with his family as the reason for his departure.

CHINA UPDATE

— Soybeans, corn, sorghum and upland cotton key sales to China in most recent week. U.S. Export Sales data for the week ended Sept. 28 continued to show sales to China of several U.S. agricultural commodities, including activity for 2023-24 of net sales of 1,964 metric tons of wheat, 139,356 metric tons of corn, 204,602 metric tons of sorghum, 589,216 metric tons of soybeans, and 126,169 running bales of upland cotton. For 2023, net sales of 1,634 metric tons of beef and 9,449 metric tons of pork were reported.

— IMF likely overestimating China’s economic growth prospects: U.S. analyst. Questionable data supplied by Beijing to the International Monetary Fund leads to an inaccurate and inflated projection, according to research group founder. Link to more via the South China Morning Post.

— China’s pledged reduction in global coal supply chains faces delays amid economic and geopolitical considerations. China’s commitment to scaling back its involvement in global coal supply chains may encounter delays, as the country continues to pursue coal-related projects in various regions, the Wall Street Journal reports (link). This includes reviving plans for a coal plant in Gwadar, Pakistan, a city central to China’s economic corridor development efforts. Additionally, China is moving forward with coal-fired power plant projects in Indonesia, intended to provide energy for nickel processing, a key component in electric car batteries. While climate activists initially welcomed China’s commitment to cease building new coal plants overseas, questions have arisen regarding the nation’s adherence to its pledge. Geopolitical realities and China’s growth aspirations are complicating efforts to transition away from coal. China’s plans for Gwadar aim to establish it as a vital hub in an economic corridor, providing access to strategic shipping routes near the Persian Gulf.

ENERGY & CLIMATE CHANGE

— U.S. to hold Gulf of Mexico offshore drilling rights auction on Nov. 8, the last such sale until at least 2025. The Biden administration has announced plans to conduct an offshore drilling rights auction across the Gulf of Mexico on Nov. 8, 2023. This auction, initially scheduled for Sept. 27, is the final opportunity of its kind until at least 2025, as mandated by last year’s climate law. The decision to hold the auction follows federal court rulings that require additional acreage to be made available for drilling. Approximately 72.7 million acres of offshore territory will be open for bidding, as per the court’s directive, according to the Interior Department’s Bureau of Ocean Energy Management. Additionally, the bureau has removed planned lease stipulations that aimed to limit vessel traffic due to potential impacts on the endangered Rice’s whale. The auction is part of the Interior’s newly released five-year leasing plan.

LIVESTOCK, FOOD & BEVERAGE INDUSTRY

— Mexico confirms H5N1 avian influenza in wild bird, but no outbreak in commercial poultry reported. Mexico has detected the first case of H5N1 avian influenza in a wild bird, specifically a “clinically healthy” migratory duck in Jalisco state, as reported by the Mexican animal safety agency, Senasica.

Of note: This case does not indicate the occurrence of a highly pathogenic avian influenza (HPAI) outbreak. The announcement coincides with the Mexican government’s official statement that the country has been declared H5N1 free following the initiation of a vaccination campaign in high-risk areas. Senasica has clarified that the presence of H5N1 in a wild bird does not contradict the government’s declaration of being H5N1 free, and no cases have been identified in commercial poultry as of now.

— Weight-loss drugs like Ozempic raise questions for big food companies and investors. The emergence of weight-loss drugs like Ozempic has garnered the attention of major food companies and investors, sparking inquiries about potential shifts in consumer eating habits, the Wall Street Journal reports (link). According to a Morgan Stanley estimate based on a survey of over 300 patients, individuals using such drugs could reduce their daily calorie intake by up to 30%. For someone following a 2,000-calorie diet, this reduction could equate to eliminating items like a bag of salted potato chips and a bottle of soda each day.

Food companies may adapt. While Conagra CEO Sean Connolly believes that a significant decline in calorie consumption due to these drugs is a distant prospect, he acknowledges that food companies might adapt if these medications gain popularity. One potential response could be the introduction of new products, including smaller packaging sizes. Connolly also noted that snacking is one of the most profitable and fastest-growing sectors in the food industry, emphasizing that it may not necessarily be viewed as negative news by food companies.

Meanwhile, Walmart shoppers seem to be buying less food as the use of drugs for weight loss ramps up. Walmart U.S. CEO John Furner said there is “a slight pullback in overall basket” in terms of items bought and the calories in them, although it’s too early to tell how much impact the drugs will have. Walmart is tracking sales patterns using anonymized shopper data to look at the purchasing changes among those taking GLP-1 agonists and those who aren’t. Walmart isn’t alone in tracking the impact of such drugs.

Of note: Nearly 7% of the population is projected to be on weight-loss drugs in 2035. The market is huge. About 42% of American adults are obese and analysts at Jefferies, the investment bank, estimate the new generation of weight-loss drugs has the potential to grow into a $100 billion market.

— EPA advances plan to revise effluent standards for meat and poultry products. The Environmental Protection Agency (EPA) has taken steps to revise the existing Meat and Poultry Products (MPP) Effluent Guidelines and Standards (ELGs) to address nutrient discharge. These standards, last updated in 2004, currently apply to only a subset of facilities nationwide and do not encompass all regulated facilities. EPA has forwarded a proposed rule to the Office of Management and Budget (OMB) for review. The agency anticipates the release of a proposed rule in December, with a final rule expected in August 2025. The revision aims to broaden the scope and effectiveness of effluent standards for meat and poultry processing facilities.

— Missouri AG urges Tyson Foods to sell poultry processing facilities facing closure. Missouri Attorney General Andrew Bailey has penned a letter to Donnie King, CEO of Tyson Foods, requesting that the meat company consider selling two poultry processing plants in the state that are slated for closure soon. Tyson announced plans in August to shut down these facilities, located in Noel and Dexter, Missouri, as part of a broader closure plan affecting two other plants in North Little Rock, Arkansas, and Corydon, Indiana. Link to details.

Bailey emphasized the significance of these plants to their respective local communities, citing their historical ties and the potential economic devastation that would result from their closure. He expressed concerns about the ripple effects on the local economy, including the impact on restaurants, grocery stores, chicken farmers, and grain growers. Bailey urged Tyson and its CEO to either keep the facilities open or sell them to any interested party.

Dexter city officials estimated that the closure would affect at least 863 jobs, with Tyson planning to cease operations at the Dexter facility on Oct. 13. U.S. Sen. Josh Hawley (R-Mo.) had previously engaged with Donnie King on the matter, sharing King’s commitments to sell the facilities and assist farmers in transitioning to new contracts with Tyson or other companies.

CONGRESS

— House Republicans enter Speaker race amid ongoing uncertainty. Following the unexpected removal of Rep. Kevin McCarthy (R-Calif.) as Speaker of the House, and the temporary appointment of Rep. Patrick McHenry (R-N.C.) as acting Speaker, Republican lawmakers are facing challenges in selecting a successor. The House is not scheduled to reconvene until Tuesday, when formal discussions regarding potential candidates will commence, with an internal election planned for Wednesday. Notably, some House Republicans, including Judiciary Committee Chairman Jim Jordan (R-Ohio) and Majority Leader Steve Scalise (R-La.), have already expressed their interest in running for the position. Additionally, there have been discussions about alternative candidates, including former President Trump, although the likelihood of a non-member becoming Speaker is minimal.

Republican Study Committee Chairman Rep. Kevin Hern (R-Okla.) “has emerged as a possible dark horse candidate,” reports Axios (link). Hern, like Jordan and Scalise, huddled with the Texas delegation at the Capitol on Wednesday but was circumspect about a run. Hern told reporters, “People have come to me and said, ‘based on your past experiences is that something you’d be looking at doing,’ and I said, ‘well I have to go talk to people to see if that’s something members…want me to do.’” But House Foreign Affairs Committee Chair Michael McCaul (R-Texas) “said Hern made clear in the meeting he is running, saying the GOP has ‘three good candidates’ for speaker.”

The ongoing process has raised the possibility that the selection of a new Speaker may extend over several weeks, according to Rep. Garret Graves (R-La). “The conference is not going to be able to quickly coalesce,” said Graves, a McCarthy ally. “If there is a shutdown in November, that is 100% attributable to Matt Gaetz and the other 7 boneheads who forced this,” Graves said.

Of note: It didn’t take long for the general ag media to note that neither Jordan nor Scalise has been very ag policy friendly in the past, especially compared with dethroned Speaker McCarthy.

Bottom line: There is no clear alternative to McCarthy who would have the support needed to win. Also adding to the contentious environment is the pressure to reach an agreement on gov’t funding, which is set to expire on Nov. 17. With many committee meetings canceled, members and aides are questioning how they’ll avert a gov’t shutdown when there is so much uncertainty about the basic rules of House operation.

— House GOP moderates call for change to rule that allowed for McCarthy’s removal. A growing number of House Republican moderates called for a change in the rule that allowed eight members of their 221-212 majority to join with Democrats in pushing out Kevin McCarthy (R-Calif) as speaker. As he sought the speaker’s gavel in January, McCarthy agreed to a rule change that allowed any one member of the House to call for his ouster, which Rep. Matt Gaetz (R-Fla.) did on Tuesday. McCarthy ally Rep. Garrett Graves (R-La.) called the current rule structure “completely dysfunctional,” and the Republican Main Street Caucus, a group of over 70 moderates, described the current rule in a statement as “a chokehold,” adding that any speaker candidates “must explain to us how what happened on Tuesday will never happen again.”

— Congress preaches spending cuts while allowing its own budget to explode by 38% since 2014. While many lawmakers have preached for years the need for federal spending cuts, the amount of taxpayer money that Congress spends on its own operations has swelled 38% since FY 2014 from $4.3 billion to $6.9 billion this year, according to a Just the News review of Congressional Research Service (CRS) reports on annual federal budgets.

OTHER ITEMS OF NOTE

— Pakistan orders undocumented migrants, including 1.7 million Afghans, to leave amid terrorism surge. In response to a recent surge in terrorist attacks, Pakistan has issued a mandate for all undocumented migrants, including approximately 1.7 million Afghans, to vacate the country by November 1, as reported by Voice of America. Pakistani officials have threatened deportation for those failing to comply with the deadline, sparking concerns from the United Nations and human rights organizations about the fate of Afghan refugees fleeing the Taliban.

The decision comes as Pakistan grapples with escalating terrorist incidents, which officials claim are being orchestrated from militant safe havens in Afghanistan. Pakistani Interior Minister Sarfaraz Bugti cited 24 suicide bombings since January, with 14 attributed to Afghan nationals. This has raised questions about the adherence to the Taliban’s leader Hibatullah Akhundzada’s decree against cross-border attacks. However, the Taliban government in Kabul denies granting sanctuary to any groups threatening neighboring countries, including Pakistan.

— Biden administration waives 26 federal laws for border barrier construction in Texas. In a move to address the escalating influx of migrants at the southern border, the Biden administration has invoked executive power to waive 26 federal laws, which include environmental protections for endangered species and air quality, to facilitate the construction of barriers in Starr County, Texas. This decision was justified by an “immediate need” to prevent unlawful entries into the United States. The use of such sweeping executive authority echoes practices employed during the presidency of Donald Trump, as the number of migrants entering the country via the southern border has seen a significant surge in recent months.

Details: Homeland Security Secretary Alejandro Mayorkas said Wednesday that the U.S. has an “acute and immediate need” to build border wall in southern Texas, and he issued an order waiving some of the country’s most iconic environmental protection laws to speed up construction. Mayorkas identified dozens of miles of border where he plans to build barriers and roads and where he indicated that those environmental laws would be a hindrance. “There is presently an acute and immediate need to construct physical barriers and roads in the vicinity of the border of the United States in order to prevent unlawful entries into the United States in the project areas,” Mayorkas said in an official filing in the Federal Register.

Multiple U.S. officials are urging the Biden administration to take immediate and effective measures to address a growing migrant crisis that is straining state resources nationwide. Concerns have been raised by leaders such as Illinois Governor J.B. Pritzker and Chicago Mayor Brandon Johnson, who are troubled by Texas Republican Governor Greg Abbott’s decision to increase the number of buses transporting migrants to Chicago. They fear that this move could potentially double the current migrant population in Chicago, which already exceeds 17,000 individuals. Additionally, New York is grappling with the arrival of thousands of migrants, leading to overcrowded intake facilities.

The White House has faced mounting criticism from lawmakers across the country, including some of President Joe Biden’s Democratic allies, for its approach to curbing the influx of migrants at the U.S./Mexico border. The situation has prompted calls for swift and concrete action to address the challenges posed by the migrant crisis.

Former President Trump said the Biden administration is only citing the “immediate need” to build a border wall because President Biden is watching the United States be “invaded” by illegal migrants, warning that “terrorists” are “already” inside the country.

— Calendar of events today include:

Thursday, Oct. 5:

• Federal Reserve. Fed Vice Chair for Supervision Michael Barr speaks on Cyber Risk and the Banking Sector at Cleveland Fed event.

• Merger guidelines. Department of Justice and the Federal Trade Commission virtual workshop on “the 2023 Draft Merger Guidelines.”

• FAA nominee. Senate Commerce, Science and Transportation Committee hearing on the nomination of Michael Whitaker to be administrator of the Federal Aviation Administration.

• Antitrust reform. Brookings Institution discussion on antitrust reforms.

• Wildlife Services meeting. Final day of the Animal and Plant Health Inspection Service (APHIS) meeting of the National Wildlife Services (WS) Advisory Committee on pertinent WS operational, research, and program activities, to increase program effectiveness and ensure that WS remains an active participant in the protection of agriculture, property, natural resources, and human health and safety.

• Influenza virus vaccine. Food and Drug Administration virtual meeting of the Vaccines and Related Biological Products Advisory Committee to discuss the Strain Selection for the Influenza Virus Vaccines for the 2024 Southern Hemisphere Influenza Season.

• Community bank issues. Federal Deposit Insurance Corporation meeting of the FDIC Advisory Committee on Community Banking for a discussion of issues that are of interest to community banks, including examination policies and procedures, credit and lending practices, deposit insurance assessments, insurance coverage, and regulatory compliance.

• Economic sustainability. U.S. Chamber of Commerce 2023 Sustainability and Circular Economy Summit; runs through Friday.

• U.S./China report. Final day of the U.S./China Economic and Security Review Commission meeting to review and edit drafts of the 2023 Annual Report to Congress.

• China conference. Center for Strategic and International Studies eighth annual “China’s Power Conference: Up for Debate 2023.”

• North Korean human rights abuses. Center for Strategic and International Studies virtual discussion on “China and Russia’s Role in North Korea’s Human Rights Abuses.”

• Government shutdown costs. Senate Budget Committee hearing on “The Costs of a Government Shutdown.”

• Climate issues. Center for Global Development and the Malala Fund virtual discussion on “Climate Change, Education, and Gender Perspectives on Protecting Future Generations.”

• Hydrogen as truck fuel. Atlantic Council virtual discussion on “Hydrogen as a long-haul trucking solution.”

• Government debt. National Economists Club virtual luncheon discussion on “The Truth About Government Debt.”

• Global markets. Commodity Futures Trading Commission meeting of the Global Markets Advisory Committee Agenda which includes presentation from the GMAC’s Global Market Structure Subcommittee.

• Global energy. Center for Strategic and International Studies virtual discussion with Eirik Waerness, senior vice president and chief economist of Equinor, on “Equinor’s latest energy perspectives and developments across the global energy sector.”

• U.K. inflation. Brookings Institution and the Resolution Foundation virtual discussion on “Why is U.K. inflation so much higher than in the U.S., and what does that tell us about the economic outlook?”

• Economic reports. Jobless Claims | International Trade

• Energy reports. ICE gasoil October options expire | Singapore onshore oil product stockpile weekly data | EIA Natural Gas Report | Holiday: China.

• USDA reports. FAS: Export Sales

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