Odds Increase for 50-Basis-Point Cut in Interest Rates at Sept. FOMC Meeting

Abbreviated format today as I am in the Ozarks for an annual family event.

— The U.S. job market in July 2024 experienced slower-than-expected growth, with only 114,000 jobs added, significantly below forecasts. This has contributed to an increase in the unemployment rate to 4.3%, up from the previous rate of 4.1%. Key points:

• Job growth: The addition of 114,000 jobs in July fell short of the predicted 175,000 jobs. This slowdown is part of a broader trend of decelerating job growth, with the labor market showing signs of cooling after a period of rapid expansion earlier in the year.

• Unemployment rate: The unemployment rate rose to 4.3%, marking the fourth consecutive month of increase. This is the highest rate since December 2021, reflecting a more challenging environment for job seekers.

• Sector-specific trends: Job growth was concentrated in specific sectors, such as trade, transportation, and construction, while other areas saw less robust hiring. Notably, the healthcare and government sectors have been significant contributors to overall employment growth.

• Wage growth: Average hourly earnings were up 3.6% in July from a year earlier — above the recent pace of inflation, but the smallest gain since May 2021. In July, average hourly earnings for all employees on private nonfarm payrolls increased by 8 cents, or 0.2%, to $35.07. This moderation aligns with the Federal Reserve’s efforts to curb inflation, indicating that labor market conditions are stabilizing but not overheating.

• The jobs count for May and June was revised down by a combined 29,000.

• The labor-force participation rate, the share of working-age people who were employed or seeking work, rose to 62.7% from 62.6% in June. The increase in the unemployment rate was in part a reflection of more people entering the labor market.

• Economic implications: The Federal Reserve has maintained interest rates at 5.5%, with indications of potential rate cuts soon to stimulate the economy. This adds to the already high odds of a September rate cut.

The Sahm rule, a rule of thumb popularized by economist Claudia Sahm, says that if the average of the unemployment rate over three months rises a half-percentage point or more above the lowest the three-month average went over the previous year, the economy is in a recession. Over the past three months, the unemployment rate has averaged 4.13% — 0.53 percentage point above the three-month average low of 3.60% over the past year.

Fed Chair Jerome Powell characterized the Sahm rule as a “statistical regularity” on Wednesday. “It’s not like an economic rule, where it’s telling you something must happen,” he said.

Sahm herself doesn’t think the economy is on the immediate cusp of a recession, the Wall Street Journal reported. She thinks that changes in the supply of labor since the pandemic, including the recent jump in immigration, have led the Sahm rule to overstate how weak the job market is. But she worries about the direction things are heading: The unemployment rate is historically low, but it has been trending higher; the number of jobs the economy has been adding each month is still historically strong, but it has been trending down. “We are still in a good place, but until we see signs of stabilizing, of leveling out, I’m worried,” said Sahm, a former Fed economist who is now the chief economist at New Century Advisors.

— European stocks declined in response to a selloff in Asian markets, driven by fears of a potential U.S. economic downturn. Japan’s benchmark index notably dropped 5.8%, marking its second-largest single-day fall since the Black Monday crash of 1987. Markets in Australia, Hong Kong, and South Korea also registered steep declines. In Asia, Japan -5.8%. Hong Kong -2.1%. China -0.9%. India -1.1%. In Europe, at midday, London -0.3%. Paris -0.6%. Frankfurt -1.5%. Analysts attributed the selloff to recent U.S. economic data indicating higher-than-expected jobless claims and a contraction in manufacturing. U.S. Dow is now done around 460 points. Of concern: a softening jobs market and a spending pullback by consumers that threatens to crimp corporate profit. CME Fed funds futures now have 55.5% probability of a 50-basis point cut in September, only 44.5% for 25 basis points.

— European Commission approved the merger between Bunge and Viterra, subject to certain conditions. The EC granted conditional approval for the $34 billion merger. The approval is contingent upon the companies fulfilling specific commitments, including:

• Divestment of Viterra’s oilseed businesses: The companies are required to divest Viterra’s entire oilseed operations in Hungary and Poland.

• Logistical asset divestment: Several logistical assets linked to these oilseed operations must also be divested.

The combined entity is expected to become the world’s second-largest agricultural trading company by revenue. Bunge will own approximately 70% of the combined entity. The merger will strengthen the companies’ positions in the soybean and wheat markets.

The deal still requires regulatory clearance from other jurisdictions, notably China and Canada. Due to ongoing regulatory reviews, the closure of the deal may be delayed beyond the initially targeted mid-2024 timeframe.

The U.S. position on the proposed merger is currently under review by regulatory authorities, including the Department of Justice (DOJ) and other antitrust regulators. The DOJ is expected to review the merger to assess its impact on market competition, particularly in the grain and oilseed sectors, where both companies have substantial operations. The Consumer Federation of America has expressed concerns that the deal would consolidate the processing of oilseeds used to make plant-based foods and biofuels, potentially harming consumers and businesses reliant on these commodities.

Similar concerns have been raised in Canada, where the Competition Bureau has highlighted potential anti-competitive effects, particularly in grain handling and export markets.

— Gold prices have seen a significant surge, driven by a combination of geopolitical tensions, central bank policies, and ongoing demand from various sectors. The recent escalation of tensions in the Middle East has been a major factor in pushing gold prices higher. These developments have increased the appeal of gold as a safe-haven asset, driving investors towards the precious metal in times of uncertainty. The Federal Reserve’s recent policy decisions have also contributed to gold’s rally. The Fed has kept short-term interest rates steady, indicating that inflation is moving closer to its 2% target. This monetary policy stance tends to benefit gold, as lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.

Meanwhile, central banks continue to be significant players in the gold market:

• Q2 2024 demand: Central bank gold demand totaled 183 tonnes in Q2, which is 6% higher year-on-year.

• Record first half: Net buying in the first half of 2024 amounted to 483 tonnes, 5% above the previous record of 460 tonnes in H1 2023.

• Future intentions: According to the 2024 Central Bank Gold Reserves survey, 29% of central bank respondents intend to increase their gold reserves in the next twelve months, the highest level observed since the survey began in 2018.

Price and outlook

• As of Aug. 1, 2024, gold was trading at significant levels: Price: $2,450.00 per ounce, representing a 1.18% increase from the previous day.

• Year-to-date performance: Gold is up 18.59% since Jan. 1, 2024.

• Recent trading range: Over the last day, gold’s highest trading price was $2,458.41, while its lowest was $2,417.98.

— U.S. soybeans and corn firmer, wheat weaker overnight. Soybeans posted strong corrective gains overnight, which pulled corn mildly higher. Wheat traded mostly lower. As of 7:30 a.m. ET, corn futures were trading a penny higher, soybeans were mostly 11 to 12 cents higher, winter wheat markets were 1 to 2 cents lower and spring wheat was fractionally lower. The U.S. dollar index was nearly 400 points lower, and front-month crude oil futures are trading just below unchanged.

— USDA daily export sale: 202,000 MT soybeans for to China during MY 2024-2025.

— StoneX estimates above-trendline U.S. corn, soybean yields. Commodity brokerage StoneX estimated U.S. corn production at 15.207 billion bu. on a yield of 182.3 bu. per acre. The firm estimated the soybean crop at 4.483 billion bu. on a 52.6 bu. per acre yield. In July, USDA projected corn production and yield at 15.1 billion bu. on a trendline yield of 181 bu. per acre. USDA’s July soybean projections were 4.425 billion bu. for production and 52 bu. per acre for yield. The StoneX estimates are based on surveys of its customer and assume USDA’s harvested acreage.

— Cash cattle, futures drop. Cash cattle trade started at $1.00 to $2.00 lower prices on Thursday. That helped weigh on cattle futures, which posted sharp losses but given already-steep discounts, the bulk of the pressure was tied to fund liquidation on the first trading day of the month. Thursday’s low-range closes in futures could lead to followthrough selling to close out the week.

— Late-season climb in cash hog index extends. The CME lean hog index is up another 45 cents to $93.53 as of July 31, extending the string of gains to 14 consecutive days. Traders have narrowed the discount August hogs hold to the cash index, but it still stood at 38 cents on Thursday’s close. After two days of declines, the pork cutout value firmed 98 cents to $105.86 on Thursday.

— China halted imports of meat and meat products from the Swift Beef Company plant in Grand Island, Nebraska, and Lineage Logistics cold storage facilities in Grand Island, Nebraska, and Windsor, Colorado, effective July 30. This marks the second Swift Beef facility banned by China, following a May 27 suspension of imports from the Swift plant in Greeley, Colorado.

No reason was given for the suspension, but some reports signal the primary reason for these suspensions may have been the detection of ractopamine, a feed additive used to promote leanness and increase weight in livestock. Ractopamine is banned in over 160 countries, including China and the European Union, due to concerns over animal welfare and potential human health risks. In the case of the Greeley, Colorado, plant, U.S. officials reportedly found traces of ractopamine in meat destined for export to China, leading to the suspension.

— Big food manufacturers are slowing price hikes and offering discounts to win back customers frustrated by inflation, aiming to boost sales, the Wall Street Journal reports (link). Companies like Kraft Heinz and Mondelez International are increasing investments in coupons and introducing smaller, cheaper product packs. This strategy could benefit trucking companies, which have faced a prolonged slump in freight demand, by increasing the volume of goods moved to grocery stores.

— FAO reports slight easing in food price index for July amid mixed commodity trends. The UN Food and Agriculture Organization (FAO) reported that the Food Price Index (FPI) slightly eased to 120.8 in July, down from 121.0 in June. This decrease was driven by lower cereal grain prices, despite increases in meat, vegetable oils, and sugar prices.

The FPI is now 3.1% lower than a year ago and 24.7% below its March 2022 peak.

The cereal price index fell to 110.8, a 3.8% drop from June, with corn, wheat, and rice prices down 12% from July 2023. Vegetable oils saw their index rise to 135.0, the second consecutive increase to a 1.5-year high, due to higher prices for palm, soyoil, sunflower oil, and rapeseed oil. Dairy prices remained steady, while meat prices increased by 1.5%.

The index, which tracks food commodities based on average export shares from 2014-2016, saw a decrease in July after four months of rising prices.

— FTC Chair Lina Khan announced plans for an inquiry into food prices to understand why grocery prices remain high and why grocers’ profits are elevated despite decreasing costs. The effort aims to ensure no illegal business practices are inflating prices. Khan will request a vote by FTC commissioners, with approval expected since Democrats control the agency. The inquiry will collect sales, cost, and profit data from grocery retailers. A recent FTC study indicated that large grocery chains gained an advantage during the pandemic and may have used inflation to increase profits. The timeline for the inquiry is unclear, but its results could influence future regulatory actions.

— WRDA clears the Senate. The Water Resources Development Act of 2024 (WRDA 2024) unanimously passed the U.S. Senate on Thursday, Aug. 1. This biennial legislation authorizes the U.S. Army Corps of Engineers (Corps) to undertake various projects related to flood control, navigation, and ecosystem restoration across the United States, including significant initiatives in Delaware and other states.

Key Provisions of WRDA 2024

• Flood control and navigation: Authorizes 83 feasibility studies and 13 new or modified construction projects nationwide, focusing on flood control, navigation, and ecosystem restoration.

• Policy changes: Includes a significant change in the cost-sharing formula for inland waterway projects, shifting from a 65% general fund and 35% Inland Waterways Trust Fund split to a 75% general fund and 25% trust fund split permanently.

• Expedited implementation: Directs the Corps to expedite the implementation of authorities provided by Congress in prior WRDAs and increases transparency across water infrastructure projects.

Outlook: The House passed its version of WRDA legislation on July 22. The next step involves a conference process between the EPW Committee and the House Transportation and Infrastructure Committee to resolve differences between the two bills.

— Senate as expected fails to advance a bipartisan tax deal aimed at expanding the child tax credit and restoring lapsed tax breaks for businesses. The legislation, which required 60 votes to move forward, fell short with a vote of 48-44. The bill had previously passed the House with overwhelming bipartisan support, but faced substantial opposition in the Senate, primarily from Republicans. Many Senate Republicans opposed the bill, viewing it as a strategic move by Democrats to gain a legislative victory ahead of the November elections. Republicans believe they might secure better terms for tax reform if they gain control of Congress and the White House in the upcoming elections. Some Republicans criticized the bill’s funding mechanism, which involved expediting the deadline for companies to submit retroactive claims for employees retained during the Covid-19 pandemic. The IRS had flagged these claims as being at high risk for fraud, further complicating support for the bill. There was also concern among Republicans that the expansion of the child tax credit could veer into creating a new welfare program, which they opposed.

— Will we see a new farm bill this year? The House departed Washington last week and the Senate on Thursday completed its business. When Congress returns the second week of September, most of the legislative agenda prior to the presidential election will be focused on funding the government past Sept. 30. This raises the question: will we see a new farm bill this year?

Southern Ag Today (link) says, “Only two of the last 10 farm bills were enacted during presidential election years (1996 and 2008 Farm Bills), and both of those were signed into law before Congress left town for the August recess. The remaining eight farms bill were enacted in the Congress following the presidential election, with two of those (1990 and 2018 Farm Bills) coming in the lame duck session following the midterm elections.

Following are the key issues holding up completion, according to SAT:

· Improving the farm safety net. As we’ve said for the last two years — and there seems to be growing agreement on this point — there is no point in doing a farm bill absent improvements to the farm safety net, namely improving the Reference Prices in the Price Loss Coverage (PLC) program and the loss thresholds in the Agriculture Risk Coverage (ARC) program. With that said, there is still disagreement on the extent of the improvements and how to pay for them.

· Commodity Credit Corporation (CCC). Discretionary use of the CCC has long been a sticking point for lawmakers, but that concern has grown dramatically over the course of the last two Administrations, where the CCC has been used to deliver tens of billions in aid to agricultural producers and, more recently, climate-smart programming. Many in Congress would like to restrict the Secretary’s use of the CCC, returning decisions about funding to Congress. Doing so would save money that could be used to offset improvements to the farm safety net. While we discussed CCC funding in detail last Fall, the Congressional Budget Office (CBO) will officially weigh in on this topic tomorrow when they release the cost estimate for the House Agriculture Committee-passed farm bill.

· Inflation Reduction Act (IRA). While there seems to be growing consensus over bringing the IRA conservation funding inside of the farm bill, there are ongoing disagreements about whether that funding should continue to be restricted to climate-smart practices. Some lawmakers would like to put those decisions – like most other conservation decisions – in the hands of local decisionmakers.

· Thrifty Food Plan (TFP). There is still considerable frustration among most Republican lawmakers over the Biden Administration’s roughly $250 billion unilateral increase to the Supplemental Nutrition Assistance Program (SNAP) via adjustments to the TFP in 2021. Similar to the discussion on the CCC, many lawmakers would like to return decisions about future increases in SNAP spending to Congress.

Southern Ag Today says, “While there are certainly disagreements, in our view, the list above is by no means insurmountable. While there is very little legislative runway prior to the election, we do think it’s possible to wrap up the farm bill during the lame duck session, perhaps as part of a supplemental... Rather than punting the farm bill into the new Congress and relying on another year of disaster assistance, Congress could choose to reauthorize the farm bill in the lame duck session —– improving the farm safety net and side-stepping the need for disaster assistance — all the while keeping the farm bill out of what will already be a very crowded legislative calendar in 2025.”

— Coming CBO scoring report on House farm bill will not please Chairman Thompson. Later today, the Congressional Budget Office (CBO) is expected to issue a final score on the House bill which passed the Ag Committee and is waiting on a House floor vote. The Senate has not even released its farm bill text. As for the CBO report, sources say it relies on the same methodology that has some say has led CBO to underestimate Commodity Credit Corporation (CCC) outlays by more than $60 billion over the past seven fiscal years.

Comments: A veteran farm bill observer says analysts cannot assume the appropriators will replenish the CCC (especially replenish early to provide more borrowing authority) even though they have in the past. One contact said that when there is a clear conflict between scoring convention and reality, that situation is tailor made for the Budget Committee to weigh in. Recall that Rep. Jodey Arrington (R-Tex.) said when he left the House Agriculture Committee that he was doing so because he could be more helpful to farmers and ranchers at other committees. He is now Chairman of the Budget Committee.

— Eighteen water districts across arid U.S. West will receive a share of $400 million from USDA for projects aimed at reducing water consumption while maintaining agricultural production. The initiative is expected to cut irrigation use by 50,000 acre-feet on 250,000 acres in 12 states, including Texas, California, and Oregon. This comes as the region faces its driest quarter-century in 1,200 years, despite two recent wet winters. USDA’s water-saving commodity program is part of broader efforts to enhance water efficiency, with significant funding allocated through the 2022 climate, healthcare, and tax law. Five California districts and several others across various states will each receive $15 million for voluntary water-saving programs. USDA aims to learn from these strategies to expand water-saving commodity production in the future.

— The Panama Canal is on track to resume normal transit levels in the coming months, thanks to early rainfall that has alleviated the severe drought conditions experienced in the past year. The Panama Canal Authority (ACP) announced plans to incrementally increase the number of daily transit slots for vessels.

As of the end of July 2024, the Panama Canal has increased its daily transit slots to 34 vessels per day. This month, the number of daily transits will be raised to 35. In September, the daily transit slots will further increase to 36 vessels per day.

The ACP aims to fully normalize operations by 2025, provided that the expected rainfall continues. The authority is also implementing long-term measures to mitigate the impact of climate change, including the development of a second reservoir and various water-saving initiatives.

The restrictions and subsequent adjustments have had significant economic implications. The ACP anticipates a reduction in toll revenue by up to $700 million for the fiscal year ending in September 2024. However, the gradual return to normal transit levels is expected to mitigate some of these losses.

— Michigan Supreme Court backs regulators on manure pollution controls, allowing EGLE to tighten rules without lengthy process. The Michigan Supreme Court ruled 5-2 in favor of state regulators, allowing the Michigan Department of Environment, Great Lakes, and Energy (EGLE) to enhance pollution controls on factory farms without a lengthy rulemaking process. This decision stemmed from a 2020 update to Michigan’s waste disposal permit for large livestock operations, aimed at reducing manure runoff that pollutes waterways like Lake Erie. The Michigan Farm Bureau challenged the new requirements, arguing they were too costly and required legislative consent due to a 2004 law limiting new water quality rules. The court’s decision, written by Chief Justice Elizabeth Clement, rejected these arguments, requiring challengers to exhaust administrative appeals before pursuing court action. Environmental groups hailed the ruling as a victory for clean water and stronger farm pollution regulations, while the Michigan Farm Bureau did not immediately comment. The Legislature is reviewing bills to restore EGLE’s water quality rule-making authority.

— U.S and its allies successfully completed a major prisoner exchange with Russia, resulting in the release of several high-profile detainees. This was the largest prisoner swap between the U.S., its allies, and Russia since the Cold War era.

A total of 24 prisoners were exchanged across six countries. 16 individuals were released by Russia, including 5 Germans and 7 Russian political prisoners. In return, 8 Russian nationals were freed by the U.S. and its European allies.

Notable Americans released

• Evan Gershkovich: Wall Street Journal reporter arrested in March 2023 on espionage charges, which he and the U.S. denied. In an article (link) about the complex prisoner swap negotiations, the WSJ wrote that Gershkovich left prison with handwritten letters that are the making of his book, and that on a clemency paper given to him ahead of his release he wrote down a request to interview Russian President Vladimir Putin.
•.Paul Whelan: Former U.S. Marine detained since 2018, also on disputed espionage charges.
• Alsu Kurmasheva: Russian-American journalist working for Radio Free Europe, held since June 2023.

Russians released in the exchange

•.Vadim Krasikov: Former FSB colonel serving a life sentence in Germany for a 2019 assassination in Berlin.
• Vadim Konoshchenok: Alleged Russian intelligence operative accused of violating U.S. export controls.
• Vladislav Klyushin: Russian businessman convicted in a hacking scheme.
• Roman Seleznev: Convicted hacker and credit card fraudster.
• Two alleged Russian spies held in Slovenia.

The exchange required complex negotiations involving multiple countries, including the U.S., Russia, Germany, Norway, Poland, and Slovenia. President Biden hailed the deal as “a feat of diplomacy” and emphasized the importance of international cooperation.

The freed Americans were greeted by President Biden and Vice President Harris upon their return to U.S. soil.

— Presidential campaign funds:

• Donald Trump’s campaign raised nearly $139 million in July, bringing its cash reserves to $327 million for the final stretch to the election. This is an increase from the $112 million raised in June.
• Vice President Kamala Harris’s campaign raised $310 million in July, including over $200 million in the first week of her candidacy, and has $377 million in cash reserves.

— Donald Trump sees no reason to participate in a presidential debate against Vice President Kamala Harris, citing his lead in the polls as the primary reason. During an interview on Fox Business, Trump mentioned, “Why should I do a debate? I’m leading in the polls, and everybody knows her, everybody knows me.”

Trump’s reluctance to debate Harris is not entirely new. He has previously expressed skepticism about the value of debates, especially when he perceives himself to be in a strong position.

Trump also reiterated his support for tariffs as a key trade policy tool, stating that he would raise them on countries that “mistreat” the United States .

Trump acknowledged that President Biden’s withdrawal from the race has changed the dynamics, noting an increase in enthusiasm for Harris.

— Charlie Cook: Shift in Democratic enthusiasm post-Biden debate boosts Harris’s chances. In “A Whole New Ball Game: Democratic Enthusiasm Has Shifted Seismically,” Charlie Cook highlights the dramatic shift in Democratic enthusiasm following President Biden’s debate performance on June 27, which exposed voter concerns about his age and health. Cook says this shift mirrors a song by The Doors, where “down so very damn long...looks like up to me.” While Democrats are in a better position, it doesn’t guarantee a win, Cool says. He notes the dynamics have changed significantly, making Harris’ path to victory plausible despite unchanged poll numbers. Post-debate, Trump’s lead over Harris is 1.7 points, narrower than his lead over Biden. Cook’s bottom line: The election is now highly competitive, with Democratic enthusiasm increasing significantly, potentially making a critical difference in the outcome.

— Tension accelerates in Middle East. The assassination of Ismail Haniyeh, the political leader of Hamas, has significantly escalated tensions in the Middle East, raising fears of a broader conflict. Haniyeh was killed in Tehran by an explosive device that had been covertly smuggled into the guesthouse where he was staying, an act that both Hamas and Iran attribute to Israel. Iran’s Supreme Leader, Ayatollah Ali Khamenei, has vowed severe retribution for Haniyeh’s assassination, describing it as an affront to Iran. The killing of Haniyeh follows the recent assassination of a senior Hezbollah commander in Lebanon, also attributed to Israeli actions.

President Joe Biden has expressed concern that Haniyeh’s assassination has undermined the prospects for a ceasefire deal. The U.S. is now considering bolstering its defenses in the Middle East in anticipation of possible Iranian retaliation. Secretary of State Antony Blinken said the U.S. had no prior knowledge of the assassination plot, highlighting the limits of American influence in the region.

— Cotton AWP falls. The Adjusted World Price (AWP) for cotton declined to 53.94 cents per pound, effective today (Aug. 2), down from 55.02 cents per pound the prior week. This is the lowest AWP since it was at 53.43 cents per pound the week of Oct. 16, 2020. However, the AWP is still nearly 2 cents above the level that would trigger an LDP. Meanwhile, USDA announced that Special Import Quota #16 will be established Aug. 8 for the import of 42,137 bales of upland cotton, applying to supplies purchased no later than Nov. 5 and entered into the U.S. no later than Feb. 3.

— A new vaccine for cows aims to reduce their methane emissions by 20% by decreasing their tendency to burp. Since agriculture is the largest human-made source of methane, primarily from cattle, this could significantly impact greenhouse gas emissions. The beef and dairy industry accounts for 14.5% of all emissions. The vaccine works by producing antibodies in cows’ saliva that attack methanogen bacteria in their stomachs. Initial trials showed a 13% reduction in emissions, with plans to improve and distribute the vaccine widely within five years. Link for more.

— China’s solar expansion raises food security concerns as farms turn to solar projects. China installed more solar power capacity last year than the U.S. has built in its history, but this expansion has raised concerns as solar farms encroach on cropland, challenging Xi Jinping’s goal of food self-sufficiency, the Wall Street Journal reports (link). The high demand for renewable energy and lucrative state subsidies have led some companies, officials, and farmers to repurpose agricultural land for solar projects, defying Beijing’s policies. This issue gained national attention after China Central Television (CCTV) reported that high-quality farmland in Hubei province was covered with solar panels, contradicting plans to enhance crop yields. Despite Xi’s emphasis on protecting farmland and promoting renewable energy to cut carbon emissions, local governments have sometimes prioritized solar developments for immediate economic benefits. Beijing has responded by punishing those exploiting subsidies at agriculture’s expense and issuing directives to prevent solar projects on farmland. However, conflicts between renewable energy expansion and food security continue, with solar projects affecting agricultural productivity and leading to lower crop yields. The tension underscores the challenge of balancing China’s renewable energy goals with its need for arable land to ensure food security.

— Illegal border crossings at the U.S. southern border have reached a four-year low. This decline follows a peak of 250,000 crossings in December 2023 and has been consistent throughout 2024. The seven-day average of illegal crossings is now down to 1,650, approaching levels that may prompt the easing of asylum limits. The Biden administration has implemented stricter deportation policies, making it easier to deport certain migrants. Border patrol agents are no longer required to ask migrants if they fear persecution in their home countries, leading to a 90% reduction in credible fear interviews, from 10,000 in May to 1,000 in July. Since December 2023, Mexico has intensified its efforts to control migration by conducting checkpoints and immigration sweeps, particularly at its southern border with Guatemala. This has significantly reduced the number of migrants reaching the U.S. border.

Of note: The number of migrants being flown directly to the U.S. under the Biden administration’s Cuban, Haitian, Nicaraguan, and Venezuelan (CHNV) mass-parole program is substantial. According to documents obtained by the House Committee on Homeland Security, over 400,000 inadmissible aliens have been processed into the country through this program since its inception in January 2023. The state receiving the highest number of these migrants is Florida, with Miami and Ft. Lauderdale being the primary entry points.

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