Production Ag Will Pick House Over Senate Farm Bill Proposals. Reason: Better Safety Net

USDA reports today | Rail strike pushed back in Canada | China forecasts big drops in corn, soy, cotton imports | U.S. farm equipment sales decline

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May 10, 2024 09:46 AM

USDA reports today | Rail strike pushed back in Canada | China forecasts big drops in corn, soy, cotton imports | U.S. farm equipment sales decline

Today’s Digital Newspaper

MARKET FOCUS

Fed officials continue to emphasize “uncertainty” regarding the U.S. economy
Big U.S. consumer differences in spending patterns
Significant downturn in U.S. ag equipment market occurring
Mobile and Verizon in talks that would divvy up U.S. Cellular
‘No law says the Fed moves first.” — Andrew Bailey, Bank of England governor
Britain’s economy shows signs of recovery, growing by 0.6% in first quarter of year
Panama Canal Authority in discussions with liquefied natural gas (LNG) industry
Ag markets today
May USDA reports feature key new info
Rail strike is pushed back in Canada
U.S. groups urge Canadian action to prevent rail strike impacting North America
Significant fluctuations in cocoa prices largely due to poor cocoa crop in 2023
Ag trade update
Relentless rainfall in Brazil impacting ag production in several areas
NWS weather outlook
Pro Farmer First Thing Today items

BALTIMORE BRIDGE COLLAPSE

Explosive removal of bridge debris on container ship Dali planned for Saturday

CONGRESS

Senate Thursday passed FAA reauthorization bill just ahead of critical deadline
White House positioning itself on tax policy

ISRAEL/HAMAS CONFLICT

Israel hits out at President Biden’s threat to withhold more weapons

POLICY

New farm bill update
Farm program payment limits

PERSONNEL

Kristin Johnson to fill top role at U.S. Treasury Department

CHINA

China forecasts sharp cuts in corn, soybean & cotton imports for 2024-25
Biden set to get tougher on China with fresh tariffs

LIVESTOCK, NUTRITION & FOOD INDUSTRY

More cases of highly pathogenic avian influenza (HPAI) affecting dairy herds ,
CDC to post data on influenza A found in wastewater in a public dashboard
CDC calls for PPE distribution to farmworkers amid bird flu outbreak .
transport to help curb its spread.
Sen. Murray probes FDA Chief Califf on avian flu response and food safety
U.S. District Court Judge rules Pilgrim’s Pride must face class action claims

HEALTH UPDATE

Ascension grappling with a significant cyberattack

POLITICS & ELECTIONS

How big (or small) is 2024 electoral college playing field?

OTHER ITEMS OF NOTE

Cotton AWP falls under 60 cents

MARKET FOCUS

— Equities today: Asian and European stock indexes were mostly firmer overnight. In Asia, Japan +0.4%. Hong Kong +2.3%. China flat. India +0.4%. In Europe, at midday, London +0.8%. Paris +0.7%. Frankfurt +0.6%. U.S. equities opened higher, with the Dow up around 150 points. The S&P 500 is set for a third weekly rise — the longest run since February. Treasuries and the dollar were flat. Focus turns to the Fed, as several officials, including Michelle Bowman and Neel Kashkari, make comments before next week’s CPI data. Meanwhile, gold advanced to the highest level in three weeks and oil extended gains into a third day. Copper climbed above $10,000 a ton as supply worries mount.

U.S. equities yesterday: All three major indices registered gains after two days of relatively lackluster performance. The Dow gained 331.37 points, 0.85%, at 39,387.76. The Nasdaq rose 43.51 points, 0.28%, at 16,346.26. The S&P 500 was up 26.41 points, 0.51%, at 5,214.08.

— T-Mobile and Verizon are said to be in talks that would divvy up U.S. Cellular. The telecommunications giants are in discussions to split one of the country’s last big regional wireless carriers, with each getting a different part of the business, according to the Wall Street Journal. One scenario: T-Mobile’s U.S. arm would pay $2 billion for some operations and wireless spectrum licenses; Verizon is in talks on a separate deal with U.S. Cellular.

— Ag markets today: Wheat futures surged amid strong followthrough buying overnight, pulling corn and soybeans higher. As of 7:30 a.m. ET, corn and soybean futures were trading mostly 2 cents higher, while wheat was 10 to 15 cents higher. Front-month crude oil futures were around 60 cents higher, and the U.S. dollar index was trading just above unchanged. In Asia, Japan +0.4%. Hong Kong +2.3%. China flat. India +0.4%. In Europe, at midday, London +0.8%. Paris +0.7%. Frankfurt +0.6%.

Wholesale beef prices drop. After briefly trading above $300.00 Tuesday morning, Choice wholesale beef prices have sharply retreated, including a $1.28 drop on Thursday. Select fell $2.49. While the pickup in movement to 173 loads signals underlying demand, it appears retailers are selective buyers.

Cash hog pause continues. The CME lean hog index is unchanged at $91.28 as of May 8, holding just below the seasonal peak to date in late April. While the pause in the seasonal rally has caused traders to reduce premiums futures hold to the cash index, the fact there hasn’t been much of a pullback in the cash market seemingly bodes well for an eventual surge to a summertime high.

— Agriculture markets yesterday:

Corn: July corn fell 2 cents to $4.56 1/2, closing nearer the session low.
Soy complex: July soybean futures sunk 19 1/4 cents before settling at $12.08 1/2, nearer session lows. July meal futures closed $5.6 lower to $372.9, on session lows
Wheat: July SRW wheat rose 3 1/2 cents to $6.37 1/2 and closed near mid-range. July HRW wheat gained 3 1/4 cents to $6.51 3/4 and settled nearer the session low. July spring wheat futures rose a penny to $7.03 3/4.
Cotton: July cotton futures fell 146 points to 78.60 cents, though settled off session lows.
Cattle: June live cattle fell 52 1/2 cents to $175.95. August feeder cattle dropped $1.35 to $251.05. Prices closed nearer their session lows.
Hogs: lat-to-weak cash and wholesale markets appeared to undercut hog futures again Thursday, with most-active June futures falling $1.00 to $97.725.

— Quotes of note:

Federal Reserve officials continue to emphasize “uncertainty” regarding the U.S. economy, particularly concerning the trajectory of inflation. San Francisco Fed President Mary Daly noted in a recent podcast that the confidence in predicting inflation has been disrupted by recent data, making the future of inflation rates unclear. Despite this, Daly remains optimistic that disinflation is occurring and that current monetary policies are effective, adopting a “wait-and-see” approach.
In contrast, Atlanta Fed President Raphael Bostic expressed in a Reuters interview that while the exact timing and extent are uncertain, he believes there is potential for interest rate cuts within the year. Bostic highlighted feedback from businesses suggesting a return to pre-pandemic wage growth levels and indicated that pricing power among businesses has reached its peak. He found the April jobs report, which came in below expectations, to be a positive sign, though he acknowledged the job growth numbers were still robust. His primary focus is on determining the right timing for any adjustments to the Federal funds rate.
Both Daly and Bostic are voting members of the Federal Open Market Committee (FOMC), lending significant influence to their perspectives. Despite various Fed officials scheduled to speak, it is anticipated that their views will align with the general sentiment of ongoing uncertainty expressed since the conclusion of the May 1 FOMC meeting, particularly concerning the timing of any future rate adjustments.
Big U.S. consumer differences in spending patterns. Hal Lawton, CEO of Tractor Supply Company, the farming retailer, told the New York Times: “In the first quarter, our upper-income consumer over-indexed in big ticket categories and recreational purchases compared to our lower-income consumer, who is prioritizing their spend on needs.” John Peyton, CEO of Dine Brands Global, the parent of Applebee’s and IHOP restaurants, told analysts that lower-income consumers are “more aggressively managing their check, finding our value-oriented items.” Bottom line: Less-affluent consumers are feeling the pinch. They’ve blown through their pandemic savings, and they’re racking up credit card and other loan debt. One area to watch: A surge in “buy now, pay later” programs may be masking America’s “phantom” consumer debt problem.
“There is no law that says that the Fed moves first.” — Andrew Bailey, the Bank of England governor, has signaled that the central bank could cut interest rates as soon as this summer — potentially ahead of the Fed. Meanwhile, first-quarter GDP data released this morning showed the British economy had emerged from recession.

— Britain’s economy has shown signs of recovery, growing by 0.6% in the first quarter of the year, following contractions in the last two quarters of 2023. This growth rate is the highest since 2021, indicating a significant rebound. Prime Minister Rishi Sunak has commented on the data, suggesting that it demonstrates the UK economy has “turned a corner.” Additionally, with inflation slowing, there is widespread anticipation that the Bank of England may reduce interest rates soon to further support economic growth.

— A significant downturn in the U.S. agricultural equipment market is occurring, primarily caused by falling crop prices and high interest rates, Reuters reports (link). As corn and soy prices hit a three-year low, farmers are less inclined to invest in new machinery, leading to an inventory surplus and reduced sales for equipment dealers. Notably, manufacturers like Deere and CNH Industrial are facing financial pressure due to slower sales after experiencing a boom in 2022 fueled by high farm incomes and pandemic-related financial support.

Dealers are responding by halting new orders, auctioning equipment, and offering heavy discounts and favorable financing terms to reduce inventory levels. Inventory of high-horsepower tractors and combines has significantly increased, with tractors seeing a nearly 107% rise year-over-year. This inventory glut is prompting concerns about maintaining profitability, leading some dealers to turn to auctions as a quick solution to offload surplus stock. This strategy, however, is impacting the pricing dynamics of both new and used machinery in the market.

Of note: The situation has a broader impact on the sector, including parts managers and sales consultants who point to challenges like financing unsold inventory and adjusting to fluctuating demand. The situation reflects broader economic pressures within the agricultural sector, affecting everything from equipment sales to farm operational decisions.

Market perspectives:

— Outside markets: The U.S. dollar index was firmer, with the euro slightly weaker against the greenback. The yield on the 10-year U.S. Treasury note was weaker, trading around 4.45%, while there was a negative tone in global government bond yields. Crude oil futures are higher, with U.S. crude around $79.80 per barrel and Brent around $84.40 per barrel. Gold and silver were solidly higher ahead of US economic updates and market action, with gold around $2,380 per troy ounce and silver around $28.93 per troy ounce.

— Significant fluctuations in cocoa prices this year are largely due to a poor cocoa crop in 2023. This volatility has led to a tripling of cocoa prices in a few months, peaking at over $11,000 per ton by mid-April. As a result, major food companies like Mondelez and Hershey have been impacted, forcing them to raise the prices of their products. Mondelez, known for Chips Ahoy cookies and Cadbury chocolates, increased their prices by about 6%, while Hershey raised their prices by approximately 5%. Both companies have indicated that they might implement further price hikes if cocoa prices remain high. This situation presents a direct impact on consumers, particularly chocolate lovers, as they may face higher prices for chocolate products.

— Panama Canal Authority is in discussions with the liquefied natural gas (LNG) industry to increase the number of LNG ship crossings through the canal. This initiative comes as water levels in the canal have risen following recent rainfall, presenting an opportunity to accommodate more LNG shipments.

Recent statistics from April indicate that LNG transits through the Neopanamax locks made up only 4.9% of total crossings, while container ships dominated with 61.6%. In response to the rising demand for LNG exports, particularly from the U.S., Ricaurte Vasquez, a spokesperson for the Canal, mentioned the possibility of modifying slot allocations to prioritize LNG customers. This involves conducting surveys among transport clients to better understand their needs regarding frequency of access and permits.

The Canal Authority aims to ensure more slots are available for LNG crossings, with plans to publicize the number of slots for LNG producers once studies are completed and consensus is achieved among the stakeholders. Vasquez noted the challenges in balancing the desires of the LNG industry, which harbors aspirations for a dedicated LNG canal, with the need to keep the canal open to all types of international commerce.

Panamanian president-elect, Jose Raul Mulino, has pledged to expedite the permitting process for a canal proposal to build water reserves, which are essential for managing the canal’s water levels but are not expected to be ready until around 2030. This involves securing necessary permits and reaching agreements with local communities, emphasizing a strategic long-term approach to enhancing the canal’s capacity and operational efficiency.

— Rail strike is pushed back in Canada. Labor asked Canadian Industrial Relations Board to look at the whether the strike has safety implications. A strike cannot start until that review is complete — no timeline for completion of the review.

Meanwhile, U.S. Groups urged Canadian action to prevent rail strike impacting North America. The National Grain and Feed Association (NGFA) along with 19 other members of the Agricultural Transportation Working Group have expressed serious concerns over the potential impact of a rail strike in Canada, which could start as soon as May 22. This comes after members of the Teamsters Canada union, representing 9,000 workers from Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC), voted in favor of a strike amidst ongoing labor negotiations.

The Teamsters Canada President, Paul Boucher, warned that such a strike could cause unprecedented disruptions to Canadian supply chains. In response, on May 9, NGFA and other stakeholders urged the Canadian Minister of Labor, Seamus Regan, to designate rail as an essential service to prevent a strike. They emphasized that a rail stoppage would not only cause shutdowns and slowdowns of rail-dependent facilities but also have devastating consequences on both national and global food security. Link to letter.

Furthermore, the NGFA and its allies highlighted the broader implications of such a disruption, noting that the ripple effects could extend across North America due to the integral role of freight rail in transporting essential products. They also pointed out that trucking would not be a feasible alternative for many shippers because of the high-volume needs and long distances involved, underscoring the critical nature of maintaining continuous rail service.

— Ag trade update: Egypt purchased 73,000 MT of sunflower oil and 29,000 MT of soyoil.

— NWS weather outlook: Severe thunderstorms possible in the Mid-Atlantic and Southeast today... ...Above average temperatures will spread across the West and north-central U.S. this weekend.

Items in Pro Farmer’s First Thing Today include:

• Wheat leads overnight price gains
• U.S./China tensions heighten
• Dry weather in Australia’s top grain state raises crop concerns
• French wheat crop ratings improve but still at four-year low

BALTIMORE BRIDGE COLLAPSE

— Explosive removal of bridge debris on container ship Dali planned for Saturday. The container ship named Dali has been a significant focus in Baltimore following its collision with the Francis Scott Key Bridge six weeks ago, which resulted in the bridge’s partial collapse. Authorities are planning to use explosives to cut through a large section of the bridge that is currently resting on the Dali. This operation is intended to lighten the ship’s load and facilitate its removal from the site. The controlled demolition, scheduled for Saturday evening, aims to be a precise and swift solution to separate the 8–12-million-pound piece of debris from the ship’s bow.

The process of freeing the Dali is expected to be meticulous and slow, emphasizing safety and control to avoid further damage to the vessel or surrounding structures. The Baltimore Sun reports that post-explosion, the ship will likely remain stationary for a couple of days to allow for thorough inspections and assessments before it is moved to the Port of Baltimore’s Seagirt Marine Terminal. Here, further cleanup and investigations will take place, along with necessary repairs, before the ship is potentially sent to a shipyard for more extensive refurbishment.

The operation to remove the Dali and the collapsed bridge section involves numerous technical and environmental considerations, including the timing with tides and potential impacts on underwater infrastructure like gas pipelines and water mains.

CONGRESS

— Senate Thursday passed a Federal Aviation Administration (FAA) reauthorization bill just ahead of a critical deadline. This legislation is set to renew the FAA’s authority for the next five years and commits billions of dollars towards enhancing aviation safety, improving passenger and worker protections, and investing in airport infrastructure across the United States.

Key aspects of the bill include measures to address the current shortage of air traffic controllers by expanding hiring initiatives. Additionally, it aims to strengthen consumer protections, particularly concerning refunds for flight cancellations and delays. In response to recent airline safety incidents, the bill also proposes the implementation of technology designed to reduce the risk of runway collisions.

With broad bipartisan support in the Senate, the bill now moves to the House for passage. If successfully enacted, this legislation could significantly improve the safety and efficiency of U.S. aviation operations.

— White House is positioning itself on tax policy to highlight its contrasts with the Republican stance as the November presidential election approaches, the Associated Press reports. Lael Brainard, the director of the White House National Economic Council, is set to address these issues in a forthcoming speech at the Brookings Institution.

A central point of debate is the looming expiration of the 2017 tax cuts implemented under President Donald Trump, which if allowed to expire completely, would result in increased tax payments for the vast majority of U.S. households. However, extending these cuts would add approximately $4.6 trillion to the national debt over the next decade, according to the Congressional Budget Office (CBO).

President Biden is advocating for the extension of middle-class tax cuts while proposing increased taxes on highly profitable corporations and the wealthiest Americans. This approach is framed as promoting tax fairness and fiscal responsibility, contrasting with Trump’s tax policies, which are criticized for disproportionately benefiting the wealthy and failing to spur the promised economic growth.

Trump, countering Biden’s proposals, claims that removing his tax cuts would lead to significant economic damage, including mass layoffs. He continues to assert that Biden’s economic policies, particularly in the context of current inflation rates, are effectively tax increases themselves. Trump also proposes substantial tariff increases, which analyses suggest would further burden U.S. families financially.

ISRAEL/HAMAS CONFLICT

— Responding to the U.S. decision to pause a shipment of bombs to Israel, Prime Minister Benjamin Netanyahu criticized President Joe Biden, asserting that the move was a mistake. Netanyahu emphasized Israel’s determination to continue its military operations, even if it means fighting with “fingernails,” highlighting the country’s resolve in the face of challenges. The pause in U.S. military support is seen as potentially hindering Israel’s ability to fulfill its military objectives, particularly concerning a potential invasion of Rafah, a city in southern Gaza. The Israeli military has reassured that it possesses the necessary weapons for its current operations in Gaza, including any actions involving Rafah. However, the delay in receiving further U.S. arms could impact the broader scope of Israel’s military capabilities.

POLICY UPDATE

— New farm bill update:

·Still waiting on House Ag staff papers on key farm bill topics.

Easy winner between House and Senate farm bill proposals re: Title I safety net. Most grain, soy, rice, cotton and other producers will choose the House GOP farm bill over the Senate farm bill version when it comes to improving farmer safety net and crop insurance programs. Major difference will be a higher percentage increase for some commodities in the House versus the Senate. Another: more flexible crop insurance provisions.
Of note: Last week, the chairs of the Congressional Agricultural Committees released competing proposals for reauthorizing the farm bill. The Senate proposal includes a 5% increase in reference prices for seed cotton, rice, and peanuts. While the House GOP farm bill has still not officially indicated its variable reference prices, sources signal an increase of 10% to 15% (12.5%?).

Base acres. Some sources signal that the bill provides authority to expand base acres to include producers who currently cannot participate in ARC/PLC. It maintains all current base acres. It will likely provide a one-time opportunity to establish base acres for producers who currently do not have base or whose average planted and prevent plant acres exceed the current base acres on the farm. It will likely use the reference period of crop years 2019 through 2023 to determine the number of eligible acres on the farm. Other sources say it contains provisions to allow eligible acres to include a portion of acres planted to non-covered commodities and includes provisions to establish payment yields on the additional base acres. Of note: The base update will likely be available to any producer whose planted acres exceed existing base, regardless of demographics or socially disadvantaged status.
• Official CBO scores of coming farm bill proposals will be key. Reasons: It will show the Senate farm bill is not budget neutral and could need around $20 billion in additional funding. If so, questions have already surfaced as to where that funding comes from.

— Farm program payment limits, while not new, have significantly evolved since their inception in the 1938 Agricultural Adjustment Act, becoming notably more complex and potentially counterproductive over time. Initially introduced to ensure that farm subsidies were accessible only to those genuinely in need, these limits have grown into a complicated set of rules that can be difficult to navigate, even for experts.

A key point of contention highlighted in a recent article (link) in the Drake Journal of Agricultural Law is the 2008 Farm Bill’s approach to payment limitations, particularly how it affects individuals and legal entities like LLCs and corporations. Unlike general partnerships, which can combine payment limits of individual partners, LLCs and corporations are restricted to a single payment limit—regardless of the number of eligible members involved. This setup can make risk management and farm transitions for family farms more challenging, as these structures might inadvertently restrict the total amount of federal assistance they can receive.

The article advocates for an “entity agnostic” approach to payment limits, suggesting that all entities, especially pass-through ones like LLCs, should be treated similarly to partnerships. This would allow them to leverage multiple payment limits based on the number of actively engaged stakeholders. This proposal aims not to alter the criteria for who is eligible for assistance but rather to modernize how payment limits are applied to better support the realities of modern farming operations and facilitate smoother generational transitions in farming.

This discussion is particularly timely as Congress considers updates in the upcoming farm bill debates, with potential implications for the future structure and fairness of farm program payments.

PERSONNEL

— White House is poised to nominate Kristin Johnson, a Democratic commissioner at the Commodity Futures Trading Commission, to fill a top role at the U.S. Treasury Department overseeing banks, according to reports. If confirmed, the role as assistant secretary for financial institutions puts Johnson in a senior policy position at Treasury, in charge of coordinating with other financial regulators, including banking agencies, the Securities and Exchange Commission and the CFTC. The Treasury office is responsible for developing legislation. It played a central role in crafting some of the 2010 Dodd-Frank Act banking oversight legislation in the wake for the 2008 financial crisis. It also plays an important role in developing cybersecurity policy for the financial sector. Graham Steele, the last person to hold the position, stepped down from the role in January.

CHINA UPDATE

— President Biden is set to get tougher on China with fresh tariffs. Bloomberg reports (link) the president will reportedly unveil China tariffs next Tuesday, targeting key sectors including EVs, batteries and solar equipment. He’s expected to reject the across-the-board tariff hikes sought by Donald Trump.

Sen. Chuck Grassley, (R-Iowa) expects Beijing to respond again. “We know how China reacted when Trump put tariffs on,” he said. “They hit agriculture with it. I can’t be sure that China would hit agriculture the same as they did in the Trump ones, but they’re going to hit back.”

LIVESTOCK, NUTRITION & FOOD INDUSTRY

— More cases of highly pathogenic avian influenza (HPAI) affecting dairy herds, with four new incidents in Michigan and one in Colorado as of May 8. This development maintains the number of states reporting HPAI cases at nine. Amid these rising case numbers, concerns among lawmakers regarding the U.S. government’s response to the outbreak are intensifying.

Emergency funding mulled. Sen. John Hoeven (R-N.D.), the Ranking Member of the Senate Appropriations Agriculture Subcommittee, discussed potential emergency funding to address the outbreak. However, details regarding the cost of such funding are still unclear, according to Politico. Hoeven emphasized the importance of proactive measures, especially given the risks of disease transmission from animals to humans.

USDA recently provided clarifications (link) on a federal order issued on April 24, which concerns the movement and sale of lactating dairy cattle and came into effect on April 29. USDA, along with the Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC), continue to assure the public that the U.S. food supply remains safe. This reassurance comes despite the identification of a human case of HPAI in a dairy worker in Texas, highlighting the ongoing efforts by federal agencies to manage and contain the spread of the disease effectively.

— The U.S. Centers for Disease Control and Prevention (CDC) is planning to post data on influenza A found in wastewater in a public dashboard possibly as soon as today that could offer new clues into the outbreak of H5N1 in dairy cattle. CDC wastewater team lead Amy Kirby told Reuters on Thursday the agency has identified spikes of influenza A, of which H5N1 is a subtype, in a handful of sites and is investigating the source. She said there is no indication of human infection with H5N1. The dashboard will allow individuals to check for increases in influenza A in their area and compare it with historical data where available. Seasonal influenza cases have fallen off sharply, so spikes could offer a signal about unusual flu activity.

— CDC calls for PPE distribution to farmworkers amid bird flu outbreak. An urgent public health response coordinated by the Centers for Disease Control and Prevention (CDC) is needed in light of recent bird flu (H5N1 virus) infections detected in dairy cattle. The CDC, through its principal deputy director Nirav Shah, called on state health departments to release personal protective equipment (PPE) stockpiles for distribution among farmworkers, prioritizing those working in dairies with confirmed cases of the bird flu. This move aims to protect farmworkers from the virus, which has not only affected poultry but has also been found in dairy herds across several states.

Further emphasizing the seriousness of the situation, the CDC’s initiative comes after a resurgence in bird flu cases, ending a brief hiatus in new detections. The disease has been identified in 42 dairy herds across nine states, leading to concerns about its potential spread among humans. The CDC and other experts, including Jennifer Nuzzo, Lauren Sauer, and Nahid Bhadelia, who co-authored an essay (link) in the Washington Post, stress the critical need to protect farmworkers to prevent the virus from evolving into a more significant threat. USDA has also implemented measures requiring that lactating cows be tested for the virus before interstate transport to help curb its spread.

— Sen. Murray probes FDA Chief Califf on avian flu response, cosmetics, and food safety at budget hearing. At a Senate Appropriations Subcommittee hearing regarding the FDA’s fiscal year 2025 budget, Sen. Patty Murray (D-Wash.) questioned FDA Commissioner Dr. Robert Califf on several critical issues, including the agency’s response to the avian flu, implementation of cosmetics reform, and the reorganization of its Human Foods Program.

Murray expressed concerns over political interference in FDA’s scientific decision-making, particularly regarding the medication mifepristone in light of attacks from anti-choice activists and some Republican lawmakers. She defended the medication’s safety and efficacy, supported by extensive scientific data.

Regarding the avian flu, Dr. Califf explained the coordination efforts with the Office of Pandemic Preparedness and Response Policy (OPPR) and other federal agencies to address the outbreak effectively. He emphasized the need for adequate future funding to manage ongoing public health threats.

In discussing the proposed unified Human Foods Program, Dr. Califf described the FDA’s request for an additional $15 million in FY 2025 to support reorganization efforts aimed at improving food safety regulations and enforcement. He outlined plans for a center of excellence in nutrition and a critical foods group to handle issues like infant formula and medical foods, underscoring the complexity and global nature of food safety challenges.

— U.S. District Court Judge Robert Shelby ruled that Pilgrim’s Pride must face class action claims accusing it of conspiring with other poultry companies to fix prices. This alleged price-fixing resulted in lower payments to chicken growers, affecting their earnings significantly. The case, now certified as a class action by the Eastern District federal court of Oklahoma, involves 24,350 growers. These growers are collectively seeking damages ranging from $761 million to $924 million, according to Judge Shelby’s order. This ruling allows the growers to pursue their claims together, potentially impacting how Pilgrim’s Pride and other companies in the poultry industry manage their pricing strategies.

HEALTH UPDATE

— Ascension, a St. Louis-based nonprofit that operates a network of 140 hospitals across 19 states, is currently grappling with a significant cyberattack. This incident has disrupted various crucial systems, including electronic health records, some phone systems, and the platforms used to order tests, procedures, and medications. As a result, the organization has been forced to divert ambulances from several hospitals due to these operational challenges.

This cyberattack is part of a larger pattern of recent security breaches affecting healthcare networks across the United States. For example, a ransomware attack in February targeting Change Healthcare, a major healthcare service provider, disrupted billing operations at pharmacies nationwide and posed severe financial threats to some healthcare providers. The severity of that attack led its parent company to pay a $22 million ransom to secure patient data.

POLITICS & ELECTIONS

— How big (or small) is the 2024 electoral college playing field? Here is how Amy Walter of the Cook Political Report answers that question: “Donald Trump’s strength among Latino and Black voters makes it harder for Joe Biden to once again carry swingy Sun Belt states like Nevada, Arizona and Georgia, leading many to believe Biden’s only path to 270 electoral votes runs through the “Blue Wall” states of Pennsylvania, Wisconsin and Michigan. However, it’s not so much that Trump is doing better in the Sun Belt than the Rust Belt, but rather that Biden is doing a bit worse in states like Nevada and Arizona than he is in Wisconsin or Pennsylvania.”

OTHER ITEMS OF NOTE

— Cotton AWP falls under 60 cents. The Adjusted World Price (AWP) for cotton fell to 59.64 cents per pound, effective today (May 10), under 60 cents for the first time since the week of Dec. 11, 2020, when it was 58.17 cents per pound. This marked the tenth weekly decline in the price used to determine LDPs for cotton. Meanwhile, USDA said that Special Import Quota #4 will be established May 16 for the import of 35,277 bales of upland cotton, applying to supplies purchased no later than Aug. 13 and entered into the U.S. no later than Nov. 11.

KEY LINKS

Policy Updates