Rep. Thompson Derides Meat Investigator’s Office as ‘More Cops for Cows’

Sugar futures rise on reports India plans to cap exports and Brazil fuel hike

Juneteenth market holiday Monday. Today will be the last trading session before a three-day weekend, with a new market holiday. Juneteenth commemorates the end of slavery in America, but it wasn’t observed last year as President Biden signed a bill making it a federal holiday two days before June 19.

USDA daily export sales: 144,907 metric tons of corn for delivery to Costa Rica during the 2022-2023 marketing year; 105,664 metric tons of corn for delivery to unknown destinations during the 2021-2022 marketing year.

Odds of a recession are rising fast with Fed Chair Jay Powell attempting to tackle inflation by reducing demand in a supply-constrained world (and risking labor market gains in the interim). The shakeup saw the Dow tumble below the key 30,000 level for the first time since January 2021, while the S&P 500 and Nasdaq plunged further into bear market territory. Meanwhile, a survey out today also signals more executives are concerns about a recession. More than 60% of CEOs expect a recession within 12 to 18 months in the region where their company operates, and an additional 15% think their region is already in recession, according to a Conference Board survey of 750 CEOs and other C-suite executives conducted in May.

President Joe Biden said in an interview that a recession is “not inevitable” and that the U.S. is in a stronger position than any other nation to overcome rising inflation. Biden also described GOP claims that Covid-19 stimulus spending was fully to blame for inflation as “bizarre,” and argued that rising inflation in other nations demonstrates that higher U.S. consumer prices are not solely the fault of his administration.

Mortgage rates hit a 14-year high, as 30-year fixed-rate mortgages soared to 5.78% this week, up from 5.23% a week earlier, according to data released from Feddie Mac. Although home prices have yet to subside, sales have slowed: the National Association of Realtors reported that existing-home sales fell for the third consecutive month in April, and Census Bureau data showed housing starts were down 14.4% in May compared to April.

Russian forces are intensifying airstrikes and shelling from artillery as they seek to take full control of Severodonetsk, one of the last major cities not under Russian control in the eastern Luhansk region. Ukrainian troops are nearly cut off, but Russian forces are struggling to push them off the territory of a chemicals factory there.

The EU opened the way for Ukraine one day to join the bloc, recommending it be recognized as an official candidate. We have more details in Russia/Ukraine Section.

Not much headway on Ukraine grain exports. Ongoing negotiations produced no major breakthroughs on restarting grain exports via Ukrainian ports. Russia reiterated it will provide “humanitarian corridors” from Ukrainian ports but said its Kyiv’s responsibility to de-mine the waters around those terminals. Reuters reported Russian Leader Vladimir Putin saying there is risk Ukrainian grain could be used to pay for weapons. Meanwhile, Russia continued to attack Ukrainian food supplies being shipped via rail and truck, signaling it has no intentions of allowing grain exports to broadly restart.

Battle over House Dems’ Lower Food and Fuel Costs Act going nowhere. Reason: It won’t have enough votes in the Senate to reach 60 votes. But the bill that includes several measures to temper inflation and establish a special investigator at USDA for meat and poultry cleared the House 221-204. We list the Dems voting against it and the GOP members voting for it. House Ag ranking member Rep. G.T. Thompson (R-Pa.) derided the meat investigator’s office as “more cops for cows.”

Biden signs ocean shipping reforms into law. Ocean carriers will be barred from unreasonably refusing to load U.S. cargo, a practice that blossomed during pandemic-related port congestion, under a bill signed into law by President Biden on Thursday.

With U.S. rice prices not experiencing the rapid rise like most other commodities, but rice producers are coping with much higher input prices, some are asking why the U.S. hasn’t bought some of the crop for U.S. food aid in a win-win situation.

A loophole hides the size of the trade deficit with China. Details in China Section.

Focus continues on the purchase of an electric car by Senate Ag Chair Debbie Stabenow (D-Mich.). We have the background on the topic in the Energy Section.

A heat wave sent dozens of people to the hospital in parts of the U.S. and killed thousands of cattle in Kansas.

Capitol-riot hearing. The House committee investigating the Jan. 6, 2021, U.S. Capitol attack heard testimony Thursday about then-President Donald Trump’s efforts to persuade Vice President Mike Pence to block Joe Biden’s win. Separately, the Justice Department said the committee is hampering its separate investigation by not sharing transcripts of witness interviews.

Elon Musk told Twitter employees that he wants to dramatically increase the number of users and didn’t rule out layoffs as he works to complete his planned $44 billion takeover.

Markets, gov’t offices closed Monday. Markets and government offices are closed for the Juneteenth federal holiday on Monday, June 20. Originating in Galveston, Texas, it has been celebrated annually on June 19 in various parts of the U.S. since 1865. The day was recognized as a federal holiday on June 17, 2021, when President Joe Biden signed the Juneteenth National Independence Day Act into law. The holiday commemorates the Emancipation Proclamation in the U.S. President Abraham Lincoln issued the proclamation to free enslaved African Americans in secessionist states on January 1, 1863, but enslaved people in Galveston, Texas, would not learn of their freedom until two years later.

Equities today: Global stock markets were mixed overnight. The U.S. Dow is currently around 220 points higher. In Asia, Japan -1.8%. Hong Kong +1.1%. China +1%. India -0.1%. In Europe, at midday, London +0.8%. Paris +1.3%. Frankfurt +1.3%.

An ugly equities week thus far. Heading into today’s open, the Dow was down 4.7% for the week, on track for its worst weekly loss since October 2020. The S&P 500 has fallen 6% for the week, on course for its worst week since March 2020, the month the World Health Organization declared Covid a pandemic. The Nasdaq was down more than 6% for the week.

U.S. equities yesterday: The Dow dropped 741.46 points, 2.42%, at 29,927.07. The Nasdaq lost 453.06 points, 4.08%, at 10,646.10. The S&P 500 declined 123.22 points, 3.25%, at 3,666.77.

Agriculture markets yesterday:

• Corn: July corn futures rose 14 1/4 cents to $7.88 1/4, the contract’s highest closing price since May 17, while December corn rose 14 cents to $7.35.
• Soy complex: July soybeans rose 15 3/4 cents to $17.09 1/2, while November soybeans rose 19 3/4 cents to $15.43 1/4. July soymeal surged $12.20 to $429.70. July soyoil fell 133 points to 76.34 cents, a two-month low.
• Wheat: July SRW wheat rose 28 1/4 cents to $10.78 1/4. July HRW wheat rose 15 1/4 cents to $11.48 1/2. July spring wheat rose 7 3/4 cents to $12.09.
• Cotton: July cotton rose 35 points to 143.53 cents and December cotton rose 131 points to 119.23 cents.
• Cattle: August live cattle fell 50 cents to $136.30. August feeders tumbled $1.975 to $171.30. Choice beef cutout values fell $1.02 early Thursday to $267.20.
• Hogs: April lean hogs July lean hogs surged $1.30 to $109.575, a two-week high. Pork cutout values jumped $4.04 early Thursday to $108.83. The CME Lean Hog index, already at a 10-month high at $108.57, is expected to rise another 18 cents today.
  

Ag markets today: Corn and soybean futures saw active followthrough buying overnight after strong gains Thursday, while the wheat market pulled back. As of 7:30 a.m. ET, corn futures were trading 6 to 9 cents higher, soybeans were 6 to 8 cents higher, winter wheat futures were 4 to 7 cents lower and spring wheat was 1 to 4 cents lower. Front-month U.S. crude oil futures were just below unchanged and the U.S. dollar index was more than 700 points higher this morning.

Technical viewpoints from Jim Wyckoff:

On tap today:

• Fed Chairman Jerome Powell gives welcoming remarks at a conference on the international roles of the U.S. dollar. (8:45 a.m. ET)
• U.S. industrial production is expected to rise 0.4% in May from the previous month, down from 1.1% in April. Capacity utilization is expected to rise slightly to 79.2%. (9:15 a.m. ET)
• CFTC Commitments of Traders report, 3:30 p.m. ET.

Recession fears surge among CEOs, survey signals. More than 60% of executives see a recessionary period in next 12 to 18 months, according to the Conference Board survey, the WSJ first reported (link). Most top executives say they think a recession is looming or already here, according to the new survey, reflecting a rapid deterioration of the economic outlook among business leaders. More than 60% of CEOs expect a recession in their geographic region in the next 12 to 18 months, according to a survey of 750 CEOs and other C-suite executives released Friday by the Conference Board, a business research firm. An additional 15% think the region of the world where their company operates is already in a recession. In late 2021, 22% of CEOs surveyed by the firm reported seeing recession risk. That total was down from 39% a year earlier. The survey, which is based on data collected in May, was conducted before the Federal Reserve on Wednesday approved its largest interest-rate increase since 1994 and Fed officials said it was becoming more difficult to tame inflation while avoiding a recession.

Fannie Mae slashes its forecasts for home sales amid soaring interest rates. The government-backed mortgage company now expects total home sales to fall 13.5% to 5.96 million units this year, compared with a projected drop of 11.1% in its May forecast. Fannie also cuts its 2023 forecast to 5.29 million units from 5.42 million, saying substantially higher mortgage rates are now the housing market’s primary constraint. Fellow lender Freddie Mac says the 30-year fixed-rate mortgage is now averaging 5.78%, up from 5.23% last week and 2.93% a year ago, marking the biggest one-week increase in its survey since 1987.

Outlook: Home sales data next week may offer clues as to how big the correction might be.

More signals of a slowing U.S. economy. U.S. housing starts fell 14.4% to a seasonally adjusted annual rate of 1.549 million, the Commerce Department said, well below expectations. And a survey by the Federal Reserve Bank of Philadelphia found manufacturing activity contracting for the first time in two years. Combined with Wednesday’s report of a 0.3% decline in May retail sales over the previous month, the evidence is clear that the U.S. economy is slowing.

Tracking the economy. A tracker produced by the Federal Reserve Bank of Atlanta now estimates a flat growth rate while IHS Markit sees a 0.8% growth rate, down from 2.4% earlier this month. The U.S. economy contracted 1.5% in the first quarter. Another contraction in the second quarter would fit the usual definition of a recession. Technically, an academic group known as the National Bureau of Economic Research is in charge of declaring the official start and end of a recession. The group defines a recession as a “significant decline in economic activity that is spread across the economy and lasts more than a few months.”

Market perspectives:

• Outside markets: The U.S. dollar index is solidly higher in early trading. The yield on the 10-year U.S. Treasury note is fetching 3.21%. Gold and silver are seeing light pressure before U.S. trading, with gold around $1,847 per troy ounce and silver around $21.82 per troy ounce.

• Crude oil futures: U.S. crude was around $116.90 per barrel and Brent was around $119.30 per barrel.

• Freeport plant outage impacting U.S. LNG plan for Europe. The explosion and resulting outage at Freeport LNG’s Gulf Coast terminal puts a major damper on the Biden administration’s campaign to get more natural gas to Europe, where supplies are even tighter now that Russia’s Gazprom is reducing flows to Germany and Italy. Freeport earlier this week said it was extending the timeline of the outage through “late 2022,” effectively taking its full 2.13 billion cubic feet per day of capacity off the market for months. The company said it’s aiming to be partially back online within 90 days. President Biden and European Commission President Ursula von der Leyen formed their joining U.S./EU Task Force for Energy Security on March 25, with a focus on negotiating more LNG volumes for the EU from the world’s top suppliers, including the United States. Biden committed to helping meet an additional 50 billion cubic meters of European gas demand with U.S. LNG beginning next year through the end of the decade. This year’s target is 15 bcm of additional LNG from the U.S. and other producers. Freeport is typically responsible for around 16% of export capacity. A spokesperson for the Department of Energy said the department is hopeful that Freeport can reopen as quickly as possible and noted that Venture Global’s project at Calcasieu Pass, which will provide 1.41 bcf per day of capacity, is expected to be fully online later in the year. “We expect all other U.S. LNG projects to continue to safely export close to their operational capacities for the remainder of the year,” the spokesperson said in a statement.

• 11.3 is the average number of days inbound containers waited for rail transport at the ports of Los Angeles and Long Beach in May, up from 9.6 days in April and the highest level since July 2021, according to the Pacific Merchant Shipping Association.

• Sugar futures rose on reports that India plans to cap exports, while the board of Brazil’s Petroleo Brasileiro SA approved a gasoline and diesel price increase that could divert more cane into ethanol production, Bloomberg reported. India could cap shipments at 6 million to 7 million tons in the season starting October. The No. 2 sugar exporter previously imposed a cap of 10 million tons for this season as a precautionary measure to protect its own food supplies. Bloomberg noted the gasoline and diesel price increases in Brazil could “neutralize” a bill that capped a state tax on fuel, making it more lucrative for mills to process more cane into sugar rather than ethanol, said Michael McDougall, managing director at Paragon Global Markets LLC. Petrobras’s decision is the “more immediate” reason that lifted the sugar market, McDougall said. The South American country is the world’s biggest producer and consumer of cane-based ethanol.

• U.S. has seen more than 1,853 heat records broken in past seven days. The low pressure, rain and cooler temperatures that have set up across the Pacific Northwest and northern New England so far this season have allowed the high pressure and heat to build up across the central U.S. High winds and thunderstorms have helped knock out power to thousands across the Midwest. As temperatures and humidity drop in eastern and central U.S., the heat will begin building again across Colorado and Nebraska and push up into the northern Great Plains. Thursday’s heat advisories stretched from Kansas to West Virginia and between Indiana and Florida. An estimated 10,000 head of beef cattle died of heat stress in Kansas feedlots this week.

• NWS weather: Father’s Day weekend coming in hot off the grill for dads in the Heartland & South as sizzling heat & humidity persist; “Cool” dads in the Northeast & along the West Coast courtesy of abnormally cool temperatures... ...Approaching cold front to ignite scattered showers & storms from the Mid-Mississippi Valley to the Southeast coast Friday, stormy in Florida on Saturday; Upper trough to generate showers &storms in the Northwest... ...Early season monsoonal t-storms over parts of the Central/Southern Rockies & Southwest; A Critical Risk of fire weather over parts of the Great Basin into the Southwest both Friday & Saturday.

Items in Pro Farmer’s First Thing Today include:

• Followthrough buying in corn and soybeans, wheat fades
• Slow progress on restarting grain exports via Ukrainian ports (details next section)
• Eurozone confirms record inflation in May
• French wheat crop ratings decline again
• Exchange warns of further cuts to Argentine wheat acreage
• Malaysia keeps July crude palm oil export tax at max level
• Retailers buying beef – at lower prices
• Big jump in pork cutout but movement slows

— Summary: Russia just widened its attack on Ukrainian food supplies, bombing a train near Donetsk carrying dozens of pallets of food en route to chef José Andrés’ aid group World Central Kitchen. Meanwhile, the leaders of France, Germany and Italy were in Kyiv together to deliver what they called a “message of European unity” amid criticism the bloc is not doing enough.

• European Commission backs EU candidate status for Ukraine, Moldova. The assessment is based on an understanding that both countries will carry out major reforms. A meeting of the European Commission next week that will decide on recommending Ukraine’s “EU candidate status” — the first step for a country to enter the bloc. Joining the EU is a process that usually takes years, or even decades, but Ukraine leader Zelenskyy is hoping to fast-track the negotiations. Countries have to meet strict criteria, from economic stability and a functioning market economy to rooting out corruption and respecting human rights. Candidate status is conferred by the European Council, following which there are extensive talks on the reforms needed before a nominee could be considered for membership by all 27 EU governments.

• So far, the U.S. and allies have given Ukraine almost 97,000 anti-tank systems, America’s top military officer, Joint Chiefs Chairman Army Gen. Mark Milley, told reporters Wednesday during the first of two days of defense talks with top Ukrainian military officials in Brussels. That’s “More anti-tank systems than there are tanks in the world,” he said. “They asked for 10 battalions of artillery; 12 battalions of artillery were delivered,” Milley continued. “They asked for 200 tanks; they got 237 tanks. They asked for 100 infantry fighting vehicles; they got over 300. We’ve delivered, roughly speaking, 1,600 or so air defense systems and about 60,000 air defense rounds.”

  Outlook: “It’s a fair statement to say that [Russian forces are] gaining ground tactically, but it’s very, very slow,” he told NPR in a short interview on Wednesday.

  “War takes many, many turns,” he told reporters in Brussels. “The Ukrainians are fighting them street by street, house by house.” But right now and in the days ahead, he warned, “I would say that the numbers clearly favor the Russians.” Still, “The Russians have lost probably somewhere in the tune of 20 to 30 percent of their armored force,” the chairman said, and added, “That’s significant. That’s huge. So the Ukrainians are fighting a very effective fight tactically with both fires and maneuver.”
  

— Market impacts:

• Slow progress on restarting grain exports via Ukrainian ports. Russia is in contact with Turkey regarding the export of grain from Ukraine but there are a lot of uncertainties from the Ukrainian side, Kremlin spokesperson Dmitry Peskov told reporters on Friday. France’s president said he saw little chance of an agreement with Russia for now to get grain out the Ukrainian port of Odesa but said there were talks to regenerate rail routes linking Odesa to the Danube River in Romania as an alternative.
• U.S. will help build grain bins for Ukraine to help with the looming food crisis from Putin’s invasion, President Joe Biden said Tuesday. The idea is to circumvent Russia’s Black Sea blockade by using Ukraine’s rail system to ship tons of Kyiv’s delayed grain exports to at least some of the world’s markets. “Since late February, Ukraine has been shipping agricultural exports via rail, road, and river routes at a fraction of its previous seaport capacity,” the Center for Strategic and International Studies reported Wednesday in a new analysis (link) featuring satellite imagery of a destroyed rail bridge and food warehouse. “Tens of millions of tons of agricultural products are blocked in port cities, alternate export routes face bottlenecks in neighboring states, and Ukrainian farmers are quickly running out of storage for harvested grain.”
• U.S./Ukraine ag pact. The U.S. and Ukraine agreed to a three-year partnership to rebuild and strengthen the agriculture and food sectors in Ukraine, said USDA Secretary Tom Vilsack. Link for details.
• Unintended consequences: U.S. National Security Adviser Jake Sullivan was caught on a hot mic on Thursday lamenting one of the unintended consequences of the international sanctions campaign against Russia: government maintenance of seized oligarch yachts. “You know what the craziest thing is? When we seize one, we have to pay for upkeep,” Sullivan said in conversation about the yachts at a think tank event. “The federal government pays for upkeep because under the kind of forfeiture rubric, so like some people are basically being paid to maintain Russian superyachts on behalf of the United States government.” As Business Insider reports (link), that work is usually done by the U.S. Marshals Service, which is charged with keeping seized property in good condition.

— Battle over House Dems’ Lower Food and Fuel Costs Act going nowhere… for now. Reason: It won’t have enough votes in the Senate to reach 60 votes. But the bill that includes several measures to temper inflation and establish a special investigator at USDA for meat and poultry cleared the House 221-204.

Only seven Republicans voted for the plan while five Democrats voted against the measure.

Republicans voting for the package included Reps. Don Bacon (Neb.), Randy Feenstra (Iowa), Ashley Hinson (Iowa), Dusty Johnson (S.D.), Adam Kinzinger (Ill.), Mariannette Miller-Meeks (Iowa), and Vicky Hartzler (Mo.).

Democrats voting against included Reps. Henry Cuellar (Texas), Pete DeFazio (Ore.) Peter Welch (Vt.), Vincente Gonzalez (Texas) and Seth Moulton (Mass.).

Rep. G.T. Thompson (R-Pa.), ranking member of the House Ag panel, criticized the meat investigator’s office as “more cops for cows.” The bill was “an attempt to score political points” by blaming meatpackers for inflation but would have no immediate effect on prices, said Thompson. Other Republicans said the investigator, rather than giving farmers and ranchers more leverage in dealing with the meatpackers, would harass them. “This should be the easiest ‘no’ vote you make,” said Rep. Rick Crawford (R-Ark.).

The legislative package would:

• Provide $500 million in emergency funding to cover the costs of adopting nutrient management or precision agriculture practices that support agricultural production.
• Provide $200 million in emergency funding for competitive grants to expand biofuel infrastructure.
• Modify a waiver to allow for higher percentage ethanol-based fuels to be sold year-round.
• Establish a USDA office to prosecute anticompetitive practices in the food and agriculture industry.
• Authorize a total of $300 million from fiscal 2023 through 2025 for loans or loan guarantees to increase the capacity of livestock and poultry processing facilities.
• Authorize a total of $60 million through fiscal 2025 for grants to diversify and increase livestock and poultry processing.
• Create a supply chain task force to help the government respond to agriculture and food supply chain disruptions.

Now what? The Senate Agriculture Committee is scheduled to vote next Wednesday on a companion meat investigator bill, S 3870, and on a bill that would require meatpackers to buy a specified number of cattle through transactions that increase price transparency, S 4030.

— Why isn’t USDA buying up U.S. rice for food aid donations via a host of programs both for U.S. and foreign donation? That is what some veteran policy sources are asking. U.S. rice prices have lagged most other U.S. farm products, but producers are paying the same sky-high input prices. Some sources note the food aid announced so far has more transportation costs than the underlying commodity even at current prices. But USDA could ask for an emergency waiver from Jones Act requirements specifying U.S.-flag vessels. (But the Biden administration’s soft spot for unions lower the odds of any major waiver.) As for funding, USDA has several programs they could tap, and there is always the Commodity Credit Corporation funding “pool” but most sources say that would not likely be used for this.

— Soybean group leads coalition letter to USDA on competition in the seed market. The American Soybean Assn. (ASA) this week provided comments to USDA’s request for information on competition in the seed market, “underscoring the need to ensure growers have access to affordable inputs and a healthy market.” In the comments, ASA outlined recommendations regarding the state of the soybean industry, regulatory improvement, intellectual property, and risks of regulatory disruption, but cautioned USDA against jeopardizing long-term market sustainability for short-term gain, considering that seed access and prices are not currently a significant challenge for growers.

ASA comments: “Agricultural inputs, including fertilizer, fuel, seeds, pesticides, among others, are central to how soybean growers produce. To be economically sustainable, farmers need inputs that are affordable and do not exceed the price at which a grower can sell their crop,” ASA states in the letter. “Affordable, sustainable inputs are vital for U.S. growers helping to feed a growing global population. In this current production environment in which input prices are high and global input and food supplies have dwindled due to the ongoing supply chain crisis and the invasion of Ukraine, access to affordable inputs is more important than ever.”

ASA also led a coalition comment letter submitted to the docket, highlighting the continued need to promote regulatory modernization for biotechnology and gene editing. The letter supports continued regulatory improvements for these technologies as a means to reduce market barriers for new participants in the seed and trait development industries.

More comments: “Renewed efforts from USDA to further implement its own rulemakings, drive pro-innovation policies from coregulators, and press for an international regulatory framework conducive for trade and swift, science-based regulatory decisions will spur further innovation and development unlike any other action the department can take,” the groups state in the letter. “We hope to partner with USDA to advance these efforts to ensure a healthy supply of innovative solutions will be available to meet the needs of farmers, consumers, and our environment for decades to come.”

— U.S. State Department is expected to announce a new envoy for racial justice in the coming days, a post that is aimed at empowering marginalized racial and ethnic communities around the world. Desirée Cormier Smith, currently a senior advisor in the State Department’s Bureau of International Organization Affairs, is expected to be appointed to the newly created Special Representative for Racial Equity and Justice post. The Biden administration has stated that advancing racial equity and justice is a key foreign-policy priority.

— Plan to bolster infrastructure workforce to be unveiled. The Biden administration is taking steps to ensure there are enough trained workers ahead of the expected flood of new construction work created by the bipartisan infrastructure law. Members of the administration, including Labor Secretary Marty Walsh, will announce today a summer-long “Talent Pipeline Challenge” that would connect employers to organizations that offer job training, such as unions, industry associations, and community colleges, senior administration officials said on a press call Thursday. The effort also encourages state and local government to use funding from the infrastructure law and the American Rescue Plan to invest in opportunities to provide workers with training to support industries that will see increased demand under new infrastructure investment and workers acutely affected by the pandemic, according to a fact sheet.

— A loophole hides the size of the trade deficit with China. Official U.S. statistics on trade with China don’t include the value of roughly 800 million shipments a year that arrive in the U.S. under a set of rules known as de minimis — Latin for too small to be bothered with. They apply to individual imports valued under $800. Their impact was long assumed to be trivial, but then came the rise of e-commerce. A WSJ report (link) says c\Correcting the statistics to account for those shipments suggests that since the trade war with China, the deficit has barely budged — and may have grown.

— Finally, success at the WTO. In a big show of unity for the World Trade Organization (WTO), several deals were inked deep into overtime at the group’s twelfth ministerial meeting in Geneva. “The outcomes demonstrate that the WTO is in fact capable of responding to emergencies of our time,” announced Director-General Ngozi Okonjo-Iweala. It took nearly five days of wrangling, but delegates cheered after they passed a package of six agreements, which could put renewed momentum behind the $28 trillion global trading system.

• Under an arrangement known as compulsory licensing, member countries agreed to a vaccine patent waiver to boost supplies of Covid-19 shots to lower income countries.
• Another deal was reached on overfishing after India insisted on a 25-year exemption based on its status as a developing country. Nations will be prohibited from providing subsidies for illegal or unreported fishing, as well as financial aid to vessels fishing in unregulated international waters. The agreement was the culmination of two decades of negotiations and the first regulated trade deal ever reached at the WTO on sustainability grounds.
• Trade ministers temporarily extended duty-free trade in digital products like music and movies. Without renewing the 1998 accord, higher prices could have been in store for cross-border purchases made by customers of Amazon Prime, Apple Music and Netflix.

— Those electrifying Democrats. Several Democrats, including Sen. Debbie Stabenow (D-Mich.), have made the case for switching to electric vehicles as a means of avoiding high gas costs. Republicans labeled that as “out of touch” with average consumers. Reason: The disparity between the average electric vehicle costs and the median household income. In Michigan that stands at $59,234, according to data from the U.S. Census Bureau. According to Kelley Blue Book, the average cost of an electric vehicle is $56,437, or roughly $10,000 more than the industry average. According to data from the U.S. Census Bureau, the median household income is $67,521.

Electrifying Biden Cabinet. In an interview Tuesday, Energy Secretary Jennifer Granholm noted high gas prices make a “very compelling case” for drivers to buy electric vehicles. “If you filled up your EV, and you filled up your gas tank with gasoline, you would save $60 per fill-up [by going electric],” said Granholm, the former governor of Michigan whose net worth is estimated to be about $8 million.

Back to Stabenow. She recently said it “doesn’t matter” how high gas prices go because she drives an electric vehicle. Speaking during a Senate Finance Committee meeting, Stabenow said of the record-high prices: “I just have to say, on the issue of gas prices, after waiting for a long time to have enough chips in this country to get my electric vehicle, I drove it from Michigan to [Washington, D.C.] this last weekend and went by every single gas station, and it didn’t matter how high it was.” Speaking at a press conference, she said she is “proud” of her new Chevy Bolt, which she touted as “terrific.” Stabenow added: “As somebody who just bought my first electric vehicle, I’m driving by the pump. And I won’t tell you the motion I’m making when I drive by.”

Perspective: Ford F-150 gas pickup starts at $30,000. Cheapest F-150 EV: $39,000, $9,000 buys you a lot of gas, even at these prices… except for in California. Just saying. $9,000 buys you 1,800 gallons of gasoline at $5 per gallon. So that’s $39K for a base EV F-150 plus another $2.5K to $6K for a charging station. So $40K to $44K before you drive more than 250-300 miles. And how much do those charging stations that are not yours cost to use?”

Bloomberg: The electric version of Ford Motor Co.’s best-selling F-150 truck is poised to sweep rural America and tip the U.S. market for EVs, President Joe Biden’s infrastructure czar predicted. “You all are gonna be driving Ford F-150s with electric batteries in them. That’s how that’s gonna work,” Mitch Landrieu, the former New Orleans mayor, said in an interview with Bloomberg News reporters and editors Wednesday. “And rural America’s going to beat everybody to the punch — my prediction,” he said. And you don’t have to buy a gasoline pump to drive gasoline powered vehicle.

More on EV pricing. EVs now average over $60,000 as Tesla, Rivian, Ford raise prices. Market leader Tesla Inc. is boosting sticker prices by as much as $6,000 a car, its third increase this year, Electrek reported. Ford Motor Co. has raised the price of its Mustang Mach-E, following a similar move by electric-truck startup Rivian Automotive Inc. The average price of an EV reached $60,984 last month, well above the $46,634 mark for the overall market, according to automotive researcher Edmunds.com. That average excludes Tesla, which doesn’t share pricing data with research firms, but Electrek reported that the popular Model Y long-range model now starts at $65,990, up from $62,990.

One reason for rising cost of EVs: Surging battery materials costs have wiped out the profit Ford had expected to make on its electric Mustang model.

Comments: What about all those people who would never drive a Ford over their dead bodies! There’s something called brand loyalty that Landrieu doesn’t apparently think is real. This is what some call Elitist thinking. One farmer texted: “Our neighbor has a Prius. But he has to take it in to dealer 2x a year to get all the panels removed and all the road dust taken out of it. Not everyone in rural America lives on a hard surface road. And some of the panels have just disappeared because of gravel or have holes in them.”

— Summary:

• Global Covid-19 cases at 537,880,995 with 6,315,850 deaths.
• U.S. case count is at 86,058,303 with 1,012,647 deaths.
• Johns Hopkins University Coronavirus Resource Center says there have been 592,269,252 doses administered, 221,924,152 have been fully vaccinated, or 67.35% of the U.S. population.

— FDA authorizes Covid-19 vaccines for younger children. The Moderna and Pfizer/BioNTech Covid-19 vaccines are now authorized for emergency use in young children. The US Food and Drug Administration expanded the authorizations for the vaccines Friday to include children as young as 6 months.

— Any vaccination campaign against monkeypox should begin in Africa, public health agencies warn, amid worries that wealthy countries will repeat the missteps of the Covid-19 pandemic.

— French President Emmanuel Macron’s hopes for a smooth second term will be tested this weekend as voters go to the polls for the second and final round of parliamentary elections. Macron’s Ensemble coalition could fall short of an absolute majority if the leftwing NUPES coalition, led by defeated presidential candidate Jean-Luc Mélenchon, can continue to attract voters. Marine Le Pen’s far right National Rally is expected to receive fewer votes but still do relatively well, with polls showing her party is set to pass the 15-seat threshold needed to form an official group in parliament, something it hasn’t done for decades.

— Who will be the Dems’ presidential candidate in 2024? Despite very low ratings currently, President Joe Biden still leads all other potential challengers by a good margin. In the latest Zogby Poll, Biden’s support among Democratic voters is 41%. His only weakness appears to be among younger voters. Former first lady Michelle Obama, who has signaled no interest in running, remains in second at 16% followed by Vice President Kamala Harris at 11%.

Should Biden, who would be 81 on Election Day 2024, decide against running, the race tightens to Obama at 21%, Harris at 19% and former first lady Hillary Rodham Clinton at 11%. Current first lady Jill Biden surprised at 7%. Among most voting groups polled by Zogby Analytics, Obama slightly edges out Harris, said the poll analysis from Jonathan Zogby.

— House Ag Committee announces farm bill listening session in California. House Agriculture Chairman David Scott (D-Ga.) announced the second in a series of listening sessions entitled “A 2022 Review of the Farm Bill: Perspectives from the Field.” The second session in this series will take place at 11:00 a.m. PT (2:00 p.m. ET) at California State University, Fresno in Fresno, California on Thursday, July 7. It will be hosted and chaired by House Agriculture Subcommittee Chair Jim Costa of California. This event is open to the public. Additional dates and locations will be announced in the coming weeks.

— Another item going up in the year of inflation: earmark requests. House appropriators fielded more earmark requests for more money for fiscal 2023 than the previous year, but stalled negotiations over top-line spending figures create uncertainty around how much funding will be available. Members of the House Appropriations Committee advanced six of their 12 annual funding bills through subcommittee markups this week, including earmarks in five of the bills so far. In the second year of the newly revived earmarking system, House members submitted requests for 74% more funds in fiscal 2023 compared to their 2022 requests. Nearly 80% of the House — 345 lawmakers — submitted 4,761 earmarks requests in fiscal 2023 appropriations bills totaling $12.4 billion, according to a list published by the House Appropriations Committee. That includes 224 Democrats who submitted 3,326 requests totaling nearly $6.9 billion, and 121 Republicans who submitted 1,435 requests totaling more than $5.5 billion. The funding amount of the House requests is a 74% increase over fiscal 2022, when the committee fielded 3,019 requests totaling $7.1 billion. The final fiscal 2022 omnibus spending package included 4,975 earmarks totaling nearly $9.7 billion, including 2,449 earmarks requested solely by House members, which totaled $3.6 billion. House members were allowed to submit up to 15 requests each for fiscal 2023, up from 10 in fiscal 2022.

— U.S. defense budget largest ever. The world’s largest national defense budget is about to get even bigger as U.S. senators added a further $45 billion to the original White House budget request, putting the final figure at $847 billion. Sen. Jack Reed (D-R.I.), chair of the Senate Armed Services Committee said the increase, which would make for the largest U.S. defense budget in history, was driven by inflation, the war in Ukraine, and a need to increase the country’s weapons stockpile. The number is not final, with the House of Representatives and the Senate Appropriations Committee still needing to weigh in.

— Senate gun legislation delayed. Senators drafting legislation to reduce gun violence failed to overcome sticking points before breaking for the weekend.

— Thursday’s Jan. 6 Capitol riot hearing centered on how former President Trump kept pressuring Vice President Mike Pence to overturn the election results — despite Pence’s insistence he couldn’t and even Rudy Giuliani’s skepticism. One key Trump advisor pushing the Pence theory was lawyer John Eastman, who would later seek a presidential pardon.

— Cotton AWP rises. The Adjusted World Price (AWP) for cotton increased to 140.47 cents per pound, effective today (June 17), up from 134.41 cents per pound the prior week and back above 140 cents for the first time since the week of May 20. Meanwhile, USDA said that Special Import Quota #9 will be established June 23 for 50,978 bales of upland cotton, applying to supplies purchased no later than Sept. 20 and entered into the U.S. not later than Dec. 19.

— Musk addresses Twitter employees about his bid to buy company. Elon Musk addressed Twitter employees for the first time Thursday, suggesting the company would need to reduce head count but offering few other new details about his $44 billion buyout offer. Musk appeared via a video call in what turned out to be a freewheeling question-and-answer session moderated by a Twitter executive. The CEO of Tesla and SpaceX, Musk mused about the existence of aliens and other space civilizations. He also expressed his view that Twitter should help “civilization and consciousness.” Last week, Musk warned Twitter he might walk away from his bid, if the company failed to provide more data on spam and fake accounts.