Senate Ag Panel Dems Come Out Swinging Against GOP Farm Bill Ideas

SCOTUS into July | Goodbye Dali | China warning | WRDA | Primaries | SAF | House has new GOP member | Bayer

Jim Wiesemeyer

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June 25, 2024 08:52 AM

Today’s Digital Newspaper

MARKET FOCUS

Nvidia’s stock price fell 13% in three-day rout
Oil prices increased 1% on Monday
Federal Reserve three-page document re: potential changes to bank-capital overhaul
SF Fed President Mary Daly warns U.S. labor market approaching inflection point
Fed Gov Bowman notes support for more interest rate hikes if inflation remains high
Canada’s annual inflation rate rose to 2.9% from April’s three-year low of 2.7%
Japanese officials again warn about potential intervention if yen’s volatility persists
Malaysian palm oil futures fell nearly 1%
Competition in U.S. trucking market is intensifying, leading to industry attrition . The Wall Street Journal reports (link) the latest casualty is niche operator U.S.
In May 2024, Port of Brunswick set a record
Ag markets today
Thailand approves subsidy for rice farmers
Cordonnier addresses potential lost acreage due to flooding
USDA daily export sale: 209,931 MT corn to Mexico.
- Of the total, 22,098 MT during 2023-2024 MY, 187,833 MT 2024-2025 MY
Ag trade update
South Texas in dire need of rain as Tropical Storm Alberto falls short of precip
NWS weather outlook
Pro Farmer First Thing Today items

BALTIMORE BRIDGE COLLAPSE

Dali departs Port of Baltimore

CONGRESS

House Speaker will swear in Rep.-elect Michael Rulli (R-Ohio) today
Louisiana and New York to gain most from new House WRDA legislation

POLICY

Senate Ag Committee Democrats on farm bill: ‘It’s time to get real.’
House farm bill includes provision that shields Bayer from lawsuits re: Roundup

CHINA

Chinese Premier warns of global negative consequences in decoupling economically
China’s love affair with coal continues

TRADE POLICY

U.S. and Mexico agreed on security plan re: avocados and mangos

ENERGY & CLIMATE CHANGE

\U.S. and Europe can’t agree on what counts as sustainable aviation fuel

LIVESTOCK, NUTRITION & FOOD INDUSTRY

H5N1 avian flu confirmed in 121 dairy herds, USDA expects more cases amid heat
$60 mil. program to boost healthy food access in underserved communities
Vilsack expected to announce new livestock competition regulation today
Denmark set to implement a carbon tax on livestock producers

HEALTH UPDATE

Novo Nordisk will invest $4.1 billion to build second facility in North Carolina

POLITICS & ELECTIONS

Primary focus: Rep. Jamaal Bowman (D-N.Y.) & Rep. Lauren Boebert (R-Colo.)
Race between Rep. Bob Good and state Sen. John J. McGuire in Vs. “too close to call”

OTHER ITEMS OF NOTE

FSIS releases updated guidance on residue prevention
SCOTUS rulings to go into July

MARKET FOCUS

— Equities today: European equity markets were lower on Tuesday, reversing from gains the day before, fueled by caution after a tech sell-off in the U.S. The technology sector was among the worst performers. In Asia, Japan +1%. Hong Kong +0.3%. China -0.4%. India +0.9%. In Europe, at midday, London -0.2%. Paris -0.7%. Frankfurt -1.1%. U.S. Dow opened slightly lower and is currently down around 90 points.

U.S. equities yesterday: The Nasdaq and S&P 500 opened the week with losses while the Dow registered a solid gain. The Dow was up 260.88 points, 0.67%, at 39,411.21. The Nasdaq lost 192.54 points, 1.09%, at 17,496.82. The S&P 500 fell 16.75 points, 0.31%, at 5,447.87.

— 13%: That’s how far Nvidia’s stock price has fallen in a three-day rout, crossing the technical threshold of a correction. It’s bad timing for a cohort of retail investors who face big losses after they put a record amount into a leveraged-up ETF that delivers double the daily return of NVDA. The high-flying stock lost $500 billion in market cap over the past several sessions, retreating to third place —behind Apple and Microsoft — in the rankings of the most valuable companies on the planet. It’s still up 140% YTD, making it the second-best performer in the S&P 500 Index behind Super Micro Computer, which has nearly tripled in 2024.

— Oil prices increased by 1% on Monday due to strong summer driving demand, geopolitical tensions in the Middle East, and Ukrainian drone attacks on Russian refineries, which raised supply concerns. Additionally, a weaker U.S. dollar made oil more attractive to international buyers. Brent futures for August delivery settled at $86.01 per barrel, and WTI crude settled at $81.63 per barrel. Both benchmarks experienced a 3% rise last week.

— Federal Reserve shared a three-page document with other U.S. regulators outlining potential changes to their bank-capital overhaul, which would ease requirements for Wall Street lenders. These revisions would modify key parts of the initial proposal, particularly affecting large banks with significant trading businesses. While the document doesn’t provide updated estimates, initial calculations suggest the capital increase for large banks could be as low as 5%, down from the originally proposed 16%.

— Ag markets today: Corn, soybeans and wheat traded higher at points overnight but have adopted a mostly weaker tone this morning. As of 7:30 a.m. ET, corn futures were trading 4 to 5 cents lower, soybeans were 2 to 9 cents lower, SRW wheat was 2 to 4 cents lower, HRW wheat was steady to 2 cents lower and HRS wheat was narrowly mixed. The U.S. dollar index was around 150 points higher, and front-month crude oil futures were about 50 cents lower.

Cash cattle fundamentals remain red-hot. The average cash cattle price was a record $194.84 last week, rising $2.29 from the previous week’s high. Over the past two weeks, the cash price has surged $5.92. Wholesale beef prices firmed 25 cents for Choice to $322.64 and $1.96 for Select to $305.07 on Monday. Given hefty packer purchases of cattle recently and next week’s shortened slaughter schedule, cash sources expect prices to be steady at best this week.

Cash hog fundamentals continue to weaken. The CME lean hog index is down another 42 cents to $89.90 as of June 21, marking six of the last seven days with a decline and the lowest level since April 10. July lean hog futures finished Monday a nickel above today’s cash quote while the August contract held a $3.175 discount. The pork cutout fell $1.20 on Monday to $97.83, pressured by sharp declines in butts and loins.

— Agriculture markets yesterday:

Corn: December corn fell 1 1/2 cents to $4.51 3/4 but notched a high range close.
Soy complex: November soybean futures rallied 10 1/2 cents to $11.30 1/2 and settled nearer session highs. August meal futures surged $9.60 to $358.30 and settled on session highs. August bean oil futures sunk 41 points to 43.79 cents.
Wheat: December SRW wheat fell 5 1/2 cents at $5.94 1/4 and near mid-range. Prices hit a three-month low today. December HRW wheat lost 1 3/4 cents at $6.01 1/2, near mid-range and hit a 2.5-month low today. September spring wheat futures sunk 3 1/2 cents to $6.13 3/4.
Cotton: December cotton rose 118 points to 73.39 cents, marking the highest close since June 6.
Cattle: August live cattle rose $1.675 to $184.825, near the session high and hit an eight-month high. August feeder cattle closed up 52 1/2 cents at $258.90 and nearer the session high.
Hogs: August lean hog futures sunk $2.60 to $86.725, marking a fresh contract low close.

— Quotes of note:

San Francisco Fed President Mary Daly warned that the U.S. labor market is approaching an inflection point, where further slowing could lead to higher unemployment. Daly, a voting member on monetary policy this year, indicated that restrained demand might be necessary to bring inflation back to the central bank’s 2% target. Her comments followed those of other officials who stressed the need for more evidence of cooling inflation before considering rate cuts. Earlier this month, Fed officials reduced their projections for 2024 rate cuts from three to just one, based on the dot plot that aggregates policymakers’ forecasts.
Federal Reserve Governor Michelle Bowman expressed support for more interest rate hikes if inflation remains high, citing immigration and aggressive fiscal stimulus as factors likely to keep U.S. prices rising faster than in other wealthy countries. In a speech in London, Bowman stated she is willing to raise borrowing costs again if progress on inflation stalls or reverses. This underscores the ongoing debate within the Fed about the possibility of rate cuts this year, particularly before the Nov. 5 presidential election. While Bowman is among the FOMC’s most hawkish members, she does not see a rate rise this year as the most likely scenario. However, four of 19 committee officials do not expect any rate cuts this year, seven anticipate just one quarter-point cut, and the remaining eight foresee two cuts, influenced by signs of a weakening U.S. economy and easing price pressures. Despite investor bets on a quarter-point cut in mid-September, Bowman highlighted “upside risks” to inflation, including looser financial conditions and federal stimulus potentially boosting demand and stalling inflation progress.
“Each handwritten repair order and parts slip will have to be re-keyed. And each time we re-key something, there is an opportunity to make a mistake.” — Chris Lemley, the head of one of thousands of U.S. car dealers knocked offline by a cyberattack on management software supplier CDK.

— In May 2024, Canada’s annual inflation rate rose to 2.9% from April’s three-year low of 2.7%, defying market expectations of a slowdown to 2.6%. This rate is consistent with the Bank of Canada’s forecast of inflation near 3% in the first half of the year, challenging assumptions that the central bank would continue loosening monetary policy. Prices increased for transportation, particularly air travel, which saw a 4.5% rise. Food inflation also climbed to 2.5%, driven by higher grocery costs. Health and personal care costs rose faster at 3.6%, and declines in household operations, furnishings, and equipment costs slowed to -1.5%. Shelter inflation remained high at 6.4%. Month-over-month, the Canadian Consumer Price Index (CPI) increased by 0.6%.

Market perspectives:

— Outside markets: The U.S. dollar index was higher, with the euro, yen, and British pound all weaker against the U.S. currency. The yield on the 10-year U.S. Treasury note was weaker, trading around 4.23%, with a mostly lower tone in global government bond yields. Crude oil futures were under pressure, with U.S. crude around $81.20 per barrel and Brent around $84.75 per barrel. Gold and silver futures were firmer, with gold around $2,348 per troy ounce and silver around $29.67 per troy ounce.

— Japanese government officials reiterated their warnings about potential intervention if the yen’s volatility persists. Chief Cabinet Secretary Yoshimasa Hayashi emphasized that excessive volatility negatively impacts businesses and households, stating that authorities are closely monitoring currency movements and will respond appropriately. Finance Minister Shunichi Suzuki also highlighted the need for stable currency values, indicating that the government would take suitable action against excessive currency fluctuations. The yen continues to trade near 160 yen to the dollar, the level that prompted government intervention in late April and early May.

— Malaysian palm oil futures fell nearly 1% to around MYR 3,860 per tonne, marking their lowest level since May 27 and continuing a three-session decline. This drop is attributed to decreases in rival oils on the Dalian and Chicago Board of Trade markets. Concerns over weak demand are rising ahead of export data for June 1-25, with shipments for the first 20 days of June shrinking by 8.1% to 12.9%, according to cargo surveyors. Production is expected to remain strong in June, following a six-month high of 1.7 million tons in May. Additionally, India, a major importer, purchased a record 500,000 tons of sunflower oil for June delivery, as competitive pricing from Russia and Ukraine made it cheaper than soyoil and palm oil. However, high crude oil prices, driven by geopolitical risks in Eastern Europe and the Middle East, helped limit the decline. Furthermore, Chinese buyers have booked palm oil deliveries from June to September due to low domestic inventory.

— Competition in the American trucking market is intensifying, leading to significant industry attrition. The Wall Street Journal reports (link) the latest casualty is niche operator U.S. Logistics Solutions, which filed for chapter 7 liquidation and promptly ceased operations, resulting in the loss of about 2,000 jobs and over 500 trucks. This follows the recent closure of truckload carrier Arnold Transportation and is one of the largest failures in trucking since Yellow’s collapse last year. US Logistics, which specialized in pool distribution — transporting goods between distribution centers, its own warehouses, and stores — was particularly vulnerable to the current weak consumer market affecting retailers and their service providers.

— In May 2024, the Port of Brunswick set a record by handling 86,577 units of Roll-on/Roll-off (Ro/Ro) cargo, a 26% increase from May 2023. This surge, more than 18,000 units higher than the previous year, underscores Brunswick’s critical role in the auto industry due to its proximity to domestic manufacturers and vibrant sales markets. Georgia Ports Authority (GPA) President and CEO Griff Lynch highlighted the recent addition of 120 acres of processing space and the availability of more land for development at Colonel’s Island Terminal, enabling it to meet the expanding needs of car manufacturers.

Luxury vehicle exports to China and robust import-export business in finished vehicles to Europe were significant contributors to this growth. In May, auto processors moved over 23,000 auto exports and 54,550 auto imports. High/heavy machinery volumes also saw a substantial increase, with 4,300 units handled, more than tripling GPA’s monthly average for the fiscal year through April. This included 3,440 export units and 860 import units, partly due to the shift of Ro/Ro cargo from Savannah’s Ocean Terminal to Brunswick and the diversion of units normally exported via Baltimore following the Baltimore bridge collapse.

GPA estimates that about half of the machinery increase and 15% of the auto increase in May were related to the Baltimore bridge collapse. Overall, the port’s performance brought Georgia Ports’ volumes for the fiscal year to date (July 1, 2023-May 31, 2024) to 796,000 units of autos and high/heavy machinery, a 20% increase compared to the same period in 2023.

GPA Board Chairman Kent Fountain attributed the growing Ro/Ro volumes to the exceptional work of auto port partners and the reliable service at Brunswick. He thanked manufacturers, ocean carriers, local ILA partners, and auto processors for making Brunswick the nation’s most efficient gateway for autos and heavy machinery. In May, Colonel’s Island Terminal handled 57 vessels, 12 more than in the same month last year.

— USDA daily export sale: 209,931 MT corn to Mexico. Of the total, 22,098 MT during 2023-2024 MY, 187,833 MT 2024-2025 MY.

— Ag trade update: South Korea purchased 135,000 MT of corn expected to be sourced from South America and 65,000 MT of optional origin feed wheat. Egypt canceled a tender to buy 25,000 MT of soyoil, instead purchasing that amount from the domestic market, and tendered to buy an unspecified amount of wheat from multiple sources.

— Thailand approves subsidy for rice farmers. Thailand’s cabinet approved a subsidy of 30 billion baht ($820,000) for rice farmers to buy fertilizer, which is expected to help 4.68 million rice farms. Thailand, the world’s second-largest exporter of the grain after India, earlier said rice exports could reach 8 MMT this year.

— Cordonnier addresses potential lost acreage due to flooding. Crop consultant Dr. Michael Cordonnier says there might be a half million to one million corn acres lost due to the excessively wet conditions and flooding in the northwestern Corn Belt. Those acres will be counted as planted but reflected in a lower harvested acreage percentage, which he believes will be 90.3% to 90.7% this year, down from an average of 91.3%. He says planting soybeans in late June or early July in the northwestern Corn Belt would be “a risky proposition,” as they would flower while the crop is in early development, “resulting in short-stature soybeans with a low yield potential.” For now, Cordonnier left his corn and soybean production forecasts at 14.62 billion bu. and 4.46 billion bu., respectively.

— South Texas is in dire need of rain as Tropical Storm Alberto failed to deliver sufficient precipitation, the Texas Tribune reports (link). The region’s two major reservoirs are at record-low levels, raising concerns about the citrus industry’s survival this summer. The Amistad International and Falcon International reservoirs remain critically low, with the Falcon reservoir at approximately 11% and the Amistad at a record low of about 19%. This water scarcity threatens both agricultural and residential needs.

The situation is exacerbated by Mexico’s drought, which has hindered its ability to meet water delivery obligations to the U.S. under a 1944 treaty. With Mexico falling behind on its commitments, South Texas farmers are hoping for an active hurricane season to replenish the reservoirs.

Despite Tropical Storm Alberto’s insufficient rainfall, the few inches that did fall helped refresh the soil, benefiting crops like citrus, cotton, hay fields, and pastures. However, the irrigation water remains scarce, and the agricultural sector is already suffering significant losses, with about 6,000 acres of citrus bulldozed this year.

— NWS weather outlook: Heat wave focus shifts to the Southeast, Mid-South, and central/southern Plains into midweek... ...Severe storms and flash flooding possible for portions of the Upper Midwest into Monday night, shifting a bit south Tuesday... ...Monsoon-like conditions persist for the Southwest/Four Corners Region.

Items in Pro Farmer’s First Thing Today include:

• Grains mostly weaker overnight
• Crop Progress Report highlights
• Weaker La Niña forecast ‘good news’ for Argentina’s crops outlook
• Cold Storage Report out this afternoon

CONGRESS

— House Speaker Mike Johnson (R-La.) will swear in Rep.-elect Michael Rulli (R-Ohio) today. Rulli replaces former Rep. Bill Johnson (R-Ohio), who resigned earlier this year. Rulli’s swearing in will bring the House to 219 Republicans and 213 Democrats.

— Louisiana and New York stand to gain the most from new House water resource development legislation, receiving billions for coastal storm risk management. The House Transportation and Infrastructure Committee’s proposal, part of the Water Resources Development Act (WRDA), supports over $9.8 billion in federal and nonfederal funding for projects across 12 states, with Louisiana allocated nearly $5.9 billion and New York $2.1 billion.

The Senate Environment and Public Works Committee proposes only about $3 billion in funding for eight projects, excluding Louisiana’s but allocating $2.1 billion to New York for coastal storm risk management.

WRDA authorizes the Army Corps of Engineers to study and execute projects related to waterway navigation, ecosystem restoration, and storm risk management. The House bill, to be introduced and marked up this week, includes provisions for environmental assistance programs and a community project adviser program to help state, local, and Tribal governments.

The House proposal requires the Corps to expedite 14 backlogged feasibility studies and track environmental documents for projects online. The Senate panel’s bill authorizes 81 feasibility studies, while the House committee proposes 159. The previous WRDA law authorized 94 studies and 25 construction projects.

POLICY UPDATE

— Senate Ag Committee Democrats on farm bill: ‘It’s time to get real.’ Passing a bipartisan farm bill requires maintaining the broad coalition of farm and food interests that has historically ensured its success. Attempts to fracture this coalition with misleading statistics and misrepresentations have stalled negotiations, risking an extension of the 2018 Farm Bill, according to a blog (link) from Senate Ag Democrats.

The Supplemental Nutrition Assistance Program (SNAP) responds to economic fluctuations, and USDA figures show a 13% decrease in nutrition spending since fiscal year 2022, indicating the program’s effectiveness, according to the blog. It says changes in SNAP spending do not divert funds from other farm bill programs, similar to how crop insurance and commodity programs adjust during economic downturns.

“Republicans’ claims that increased SNAP costs have reduced resources for farms are misleading. Most of the recent increase in SNAP spending is due to Covid-19 payments, rising food costs, and higher rates of need, not the Thrifty Food Plan update. SNAP funding has increased without taking money from other programs, and investments in the farm safety net have been made simultaneously to address multiple disasters,” according to the Dems’ blog.

Senate Ag Chair Debbie Stabenow (D-Mich.) says, “If we look at what has actually been spent on SNAP benefits and on the farm safety net relative to the CBO forecasts in 2018, we see an important and accurate story.”

“The argument that SNAP spending has taken resources from the farm safety net has led to calls for ‘more farm in the farm fill.’ However, the House Republicans’ proposals favor a few large landowners growing certain southern crops, neglecting northern crops and smaller farms. This approach would skew the system further, with 50% of ARC and PLC payments going to just 40,000 of the nearly 2 million farms, resulting in a $22 billion increase in subsidies to these farms over the next decade,” according to the blog.

Both the farm and food safety nets are essential, concludes the blog. “Pitting them against each other to increase subsidies for a few crops is not a successful strategy. Senate Democrats propose building on the bipartisan 2018 Farm Bill by improving commodity programs and expanding crop insurance, markets, and support for specialty crops, dairy, and other critical areas. Their plan also funds research, increases food access, supports rural communities, and fosters the next generation of agriculture professionals. It’s time to pass a realistic and balanced farm bill.”

— House Ag Committee’s approved farm bill includes a provision that shields Bayer from lawsuits related to its Roundup weedkiller. Section 10204 mandates uniform national pesticide labeling, preventing states from creating their own warning labels and protecting manufacturers from liability if they use EPA-approved labels. This move, criticized as a “Get out of jail free” card for pesticide companies, overrides state and local health protections. The Washington Post (link) was the first to report on the topic.

The American Association for Justice condemned the provision, emphasizing that farmers who develop cancer from such chemicals should be able to hold manufacturers accountable. Bayer reportedly helped draft the provision and claims glyphosate, Roundup’s main ingredient, is safe and insists the provision is not a legal shield, suggesting that the issue will be resolved in courts.

Bayer has already spent billions to settle claims alleging Roundup caused cancer. Despite a 2015 UN agency report classifying glyphosate as “probably carcinogenic,” European regulators allowed its continued use in 2017. Bayer’s efforts to pass similar protective legislation in Iowa, Missouri, and Idaho were unsuccessful this spring.

CHINA UPDATE

— Chinese Premier Li Qiang warned of global negative consequences if nations decouple economically, arguing that such actions could lead to a “destructive spiral” of fierce competition diminishing overall benefits. Speaking at the World Economic Forum in Dalian, Li also defended China’s industrial policy against claims of overcapacity and cheap goods dumping, highlighting the nation’s advancements in science and technology.

Li’s comments followed Canada’s decision to restrict imports of Chinese-made electric vehicles, aligning with the Biden administration’s trade policies. The European Union also plans to increase tariffs on these vehicles. In response, China suggested potential benefits for Germany if the EU abandons its planned EV tariffs, including lowering tariffs on large-engine cars.

Li’s remarks came a day after Chinese leader Xi Jinping called for increased innovation to combat foreign dominance in key technologies, particularly semiconductors. At a national science conference, Xi emphasized the need to overcome constraints in areas like integrated circuits, industrial machine tools, and advanced materials.

China is upbeat. Despite challenges such as a prolonged property slump, weak consumer confidence, and rising local government debt, Li expressed optimism about China’s economic prospects, reiterating confidence in achieving a 5% growth target for the year. He mentioned that a combination of fiscal policy and financial measures would be employed to boost the economy.

The World Economic Forum meeting, known as “Summer Davos,” attracted global business executives and leaders, including Polish President Andrzej Duda and Vietnamese Prime Minister Pham Minh Chinh. The event precedes a significant Communist Party meeting in July, expected to introduce reforms aimed at revitalizing the sluggish economy. Xi emphasized the importance of aligning higher education with the needs of new industries in preparation for this meeting.

— China’s love affair with coal continues. China’s increasing imports of liquefied natural gas (LNG) have not slowed the growth of coal consumption, challenging LNG’s role as a bridge fuel for the energy transition, according to the Institute for Energy Economics and Financial Analysis. While Beijing supports diverse energy sources, including hydro and hydrogen, to meet rising demand, it is also expanding coal capacity to ensure reliable supply when clean energy sources are insufficient.

TRADE POLICY

— U.S. and Mexico agreed on a security plan to protect U.S. health safety inspectors of avocados and mangos, following a suspension of inspections due to a security incident in Michoacan state, where U.S. inspectors were blocked by a police protest. The agreement, reached by Michoacan Governor Alfredo Ramirez and U.S. Ambassador to Mexico Ken Salazar, includes collaboration on curbing illegal deforestation, environmental certification for farm products, and labor issues. Mexican Agriculture Minister Victor Villalobos mentioned that Mexican inspectors might replace U.S. staff for inspections. The incident had halted avocado exports from Michoacan, Mexico’s largest producer of the crop.

Of note: USDA plans to slowly reintroduce inspectors to packing plants in Michoacan.

Broader collaboration: The agreement extends beyond just security measures. It includes collaboration on:

Curbing illegal deforestation
Implementing environmental certification for farm products
Addressing labor issues in the state

ENERGY & CLIMATE CHANGE

— U.S. and Europe can’t agree on what counts as sustainable aviation fuel. Airlines view sustainable aviation fuel (SAF) as essential for decarbonizing the industry, with governments offering incentives and mandates to boost production. However, disagreement over what qualifies as “sustainable” complicates investment decisions, the Wall Street Journal reports (link). Disputes arise over acceptable feedstocks for SAF, with Europe excluding crop-based options like corn and soy from mandates, while the U.S. allows them under specific conditions.

The EU’s ReFuelEU mandate, requiring flights from EU airports to use at least 2% SAF by 2025, contrasts with the U.S.’ incentive-based approach, offering tax credits for SAF with significant emissions savings. This divergence creates uncertainty for airlines, investors, and producers, affecting market entry and investment strategies.

The controversy is exemplified by a UK cap on SAF from used cooking oil, following suspicions of fraudulent imports, and debates on the environmental impacts of different feedstocks. As a result, industry stakeholders struggle with unclear guidelines on SAF’s regulatory acceptance and environmental benefits.

Despite these challenges, some companies, like Eni, adapt by aligning operations with regional regulations. Eni plans to process 5 million tons of raw material annually, split between EU-compliant waste and U.S.-approved crops. This approach reflects the volatile but crucial role of biofuels in the energy transition and decarbonizing transportation.

LIVESTOCK, NUTRITION & FOOD INDUSTRY

— H5N1 avian flu confirmed in 121 dairy herds, USDA expects more cases amid heat challenges. The H5N1 avian flu virus has been confirmed in 121 dairy herds, with more expected as testing continues, according to a USDA official. The outbreak, now in its fourth month, poses challenges as summer heat discourages farmworkers from wearing full protective gear.

More cases expected. Julie Gauthier of the USDA’s Animal and Plant Health Inspection Service mentioned in a webinar hosted by the Council for Agricultural Science and Technology that additional cases are anticipated with increased testing. The USDA is promoting a voluntary program for weekly milk sample tests from bulk coolers on dairy farms, allowing farmers to transport lactating cows across state lines without prior testing if the weekly results are negative. Four herds have joined the program since June 3.

USDA also plans to roll out the Emergency Livestock Assistance Program (ELAP), which compensates producers for milk loss due to infection. This program aims to encourage more herds to undergo testing.

Criticism has been directed at USDA for insufficient herd testing and inadequate monitoring of dairy farmworkers. Since March 25, three dairy workers have contracted mild cases of bird flu from cattle in the Texas panhandle.

Jamie Jonker of the National Milk Producers Federation noted that full personal protective equipment (PPE) may not be feasible in the current heat, raising potential worker safety issues. The focus will instead be on protecting the eyes, nose, and mouth, with goggles already recommended in milking parlors. Gloves, masks, face shields, and disposable coveralls are other suggested protective measures. Testing has found high viral counts in raw milk from infected cows, with conjunctivitis being a common symptom among infected workers.

— Vilsack announces $60 million program to boost healthy food access in underserved communities. USDA Secretary Tom Vilsack announced a new $60 million program under the American Rescue Plan’s Food Access and Retail Expansion Fund to enhance access to healthy foods in underserved communities. The funding, aimed at supporting food retail and supply chain projects, will be distributed over the next five years. Vilsack made this announcement at the National Rural Grocer’s Summit on Monday.

— USDA Secretary Tom Vilsack is expected to announce a new livestock competition regulation today at an event hosted by the Center for American Progress. The event will focus on market competition and improving conditions for U.S. producers, featuring Vilsack and U.S. Assistant Attorney General of Antitrust Jonathan Kanter. The Office of Management and Budget recently completed its review of a USDA proposed rule defining unfair practices under the Packers and Stockyards Act. This is part of the Biden administration’s broader regulatory efforts in agriculture, particularly targeting the livestock and poultry markets.

— Denmark is set to implement a carbon tax on livestock producers to meet its 2030 target of reducing greenhouse gas emissions by 70% from 1990 levels. The tax will be 300 Danish crowns ($43.16) per metric ton of carbon dioxide in 2030, increasing to 750 crowns by 2035. Farmers can receive a 60% income tax deduction, effectively reducing the tax to 120 crowns per metric ton initially, rising to 300 crowns by 2035. Subsidies will also be available to help farmers adjust their operations. This plan, proposed in February and agreed upon by farmers, industry, labor unions, and environmentalists, awaits parliamentary approval but is expected to pass. Farming is Denmark’s largest source of carbon dioxide emissions. Other countries have faced resistance to similar taxes from farmers, making it uncertain if they will follow Denmark’s lead.

HEALTH UPDATE

— As demand for weight loss drugs surges, Novo Nordisk will invest $4.1 billion to build a second fill-and-finish facility in North Carolina. This move comes as Novo, maker of popular weight loss drugs Ozempic and Wegovy, and rival Eli Lilly , marketer of Zepbound, face supply constraints due to high demand. Wegovy has also recently been approved in China. Novo plans to invest a total of $6.8 billion to boost overall production, with the new plant adding 1.4 million square feet of manufacturing space.

POLITICS & ELECTIONS

— Republican primary race between Rep. Bob Good and state Sen. John J. McGuire in Virginia remained “too close to call” on Monday, nearly a week after voters went to the polls, the Washington Post reports (link). The race is expected to go to a recount, but that process cannot begin until state officials certify the results. Despite this, McGuire claimed victory in a statement issued Monday, asserting that the outcome “has been confirmed.” Meanwhile, The Hill reports (link) that Good said on Monday he will try to block the certification of election results, citing concerns about inappropriate activity in Lynchburg City, the biggest city in the district. On Steve Bannon’s podcast, Good claimed that the city did not secure its drop boxes, lacked accountability for when they were open, and allowed them to be stuffed for two or three days after the election, with no accountability for who opened them or how many ballots came out.

— In today’s primary elections in New York, Colorado, and Utah, several key races will significantly impact the future composition of the House and Senate. Here’s what to watch:

New York’s 16th District:
- Rep. Jamaal Bowman (D-N.Y.) faces a tough primary challenge from Westchester County Executive George Latimer. Bowman, a member of the Squad, is under pressure due to his controversial anti-Israel views. AIPAC’s super PAC has spent nearly $15 million in ads against Bowman, making this the most expensive primary in U.S. history in a heavily Democratic district.
Utah’s Senate Race:
- The Republican primary to succeed retiring Sen. Mitt Romney features Rep. John Curtis (R-Utah) leading in polls against Trent Staggs, the Riverton mayor with former President Donald Trump’s endorsement. If Curtis wins, it could indicate that Utah Republicans are not fully aligned with Trump.
- In another Utah race, Rep. Celeste Maloy (R-Utah) faces a right-wing primary challenge from Colby Jenkins, endorsed by Sen. Mike Lee. Trump supports Maloy.
Colorado’s 4th District:
- Rep. Lauren Boebert (R-Colo.) is running in the GOP primary for the seat vacated by former Rep. Ken Buck (R-Colo.), improving her chances of staying in Congress. Boebert is favored to advance in the primary and win in this strongly Republican district.
- In the same district, voters are also choosing Buck’s short-term replacement, with Republican Greg Lopez being the favorite.
New York Battleground Districts:
- In the 1st District, former CNN anchor John Avlon competes against educator Nancy Goroff for the Democratic nomination in Rep. Nick LaLota’s (R-N.Y.) Long Island seat.
- In the 22nd District, represented by Rep. Brandon Williams (R-N.Y.), Air Force veteran Sarah Klee Hood faces state Sen. John Mannion. President Joe Biden won both districts in 2020.

OTHER ITEMS OF NOTE

— USDA’s Food Safety Inspection Service (FSIS) released updated guidance on residue prevention, published in the Federal Register (link). The new guidelines, revised from May 2013, incorporate the latest science, include new information on purchase specifications and documentation to ensure violative residues are unlikely, and offer guidance for establishments performing residue testing. The guidelines also clarify how residues affect New Swine Inspection System sorting procedures. Although the guidance is not legally binding, it aims to help meat and poultry establishments meet regulatory requirements. Comments on the updated guidance are due by Aug. 26.

KEY LINKS

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