Senate Dems, GOP Get Close to a Relatively Clean CR, but Will House GOP Concur?

Vilsack comments on how any gov’t shutdown would impact USDA, farmers, farm bill

Jim Wiesemeyer

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September 26, 2023 09:11 AM

Vilsack comments on how any gov’t shutdown would impact USDA, farmers, farm bill

Today’s Digital Newspaper

MARKET FOCUS

Equity markets today
Dimon on interest rates
Fedspeak on interest rates ahead
Raimondo taps former Wall Street executives to help allocate $100 bil. chip subsidies
Dollar index reaches 10-month high amid hawkish Fed stance on inflation
IEA emphasizes urgency of more rapid reduction in fossil fuel usage re: global warming
Indonesia explores rice imports from China and Cambodia amid declining rice output
U.S. beef, pork stocks climb less than normal in August
Ag markets today
Ag trade update
U.S. Army Corps of Engineers to barge freshwater into Mississippi River
NWS weather outlook
Pro Farmer First Thing Today items

CONTINUING RESOLUTION (CR) and POSSIBLE GOV’T SHUTDOWN

Senate nears accord on short-term CR to avert gov’t shutdown in October
Biden: Americans should not elect Republicans if they cannot fund government
Vilsack details potential USDA shutdown impact on nutrition programs and farming

RUSSIA & UKRAINE

Ukraine welcomed the arrival of the first U.S.-made M1 Abrams tanks
Ukrainian officials claim Russian Black Sea fleet commander killed in missile strike
Russia seeks re-entry to U.N. human rights council amid reports of bargaining
Czech ag minister calls for increased checks on Ukraine grain corridors
Some Republicans are upset by how aid to Ukraine is being spent

POLICY

ERP payments surpass $7.46 billion with Phase 2 increase
Vilsack addresses concerns about foreign ownership of U.S. agricultural land

TRADE POLICY

Global trade fell in July at its fastest pace since the summer of 2020

ENERGY & CLIMATE CHANGE

Ford pauses $3.5 billion electric-battery plant construction in Michigan
Court grants extension for Gulf Oil lease sale, upholds expanded sale
Future of U.S. corn farmers is closely tied to the growth of green aviation fuel

LIVESTOCK & FOOD INDUSTRY

Grocery inflation expected to decline as retail pork prices drop

HEALTH UPDATE

Nearly 18 million U.S. adults and a million children experience long Covid

POLITICS & ELECTIONS

Sen. Menendez refuses resignation amidst bribery accusations, pledges to fight
Second 2024 GOP presidential debate to feature seven candidates as stage narrows
WSJ poll reveals 26% of voters in 2024 election persuadable and conflicted
Rep. Phillips considers potential primary challenge to President Biden in 2024

OTHER ITEMS OF NOTE

Migrant crossings at U.S./Mexico Border expected to stay high as resources strain
Today’s calendar of events

MARKET FOCUS

Equities today: Global stock markets experienced a decline, with European major stock exchanges decreasing by approximately 0.6%. This decline was accompanied by government bond yields reaching multi-year highs, reflecting concerns about the possibility of enduring higher interest rates. In Asia, a similar trend emerged, with stock markets also facing losses. Concerns centered around the Chinese property sector, which had a noticeable impact on market sentiment. The Hang Seng index, for instance, dropped by 0.9%, reaching its lowest point since November. In Asia, Japan -1.1%. Hong Kong -1.5%. China -0.4%. India -0.1%. In Europe, at midday, London +0.1%. Paris -0.7%. Frankfurt -0.6%.

U.S. Dow opened around 200 points lower.

U.S. equities yesterday: The Dow ended up 43.04 points, 0.13%, at 34,006.88. The Nasdaq gained 59.51 points, 0.45%, at 13,271.32. The S&P 500 rose 17.38 points, 0.40%, at 4,337.44.

— Agriculture markets yesterday:

Corn: December corn rose 4 cents to $4.81 1/4, ending near the session high.
Soy complex: November soybeans rallied 2 cents before ending the day at $12.97 3/, near the session high. December soybean meal futures rallied $4.00 and settled at $389.80, while December soyoil fell 214 points and closed at 57.48 cents.
Wheat: December SRW wheat rose 9 1/2 cents at $5.89 and near the session high. December HRW wheat gained 3 1/4 cents to $7.14 1/2 and closed nearer the session high. Prices hit a two-year low early on. December spring wheat futures fell 1 1/2 cents to $7.69.
Cotton: December cotton rose 226 points to 88.17 cents--the highest closing price since Sept. 12.
Cattle: October live cattle fell 10 cents to $186.975 and nearer the session high. October feeder cattle lost 32 1/2 cents at $258.825 today.
Hogs: October lean hogs futures closed flat on the day at $81.525 despite a rise in the deferred contracts.

— Ag markets today: Corn futures held near unchanged, while soybeans and wheat posted mild gains during a quiet overnight session. As of 7:30 a.m. ET, corn futures were trading unchanged to fractionally lower, soybeans were 5 to 7 cents higher, SRW wheat was 3 to 5 cents higher, HRW wheat was mostly 1 to 2 cents higher and HRS wheat was 3 to 6 cents higher. Front-month crude oil futures were around 65 cents lower, and the U.S. dollar index was modestly weaker.

Packers bought a lot of cattle last week. The average cash cattle price firmed 69 cents to $184.73 last week, prompting 87,000 head to be traded in the negotiated market, including 20,000 head “with time.” That was the largest weekly trading volume since June and suggests packers will be less aggressive with bids, especially with fresh contract supplies available next week. But tight market-ready supplies also limit the downside for the cash cattle market.

Cash hog fundamentals stuck in neutral. The CME lean hog index dropped 38 cents to $86.70 (as of Sept. 22). The cash index continues to consolidate around the $87.00 area ahead of what is expected to be a steep seasonal decline in the months ahead. The pork cutout value firmed $1.60 on Monday to $98.86. Packers can’t find sustained retailer demand on moves above $100.00 in the pork cutout but there’s solid demand not far below that point.

— Quotes of note:

Dimon on rates. The world may not be prepared for a worst-case scenario of Federal Reserve benchmark interest rates hitting 7% along with stagflation, JPMorgan Chase & Co. CEO Jamie Dimon said in an interview with the Times of India. “If they are going to have lower volumes and higher rates, there will be stress in the system,” Dimon said while visiting Mumbai for a JPMorgan investor summit. “Warren Buffett says you find out who is swimming naked when the tide goes out. That will be the tide going out.” Dimon, who has said rates may need to rise further to fight inflation, added that the difference between 5% and 7% would be more painful for the economy than going from 3% to 5% was.
Federal Reserve Bank of Minneapolis President Neel Kashkari said he expects the U.S. central bank will need to raise interest rates one more time this year and keep policy tighter for longer if the economy is stronger than expected. “If the economy is fundamentally much stronger than we realized, on the margin that would tell me rates probably have to go a little bit higher and then be held higher for longer to cool things off,” Kashkari said Monday at an event at the University of Pennsylvania’s Wharton School. Kashkari, who votes on monetary policy decisions this year, said he was one of 12 policymakers who forecast one more rate hike this year in projections released after the Fed’s two-day policy meeting last week.
Chicago Fed President Austan Goolsbee emphasized on Monday that the central bank is edging closer to a point where it can maintain stable interest rates, albeit at a higher level compared to the market’s accustomed rates. Investors are now keeping a close eye on upcoming U.S. consumer confidence and home sales data, seeking further insights into the state of the economy. While the dollar reached multi-month highs against the euro, sterling, and the yen, it continued to consolidate its position in relation to the Australian and New Zealand dollars.

— Raimondo taps former Wall Street executives to help allocate $100 billion chip subsidies. Commerce Secretary Raimondo has assembled a team that includes former executives from financial giants like Goldman Sachs Group Inc. and KKR & Co. to manage approximately $100 billion in subsidies and loan guarantees earmarked by the government to revitalize the U.S. semiconductor industry, according to Bloomberg (link). The team, comprising experts in areas such as national security and workforce development, intends to leverage these funds to attract major chip manufacturers and suppliers to establish new factories in the United States. Their approach emphasizes evaluating returns not only in monetary terms but also in terms of economic and national security considerations.

Market perspectives:

— Outside markets: The U.S. dollar index was weaker, with the euro and Swiss franc firmer against the greenback. The yield on the 10-year U.S. Treasury note eased to trade around 4.5% with a mixed tone in global government bond yields. Crude oil futures were lower. U.S. crude was around $89.10 per barrel and Brent around $91.30 per barrel. Gold and silver were weaker as traders awaited economic updates, with gold around $1,930 per troy ounce and silver around $23.62 per troy ounce.

— Dollar index reaches 10-month high amid hawkish Fed stance on inflation. On Tuesday, the dollar index maintained its position around 106, marking its strongest performance in a span of ten months. This rise correlated with an upward trajectory in U.S. Treasury yields, following the Federal Reserve’s hawkish stance on monetary policy, driven by persistent inflation concerns. Although the U.S. central bank decided to keep interest rates unchanged during its September policy meeting, it hinted at an upcoming rate hike before the year’s end and fewer anticipated rate cuts for the following year.

— IEA emphasizes the urgency of a more rapid reduction in fossil fuel usage to effectively combat global warming. While cleaner energy technologies, such as electric vehicles and solar power, are gaining traction, the International Energy Agency’s (IEA) latest report (link) underscores the necessity for a quicker decline in fossil fuel consumption to avert severe climate consequences. However, some industry experts have expressed reservations, suggesting that the IEA remains overly optimistic in its projections regarding the reduction of oil and coal demand. This highlights the ongoing debate surrounding the pace at which the world should transition away from fossil fuels to address the pressing issue of climate change.

— Indonesia explores rice imports from China and Cambodia amid declining rice output. Indonesia’s National Food Agency (NFA) is actively pursuing agreements to import 1 million metric tons (MMT) of rice from China, as revealed by the head of the NFA in discussions with Reuters. With the country’s rice production expected to decrease by 5% to 7% due to El Niño, Arief Prasetyo, NFA’s head, stated that they have initiated discussions about the possibility of importing 1 MMT of rice from China, a topic also addressed during the ASEAN summit. Indonesia is also in talks with Cambodia to import 10,000 metric tons of rice. The nation has already witnessed a notable increase in rice imports, surging to 1.59 MMT from January to August, compared to 237,146 metric tons during the same period the previous year. This move aligns with the broader trend among Asian countries, where several nations are imposing export restrictions on rice or actively seeking to import rice to ensure domestic supply stability and manage price levels.

— U.S. beef, pork stocks climb less than normal in August. USDA’s Cold Storage Report showed beef stocks at the end of August at 421.6 million lbs., up 11.2 million lbs. (2.7%) from July, which was slightly less than the average increase of 11.5 million lbs. over the past five years. Beef inventories fell 92.2 million lbs. (17.9%) from the August 2022 record for the month and were 48.2 million lbs. (10.3%) less than the five-year average. Pork stocks totaled 471.1 million lbs., up 327,000 lbs. from July. The five-year average was a 10.7-million-lb. increase during the month. Pork inventories fell 71.5 million lbs. (13.2%) from last year and were 58.1 million lbs. (11.0%) less than the five-year average.

— Ag trade update: South Korea purchased 132,000 MT of corn expected to be sourced from South America or South Africa. Algeria tendered to buy 90,000 MF of corn and 30,000 MT of feed barley — both optional origin.

— U.S. Army Corps of Engineers to barge freshwater into Mississippi River to combat saltwater intrusion threat. The U.S. Army Corps of Engineers is set to transport 36 million gallons of freshwater daily into the lower Mississippi River near New Orleans as a preventative measure against saltwater intrusion expected in October. This intrusion, a result of falling water levels due to extreme drought and heat, poses a threat to the area’s drinking water supply. New Orleans officials anticipate feeling the effects of saltwater intrusion in late October. The Corps plans to bolster an underwater levee and barge freshwater to local treatment facilities to mitigate this threat. Governor John Bel Edwards has requested a federal emergency declaration for affected areas. Link to details via CNN.

— NWS weather outlook: Pockets of unsettled weather found throughout the Northwest, Southeast, Midwest, and Ohio Valley over the next few days along with chances for locally heavy rainfall... ...Below average temperatures expected across the Northwest and from Southern New England into the Mid-Atlantic, while above average highs build into the Central Plains by midweek.

NWS

Items in Pro Farmer’s First Thing Today include:

• Quiet overnight trade in grains
• Cordonnier cuts U.S. yield, production estimates
• Corn, soybean CCI ratings post late-season increases
• Russia again attacks Ukrainian port and grain facilities
• Indonesia to pursue legal action against palm firms that use land illegally

CONTINUING RESOLUTION (CR) & POSSIBLE GOV’T SHUTDOWN

— Senate nears agreement on short-term spending measure to avert gov’t shutdown in October. Senate negotiators, comprising both Republicans and Democrats, are edging closer to a deal on a short-term spending measure aimed at preventing a gov’t shutdown after Oct. 1, according to several reports. The proposed legislation would extend funding for a period of four to six weeks, which is a shorter timeframe than the Democrats’ initial preference of extending funding into December but could facilitate passage in the House.

House hurdle. Should the Senate successfully pass the stopgap bill and forward it to the House, Speaker Kevin McCarthy (R-Calif.) faces a challenging decision regarding whether to hold a vote on it. It remains uncertain whether the Senate bill will incorporate emergency disaster aid or assistance to Ukraine for its ongoing conflict with Russia. These elements, favored by the White House, have not garnered support from some House Republicans, particularly in the case of the Ukraine aid package.

Bottom line: If McCarthy decides to put the Senate’s bill up for a vote, some GOP House renegades have indicated their readiness to attempt his removal from office.

Market impact: Yesterday, Moody’s, the ratings agency, said a shutdown could lead it to downgrade the country’s credit rating — a warning that the White House seized upon in hopes of compelling the warring Republican factions to break their impasse on spending cuts.

— Biden: Americans should not elect Republicans if they cannot fund government. President Joe Biden said that “time is running out to avoid a government shutdown” and “the GOP should live up to its budget deal.” The White House is calling this a Republican shutdown and warns that without a solution at least 4 million federal workers won’t get paid, food safety inspections could be delayed, and cancer research could be stalled. On Monday, the president said, “Funding the government is one of the most basic, fundamental responsibilities of the Congress and if Republicans in the House don’t start doing their job, we should stop electing them.” Biden pointed out he made an agreement with House Speaker McCarthy (R-Calif.) in May “that led to an increase in the debt ceiling” and accused the GOP of not abiding by the debt-ceiling agreement. The President said, “Now, a small group of extreme House Republicans, they don’t want to live up to that deal and everyone in America could be faced with paying a price for that.” He continued, “We made a deal. We shook hands. We said this is what we’re going to do and now they’re reneging on the deal, which is not much of a surprise these days.”

— Vilsack details potential USDA shutdown impact on nutrition programs and farming. USDA Secretary Tom Vilsack explained the potential consequences of a government shutdown on USDA nutrition programs and the farming sector at a White House press briefing. Vilsack noted that programs like the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and assistance to farmers would be affected. He emphasized the negative impacts on families, local economies, and rural communities, and the risk of disrupting vital nutrition assistance and farming support. Vilsack also stressed the need for Congress to reach a resolution and avoid a shutdown that would harm essential services, including crop loans and rural housing loans. Link to video.

“We anticipate and expect that more than 50,000 of those who work for USDA will be furloughed,” Vilsack said. “And when they’re furloughed, it means that they don’t receive a paycheck. Because they don’t receive that paycheck, their local economies get impacted and affected. It’s across the board. It’s every county in the country. We have a presence in every county in the country. So, it’s going to impact and affect literally every county in the country. It’s FSA offices. It’s rural development offices. It’s NRCS [Natural Resources Conservation Service] conservation employees. It’s some of the Forest Service employees. It’s a lot of the researchers and people who work for the Agricultural Research Service — ARS. It’s — it’s administrative staff.”

Regarding food safety, Vilsack said inspectors for meat, poultry and processed eggs who work for USDA’s Department’s Food Safety and Inspection Service would remain on the job but he referred questions about other food inspections to the Food and Drug Administration.

As for new farm bill impacts, Vilsack said any shutdown would make it impossible for USDA employees to provide the technical assistance that congressional leaders ask for in writing it. “They call our office for technical assistance,” Vilsack said. “The phone is not going to get answered because no one is there. Why aren’t they there? Because we’re in a shutdown.”

Vilsack expressed confidence in Ag committee leaders’ commitment to passing a new farm bill but noted that the proposed budget cuts for USDA would undermine its implementation.

Certain disaster-related aid needs, like those in Florida and Georgia, could go unaddressed if a new farm bill is delayed due to a shutdown, Vilsack added.

Bottom line: Monday’s comments are a preview of the White House’s plan to dispatch several Cabinet officials this week to help lay out the broad range of ramifications if the government were to shut down.

RUSSIA/UKRAINE

— Ukraine welcomed the arrival of the first U.S.-made M1 Abrams tanks to aid in its counteroffensive efforts. The key questions now revolve around the speed at which these tanks can be deployed in combat and the extent of their influence on the evolving battlefield dynamics. Western-made tanks and armored vehicles have become a focal point in discussions between Ukrainian military leaders and their supporters in the Pentagon. Some in the U.S. have advocated for Kyiv to employ this equipment more aggressively in their battles. Initially, Ukrainian military leaders attempted to emulate the U.S. approach but encountered obstacles such as Russian minefields and aerial attacks. Subsequently, they adopted a more gradual strategy, which has received criticism from certain Western observers. Nevertheless, the M1 Abrams, renowned for their sophistication, possess technical advantages that could potentially enhance their utility for Ukraine compared to its other Western tanks. Their arrival also serves as a morale booster for Ukrainian forces.

— Ukrainian officials claim Russian Black Sea fleet commander killed in missile strike on Crimea. Ukrainian authorities claim that Admiral Viktor Sokolov, the commander of the Russian Black Sea fleet, was among the 34 officers killed in a missile strike targeting the fleet’s headquarters in Crimea this past Friday. However, Ukraine’s claim has not been independently verified. This development comes as Ukraine has escalated its attacks on Crimea, a peninsula annexed by Russia in 2014, with the goal of challenging Russia’s dominance in the Black Sea region.

— Russia seeks re-entry to U.N. human rights council amid reports of diplomatic bargaining. Russia was expelled from the council in April 2022 following its invasion of Ukraine. Diplomats have indicated that Russia is engaging in diplomatic efforts, including offering grain and weapons, in exchange for votes in favor of its reinstatement.

Of note: The council, whose membership has included countries such as Saudi Arabia, Venezuela, and China, received a report on Monday detailing allegations of war crimes committed by Russia.

— Czech ag minister calls for increased checks on Ukraine grain corridors. The European Commission should make checks on corridors of solidarity for Ukraine grains and enact a deposit system for exports, the Czech ag minister said after meeting ministers from Slovakia, Hungary and Poland. Slovakia, Poland and Hungary unilaterally banned imports of Ukrainian grain after the European Commission let a multilateral ban expire earlier this month.

— Some Republicans are upset by how aid to Ukraine is being spent. A recent 60 Minutes report highlighted what U.S. taxpayers are getting for their money in Ukraine. According to the report, U.S. aid is being used to buy seeds and fertilizer for farmers and pay the salaries of at least 57,000 first responders. A total of $113 billion of funding for Ukraine has been delivered since Russia’s invasion, and President Joe Biden has asked Congress to approve an additional $24 billion in security and humanitarian aid.

POLICY UPDATE

— ERP payments surpass $7.46 billion with Phase 2 increase. Payments made under the Emergency Relief Program (ERP) have continued to rise, reaching a total of $7.46 billion as of Sept. 24, as reported by USDA. Phase 2 payments have seen an increase, with $11.75 million distributed to 6,887 recipients. Meanwhile, Phase 1 payments now stand just above $7.44 billion. In contrast, there have been no significant alterations to payment totals within the Coronavirus Food Assistance Program (CFAP) efforts.

— Vilsack addresses concerns about foreign ownership of U.S. agricultural land and businesses ahead of Senate hearing. USDA Secretary Tom Vilsack on Monday discussed the issue of foreign ownership of U.S. agricultural land and businesses during a White House briefing in anticipation of an upcoming Senate Agriculture Committee hearing on the topic Wednesday. Responding to questions about whether the purchase of U.S. farmland by Chinese entities poses a threat to national security or food security, Vilsack expressed concern, particularly regarding instances such as Chinese interests acquiring land near military installations in North Dakota. He emphasized the need for greater engagement in the Committee on Foreign Investment in the United States (CFIUS) process to address these concerns, acknowledging that there is work to be done to enhance the tools and mechanisms for monitoring such transactions. Vilsack also mentioned the complexity of tracking land purchases, as every county has its own recorder’s office, making it challenging to identify foreign purchasers. To better address the issue of foreign land ownership, Vilsack highlighted the necessity of developing methods to collect and analyze information promptly, enabling a more effective determination of potential threats. Additionally, he discussed the possibility of the Agriculture secretary becoming a member of the CFIUS committee to enhance oversight and improve the process.

TRADE POLICY

— Global trade fell in July at its fastest pace since the summer of 2020, when the coronavirus pandemic stymied global markets. According to the newest World Trade Monitor report (link), the decline is the latest signal that global demand for goods is deteriorating, as inflation and high interest rates remain at multi-decade highs.

ENERGY & CLIMATE CHANGE

— Ford pauses $3.5 billion electric-battery plant construction in Michigan amid UAW strike, drawing criticism. Ford suspended construction of a $3.5 billion electric-battery plant in Michigan as the United Auto Workers (UAW) strike enters its second week. “We’re pausing work and limiting spending on construction on the Marshall project until we’re confident about our ability to competitively operate the plant,” said spokesperson T.R. Reid. UAW President Shawn Fain characterized Ford’s decision as a “shameful, barely veiled threat” to job security. This move has also faced criticism from Republican lawmakers, partly due to concerns about the plant’s use of technology licensed from Chinese firms in manufacturing its batteries.

— Court grants extension for Gulf Oil lease sale, upholds expanded sale despite environmental concerns. The Fifth Circuit Court of Appeals in New Orleans ruled to provide the Biden administration with more time to conduct an oil lease sale in the Gulf of Mexico, extending the deadline until Nov. 8. However, the court upheld the decision to expand the sale. The Department of the Interior will now include 6 million acres in the sale, which had previously been excluded, and will not impose vessel traffic limitations. The court cautioned that there would be no further extension for the sale, and it will also use the additional time to consider an appeal from environmental groups. Originally scheduled for Sept. 27, the sale has raised concerns among environmentalists, and the Department of the Interior has not yet issued a final plan for offshore oil and gas leases over the next five years.

— Future of U.S. corn farmers is closely tied to the growth of green aviation fuel due to the impact of electric vehicles (EVs) on ethanol demand and the push for sustainable jet fuel by airlines. As EVs are expected to reduce gasoline demand by 2040, corn-ethanol producers are seeking new markets.

Some are exploring the use of ethanol for aviation fuel, which is viewed as a lifeline for the industry. A Bloomberg article on the topic quotes Patrick Gruber, chief executive officer of renewable fuels producer Gevo Inc., which is building an $850 million plant to make green jet fuel from corn. “It creates an outlet for ethanol and it’s actually huge,” Gruber said.

However, challenges include the lack of commercial-scale ethanol aviation fuel and uncertainties about tax breaks — it’s not clear whether ethanol-derived SAF will be eligible for tax breaks. Ethanol consumption is projected to decline, making this a pivotal moment for ethanol producers.

The White House is calling for sustainable jet fuel output in the US to jump to 3 billion gallons a year by 2030, up from 15.8 million last year. Airlines are setting aggressive goals for sustainable jet fuel as they chase net-zero carbon targets. Delta aims for SAF to make up 10% of its aviation fuel consumption by 2030 and 95% by 2050. United Airlines plans to convert completely to SAF by 2046.

Ethanol consumption is set to plummet 12% by the end of this decade and almost 90% by 2050, according to Bloomberg NEF, mirroring a drop in gasoline demand as EVs become more popular and gasoline engines more efficient.

Ethanol producers are facing a “make-or-break moment,” USDA Secretary Tom Vilsack said this month at a forum held by ethanol lobbying group Growth Energy. “The future of this industry is in fact linked to its capacity to take advantage of this new and amazing opportunity.”

“You have to fight for it,” Vilsack said. “I want you to have it because it’s critical to keeping small and mid-sized folks in business.”

The potential market for sustainable aviation fuel from ethanol is substantial, with support from President Biden and airlines’ net-zero carbon targets. Nevertheless, according to the article, the industry faces supply and infrastructure challenges, carbon intensity hurdles, and lobbying efforts in Washington.

Bottom line: If it all works out, the U.S. market for converting ethanol and other alcohols to jet fuel could grow to about $105 billion by 2050, according to BloombergNEF. That’s because the likes of United Airlines Holdings Inc. and other major carriers are under pressure to cut greenhouse gas emissions.

LIVESTOCK, FOOD & BEVERAGE INDUSTRY

— Grocery inflation expected to decline as retail pork prices drop. USDA’s monthly Food Price Outlook (link) reveals that after an 11.4% increase in grocery prices last year, retail pork prices are set to decline by 1.1% this year, contributing to an overall grocery inflation rate of 5.1%. The report anticipates a more moderate 1.6% inflation rate for groceries in the coming year. While prices for most groceries are expected to rise, the largest increases are forecasted for sugar and sweets, as well as fats and oils, both with a 9.4% increase. This represents a decrease in the number of food categories with price increases exceeding 9% compared to previous reports, with pork being the only category expected to see a price decline. USDA has consistently adjusted its grocery price inflation forecasts downward throughout the year, with August being the exception when it predicted a 5.2% increase.

HEALTH UPDATE

— Nearly 18 million U.S. adults and a million children experience long Covid, prompts $45 million investment in research and care. A recent survey conducted by the National Center for Health Statistics reveals that almost 7% of U.S. adults, amounting to nearly 18 million people, have grappled with lingering symptoms associated with Covid-19. Additionally, the survey found that approximately one million children have also been impacted by long Covid. This specific report characterizes long Covid as symptoms persisting for at least three months after a positive Covid-19 test or a doctor’s diagnosis of the virus. In response to the growing need for a deeper understanding of the condition and improved treatment options, the Department of Health and Human Services has allocated $45 million in new grants. These grants aim to enhance access to care and promote the development of best practices for the management of long Covid, recognizing the importance of addressing this ongoing health concern.

POLITICS & ELECTIONS

— Sen. Menendez refuses resignation amidst bribery accusations, pledges to fight charges. Senator Bob Menendez of New Jersey, a Democrat facing bribery allegations, announced that he will not resign from his position and intends to challenge the corruption charges brought against him by federal prosecutors. During his statement, Menendez did not directly address questions regarding the discovery of bars of gold on his property. However, he did assert that the $550,000 in cash found in various locations around his home was intended as part of an emergency fund.

— Second 2024 GOP presidential debate to feature seven candidates as stage narrows. The second 2024 GOP presidential debate, scheduled for Wednesday at 9 p.m. ET, is seeing a reduction in the number of participants. The Republican National Committee (RNC) announced that seven candidates have met their elevated polling and fundraising criteria for inclusion in the debate, which is one less than the previous clash. The participating candidates are Florida Gov. Ron DeSantis, former South Carolina Gov. Nikki Haley, South Carolina Sen. Tim Scott, entrepreneur Vivek Ramaswamy, former Vice President Mike Pence, former New Jersey Gov. Chris Christie, and North Dakota Gov. Doug Burgum. Notably, former Arkansas Gov. Asa Hutchinson, who took part in the first primary debate, did not meet the criteria for this event. Donald Trump, the front-runner for the 2024 GOP nomination, has chosen not to participate in the debate.

— Wall Street Journal poll reveals 26% of voters in 2024 election are persuadable and conflicted between Biden and Trump. According to recent polling by the Wall Street Journal (link), the majority of voters have already made up their minds about their choice for president in the 2024 election, which would be between President Biden and Donald Trump. However, the survey highlights that approximately 26% of voters fall into a category characterized as “persuadable and conflicted.” These individuals express reservations about both the policies and personalities of both candidates, making them a key demographic to watch in the upcoming election. Interestingly, this group tends to hold more moderate political views and exhibits less optimism about the country’s direction compared to the broader electorate.

— Rep. Phillips considers potential primary challenge to President Biden in 2024. Rep. Dean Phillips (D-Minn.) has not ruled out the possibility of launching a primary challenge against President Biden in the 2024 presidential election. During an appearance on “The Warning” podcast, Phillips stated, “I am thinking about it. I haven’t ruled it out.” He acknowledged the challenges of such a campaign, citing the need for national organizations and name recognition. Phillips has previously advocated for a competitive primary and expressed concerns about the absence of alternatives, fearing potential issues leading up to the Democratic Convention in Chicago next year.

OTHER ITEMS OF NOTE

— Migrant crossings at U.S./Mexico Border expected to stay high as resources strain. A senior official from the U.S. Customs and Border Protection has projected that migrant crossings at the U.S./-Mexico border will continue to be significant. Over the weekend, Border Patrol agents arrested nearly 9,000 individuals, with approximately 7,500 apprehensions on Saturday alone. This surge primarily comprises migrants from Venezuela and is placing considerable strain on federal resources. In response to this situation, the U.S. has secured additional commitments from Mexico aimed at eventually reducing these numbers. As part of the agreement, Mexico has pledged to deport migrants from its border cities back to their home countries and implement various measures to “depressurize” its northern cities, contributing to the efforts to manage the ongoing situation at the border.

— Calendar of events today include:

Tuesday, Sept. 26

• Federal Reserve. Fed Governor Michelle Bowman delivers opening remarks via video on Post-Pandemic Challenges and Strategies for Addressing Rental Housing Affordability at FedCommunities event.

• New farm bill. Farm Foundation virtual forum on “What to Expect from the 2023 Farm Bill Now.”

• U.S. Trade Representative Katherine Tai meets North Carolina turkey producers, following tour with North Carolina Gov. Roy Cooper of North Carolina State University’s turkey education unit, Raleigh.

• U.S. trade policy. Hudson Institute discussion on “Assessing U.S. Trade Policy.”

• World trade. Peterson Institute for International Economics and the Council on Foreign Relations virtual discussion on “Revitalizing the World Trading System.”

• Net zero progress update. International Energy Agency virtual media briefing on a new report, “Net Zero Roadmap: A Global Pathway to Keep the 1.5 Celsius Goal in Reach — 2023 Update.”

• Geopolitics. Brookings Institution holds its 2023 Knight Forum on Geopolitics.

• Cyber threats. Washington Post Live virtual discussion on “The Next Generation of Cyber Threats.”

• Presidential sites. First full day of the White House Historical Association 2023 Presidential Sites Summit; runs through Wednesday.

• Challenges for the U.S. in MENA. Arab Center Washington, D.C. conference on “Democracy in Crisis: Geopolitical Shifts and U.S. Challenges in MENA (Middle East/North Africa).”

• Global economic prospects. Peterson Institute for International Economics virtual discussion on “Global Economic Prospects: Fall 2023.”

• U.S. industrial base. Center for Strategic and International Studies discussion on “Strengthening the U.S. Industrial Base.”

• Supreme Court preview. Federalist Society for Law and Public Policy Studies discussion on “Supreme Court Preview: What Is in Store for October Term 2023?”

• Electric vehicles. Energy Department teleconference of the Electric Vehicle Working Group with a review of the role of the EVWG; and Discussion of potential report topics that the EVWG will research.

• Biden Middle East policy. Middle East Institute discussion on “Assessing Biden’s Middle East Policy Approach, 2021-2023.”

• Clinton portrait. State Department reception for the portrait unveiling of former Secretary of State Hillary Clinton.

• GOP populism. Bipartisan Policy Center virtual discussion on “Is the Republican Party Becoming the Party of Populism?” focusing on pro-labor conservatives.

• ITC reform. R Street Institute discussion on “Patent Abuse, International Trade Commission (ITC) Reform and the Advancing America’s Interests Act.”

• Energy issues. Bipartisan Policy Center event on “Carbon Utilization Celebration: Panel, Expo, and Reception.”

• Ukraine situation. Carnegie Endowment for International Peace discussion on “Ukraine’s Quest for Justice.”

• Economic reports. S&P CoreLogic Case-Shiller HPI | FHFA House Price Index | Consumer Confidence | New Home Sales | Richmond Fed Manufacturing

• Energy reports. IEA updates its Net Zero Roadmap | Brent November options expire | API US inventory report.

KEY LINKS

Policy Updates