Senators: 1 in 5 Farmers at Risk Due to Declining Income, High Costs, and Interest Rates

News/Markets/Policy Updates: Nov. 21, 2024

— Equities today: Asian and European stock markets were mostly lower overnight. U.S. Dow opened 140-160 points higher, but then turned lower. In Asia, Japan -0.9%. Hong Kong -0.5%. China +0.1%. India -0.5%. In Europe, at midday, London +0.4%. Paris -0.2%. Frankfurt +0.3%.

U.S. equities yesterday: The Dow and S&P 500 both managed gains while the tech-heavy Nasdaq ended lower. The Dow was up 139.53 points, 0.32%, at 43,408.47. The Nasdaq fell 21.32 points, 0.11%, at 18,966.14. The S&P 500 edged up 0.13 point, 0.00%, at 5,017.11.

— Nvidia’s soaring revenue faces investor caution. Nvidia reported $35.1 billion in revenue for the third quarter, nearly double last year’s figure, with even higher revenues projected for the next quarter. Despite this growth, the company’s share price fell, reflecting sky-high investor expectations. But the losses have now been erased. As the world’s most valuable listed firm, Nvidia maintains its dominance in AI chip production.

— Deere stock rises on earnings beat despite weak guidance. Deere & Co. shares rose 1.8% after the company reported fiscal Q4 earnings of $4.55 per share, surpassing Wall Street’s expectation of $3.87. Equipment sales totaled $8.5 billion, below the anticipated $9.2 billion. Comparatively, last year’s Q4 saw EPS of $8.26 and sales of $13.8 billion. For fiscal 2025, Deere projects net income of $5–$5.5 billion, falling short of analysts’ $5.8 billion forecast. Despite ongoing challenges, the earnings beat provided a short-term lift to the stock.

— Ford cuts jobs amid EV challenges. Ford Motor plans to slash 14% of its European workforce — approximately 4,000 jobs, mainly in Germany and the U.K. — by 2027 to stay competitive in the region. The automaker is grappling with significant losses in its passenger EV business due to stiff competition from Chinese EV manufacturers, regulatory hurdles, and low demand. Production cuts for the Explorer and Capri electric SUVs and reduced shifts at Ford’s Cologne, Germany, plant are set for early 2025. Similar issues in the U.S. recently led Ford to pause F-150 Lightning production and furlough 730 workers. CFO John Lawler called for stronger EV purchase incentives in Germany to boost sales.

— As expected, the U.S. Justice Dept. asked a federal judge to approve the breakup of Google. It wants to force the tech giant to divest its Chrome web browser, among other things. In August a district court ruled that Google had maintained a monopoly over search for a decade. Google handles around 90% of America’s search queries, helping it become the world’s largest advertising business. If approved, the penalties could revolutionize how millions of Americans search for information and potentially disrupt the tight integration among many of Google’s key products and services. Google has promised to appeal.

— Crude oil futures were higher today, with U.S. crude around $70.15 per barrel and Brent around $74.15 per barrel.

Oil prices dipped Wednesday amid rising U.S. stockpiles and Norway’s output recovery. Oil prices declined on Wednesday, with Brent crude settling at $72.81 per barrel (-0.68%) and December WTI at $68.87 (-0.75%). The active WTI January contract fell to $68.75 (-0.71%). The drop was driven by higher-than-expected U.S. crude and gasoline stockpiles and the full restoration of Norway’s Johan Sverdrup oilfield, increasing supply pressures.

— Ag markets today: Corn and wheat futures modestly built on Wednesday’s gains during overnight trade, while soybeans rebounded from losses. As of 7:30 a.m. ET, corn futures were trading unchanged to fractionally higher, while soybeans and wheat were 2 to 3 cents higher. Front-month crude oil futures were around $1.50 higher, and the U.S. dollar index was modestly firmer.

Cash cattle negotiations remained limited on Wednesday, while opinions on the eventual direction of trade were mixed. Unless packers unexpectedly raise cash bids, it appears the bulk of this week’s trade may not take place until Friday, which is rather common during weeks featuring a Cattle on Feed Report.

The CME lean hog index is down another 26 cents to $87.83 as of Nov. 19, the eighth decline in the last nine days. While daily losses haven’t been severe, the seasonal decline has become persistent after a later-than-normal start. December lean hog futures finished Wednesday $7.305 below today’s cash quote, signaling traders currently expect an average weekly decline of nearly $2.50 in the cash index through contract expiration.

— Agriculture markets yesterday:
• Corn: December corn rose 3 cents to $4.30 1/4, marking the highest close since Nov. 11.
• Soy complex: January soybeans fell 8 cents to $9.90 1/2, nearer the session low. January soybean meal rose 90 cents to $291.30 and nearer the session high. January soybean oil fell 156 points to 43.36 cents, nearer the session low and hit a three-week low.
• Wheat: December SRW wheat rose 2 3/4 cents to $5.52 1/2, the highest close since Nov. 12, while December HRW wheat rose 3 1/2 cents to $5.61 3/4. December HRS futures rose 5 1/4 cents to $5.92.
• Cotton: March cotton rose 103 points to 70.28 cents and nearer the daily high.
• Cattle: Nearby December live cattle futures slipped 27.5 cents to $186.30 at the close. Expiring November feeder futures, which go off the board at noon tomorrow, rose 55 cents to $254.80, while most-active January gained 32.5 cents to $252.325.
• Hogs: December lean hog futures rallied 97.5 cents to $80.525 and closed near session highs.

— Fed focuses on labor market amid rate decision. Federal Reserve Governor Lisa Cook expressed reduced concern about further weakening in the labor market, citing persistently low unemployment levels. Cook, a voting member of the Federal Open Market Committee, will participate in the Dec. 17-18 meeting to decide on interest rates. Current market projections show a 55% probability of a quarter-point rate cut, with a 45% chance of no change, according to CME’s FedWatch tool.

— U.S. farmers face financial crisis amid plummeting income and high costs. Sen. Cindy Hyde-Smith (R-Miss.) and Sen. John Boozman (R-Ark.) have raised alarms over the financial struggles facing American farmers, warning that one in five could be pushed out of business due to declining farm income, high production costs, and soaring interest rates.

Despite USDA’s forecast of $116 billion in net farm income for 2024 — still 15% above the 10-year average — lawmakers argue it doesn’t reflect the dire circumstances of many individual producers, especially row crop producers.

Calls for federal aid are intensifying, with proposals like a $21 billion House bill targeting crop growers as a stopgap ahead of the delayed new farm bill.

Ag bankers report mounting financial pressure, with a 40% surge in new operating loans and signs of growing debt distress in the central Plains and Midwest. As forced farm liquidations loom, the fate of rural America hangs on swift and significant government intervention.

— Of note:

• A Chinese ship was stopped by the Danish navy as part of an investigation into a possible act of sabotage on data cables in the Baltic Sea.

• Go or stay? “The biggest consideration is, do we stay in China?” — Jason Junod, owner of skin-care company Bare Botanics.

• 950,304: Combined loaded container imports into the ports of Los Angeles and Long Beach in October, in 20-foot equivalent units, a 29% increase from last year and up 3.9% from September.

Market perspectives:

— Outside markets: The U.S. dollar index was little changed, with the euro, yen and British pound all weaker against the greenback. The yield on the 10-year U.S. Treasury note fell slightly, trading around 4.40%, with a mixed-to-negative tone in global government bond yields. Crude oil futures were higher, with U.S. crude around $70.15 per barrel and Brent around $74.15 per barrel. Gold and silver futures were higher, with gold around $2,665 per troy ounce and silver around $31.01 per troy ounce.

— Bitcoin prices were sharply higher overnight, hit a new record high and are closing in on $100,000.

— Argentina moves to deepen waterway to ship bigger cargoes. Argentina published the terms of a long-awaited tender for contractors to dredge its waterway that ships billions of dollars of crops a year to global markets. The international tender for a 30-year license includes a key provision to deepen the navigation channel in the Parana River, which will allow exporters to load bigger cargoes at the Rosario export hub. Dredgers have until the end of January to submit bids. Charterers and exporters have for years lobbied for a deeper channel as part of a broader push by Argentina’s grain industry to reverse a decline in competitiveness against Brazil and the United States.

— Global flour millers face potential supply crunch. Wheat growers in several exporting countries are reluctant to sell their crops with prices near four-year lows, traders, farmers and millers told Reuters, leaving flour makers with dwindling supplies and vulnerable to any potential upswing in prices. Typically grain processors buy wheat three to four months in advance. But millers in Asia, including Indonesia, the world’s No. 2 wheat importer, are currently covered for about two months. In the Middle East, most grain processors only have up to 45 days of supplies. Along with lack of supply from farmers, high interest rates have deterred millers from stocking up on wheat, leaving them exposed if prices rise.

— USDA daily export sales, all for 2024-25 marketing year delivery:
• 198,000 MT soybeans to China
• 135,000 MT soybeans to unknown destinations
• 133,000 MT soybean cake and meal for delivery to the Philippines

— Ag trade update: South Korea purchased 66,000 MT of corn expected to be sourced from the U.S. or South America. Taiwan purchased 80,000 MT of U.S. milling wheat.

— NWS outlook: Strong atmospheric river continues to impact northern California with heavy rain and life-threatening flooding through Friday... ...Developing storm system forecast to bring another round of gusty winds to the Pacific Northwest on Friday with heavy mountain snow spreading toward the northern Rockies this weekend... ...Unsettled weather expected across much of the Northeast and Great Lakes over the next few days, including the likelihood of heavy snow in the central Appalachians and higher elevations of northeastern Pennsylvania and southern New York.

(NWS)

Items in Pro Farmer’s First Thing Today include:
• Grains mildly firmer overnight
• Slow developing cash cattle trade
• Cash hog index continues to bleed lower

— GOP’s to-do list: Key spending and policy moves to watch. Congressional Republicans face a packed fiscal agenda, with deadlines and high-stakes decisions extending well into 2025. From disaster relief to debt ceiling negotiations, here are the top priorities shaping the budgetary landscape:

1. Stopgap spending into March. House Speaker Mike Johnson (R-La.) suggests extending current funding into March, allowing the GOP to shape fiscal 2025 funding under the next administration. This strategy aligns with Johnson’s bid for re-election as Speaker in January.

Appropriators’ pushback: Key lawmakers prefer resolving spending now to avoid burdening President-elect Trump with early funding battles. But those same appropriators could not get their job done when they had plenty of time to do so.

2. Disaster relief with bipartisan support. Congress is expected to approve billions in aid after Hurricanes Helene and Milton. Conservatives may push for offsets, though lawmakers like Sen. Tillis (R-N.C.) oppose such measures. (See next item for more.)

White House request: Total request of almost $100 billion, including $40 billion for FEMA and $24 billion for agriculture ($21 billion in direct disaster payments and $3 billion for other needs).

Farm-state lawmakers as usual will want to put their own stamp on ag disaster aid, including how much, and this time they will likely write specific language regarding how USDA should implement disaster aid after watching USDA falter on that score the past year.

3. Debt ceiling challenges: suspension lifting in January. While Treasury’s extraordinary measures could delay default until mid-2025, Republicans remain undecided on whether to address the debt limit independently or bundle it with broader legislation.

4. Tax cuts and immigration reform: likely part of reconciliation strategy. Republicans plan to extend Trump-era tax cuts and address border policy via budget reconciliation, circumventing Senate filibusters. Funding for a U.S./Mexico border wall is also on the table.

Immigration moves: Trump’s anticipated executive orders on immigration will likely be bolstered by GOP-backed spending initiatives.

One ag topic not on the likely list: a new farm bill. Instead, a one-year 2018 Farm Bill extension is very likely. Most blame Senate Ag Chairwoman Debbie Stabenow (D-Mich.) for the lack of a new farm bill even though farm-state leaders had two years to do so.

A stealth farm bill is being pushed by some farm-state lawmakers whereby language would be included in a must-pass bill that would increase reference prices and some crop insurance reimbursements. But with at least $24 billion coming in ag disaster-related funding, some conservative lawmakers may present some hurdles to the stealth farm bill plan.

— Bipartisan momentum for disaster aid in Senate. Senate appropriators signaled bipartisan support for the White House’s $98.4 billion supplemental funding request to bolster FEMA and disaster relief efforts in for impacted farm states. At a Wednesday hearing, Sen. Susan Collins (R-Maine) and Sen. Patty Murray (D-Wash.) underscored the importance of funding FEMA’s Disaster Relief Fund, though Murray described the request as “just the start.” FEMA Administrator Deanne Criswell highlighted additional challenges, including the strain on the National Flood Insurance Program.

Discussions on funding offsets remain absent, but lawmakers aim to advance the aid package during the lame-duck session.

— U.S. vetoes Gaza ceasefire resolution amid hostage concerns. The U.S. has vetoed a UN Security Council resolution calling for an immediate, unconditional, and permanent ceasefire in Gaza, citing insufficient measures to secure the release of hostages. U.S. officials criticized the resolution’s lack of condemnation for Hamas’ Oct. 7 attacks, in which seven American citizens remain hostages.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu’s recent $5 million reward and safe passage offer for the return of hostages drew backlash, with critics, including the mother of hostage Matan Zangauker, accusing him of endangering hostages by proposing “bribes to the captors.”

— Senate rebukes Sanders’ opposition to Israel arms shipments. Republican senators and most Democrats defeated Bernie Sanders’ (I-Vt.) effort to block new arms shipments to Israel, highlighting the limits of the anti-war movement. Eighteen Democrats supported at least one of Sanders’ resolutions aimed at halting military funding to avoid complicity in alleged Gaza atrocities. The Biden administration opposed the move, warning it could embolden terror groups. James Zogby of the Arab American Institute criticized the White House stance as disconnected from voters who favor pressuring Israel to end the war.

— ICC issues arrest warrants in Gaza conflict. The International Criminal Court (ICC) has issued arrest warrants for Israeli Prime Minister Benjamin Netanyahu, former defense minister Yoav Gallant, and Hamas officials, including Mohammed Deif. The ICC accuses Netanyahu and Gallant of war crimes in the Gaza conflict, while also labeling Hamas’s Oct. 7, 2023, attacks against Israel as crimes against humanity. The U.S., not a member of the ICC, maintains its non-participation. Two Hamas officials covered by the warrants have reportedly been killed during the ongoing war.

— U.S. to supply landmines to Ukraine, raising concerns. President Biden announced the U.S. will send antipersonnel landmines to Ukraine, reversing a 2022 ban. The mines, designed to self-deactivate, aim to bolster Ukraine’s defenses against Russian advances. However, rights groups warn of risks to civilians, adding to concerns over an already mine-contaminated Ukraine, where 20% of the land is affected.

— Another significant escalation in the Russia/Ukraine conflict. Russia’s launch of an intercontinental ballistic missile (ICBM) targeting Dnipro is a dramatic and provocative move, likely in response to Ukraine’s reported first use of British-made Storm Shadow cruise missiles. These missiles, known for their precision and long range, represent a step-up in Ukraine’s military capabilities. The Biden administration recently shifted its policies, now permitting Ukraine to utilize long-range ATACMS missiles and providing anti-personnel landmines as previously noted, further enhancing Ukraine’s tactical options.

Bottom line: This combination of increased Western military support and Russia’s retaliatory actions underscores the intensifying dynamics of the conflict, raising concerns about potential broader regional or global ramifications.

— Hefty U.S. soybean sales to China continue. USDA export sales data for the week ended Nov. 14 included activity for 2024-25 of net sales of 491 metric tons of corn, 121,125 metric tons of sorghum, 1,196,964 metric tons of soybeans, and 21,435 running bales of upland cotton. Activity for 2024 included net sales of 2,071 metric tons of beef and 90 metric tons of pork.

— Trump’s China Policy: Transactional or ideological? President-elect Donald Trump’s emerging administration reflects a tension between hawkish national security appointees and business-minded advisers, raising questions about the direction of U.S./China relations. The New York Times explores this dynamic, emphasizing Trump’s history of vacillation on China policy (link)

Hawkish Cabinet picks. Trump’s choices for national security roles, including Marco Rubio (Secretary of State) and Michael Waltz (National Security Adviser), suggest a confrontational stance. Waltz remarked last year, “The Chinese Communist Party has entered into a Cold War with the United States,” underscoring their goal to supplant the U.S.-led global order.

Business interests create tensions. In contrast, appointees like Howard Lutnick, slated for Commerce Secretary, and Elon Musk, a presidential adviser, signal potential moderation. Lutnick has advocated for “targeted tariffs” rather than sweeping trade restrictions. Trump himself remains more transactional than ideological, viewing tariffs as a bargaining tool.

Murky path forward. The NYT highlights Trump’s potential willingness to negotiate, despite hawkish pressures. His past actions — like lifting sanctions on ZTE at President Xi Jinping’s request — illustrate his pragmatic approach. Trump’s admiration for strongmen, including Xi, could shape diplomatic engagement.

The NYT article concludes: “This mix of incentives and ideas is creating significant uncertainty about the direction of one of the world’s most consequential relationships.”

— Push to revoke China’s Most Favored Nation status gains momentum. Efforts to strip China of its Most Favored Nation (MFN/Permanent Normal Trade Relations or PNTR)) trade status are intensifying, with new legislation introduced by Rep. John Moolenaar (R-Mich.) and a companion Senate bill backed by GOP Sens. Marco Rubio (Fla.), Josh Hawley (Mo.), and Tom Cotton. The move, aimed at enabling steep tariffs, reflects growing bipartisan frustration with China’s (Ark.) trade practices and a shift toward economic decoupling. While proponents argue it will bolster U.S. manufacturing and counter China’s influence, critics warn of retaliatory tariffs, higher costs for U.S. consumers, and damage to global trade norms. The legislation, influenced by former President Trump’s trade policies, could signal the end of an era for U.S./China trade relations and a potential rift with the World Trade Organization.

Of note: PNTR’s demise would also end selective sanctions on Chinese imports — including the 301 tariffs imposed by the first Trump administration and extended by President Joe Biden — to prod Beijing to curtail unfair trade practices. The Biden administration revoked Russia’s PNTR in 2022 after its full-scale invasion of Ukraine.

Impacts. Some Democrats say it’s too risky. Higher tariffs would “trigger retaliatory measures against our exporters, such as our farmers,” said Rep. Raja Krishnamoorthi (D-Ill.), ranking member of the House Select Committee on China. U.S. importers are also worried. Ending PNTR will end up “driving up prices, eliminating hundreds of thousands of jobs, and making it harder for American companies to compete globally,” said Craig Allen, president of the trade group the U.S./China Business Council.

— Trump’s tariff plans: Importers, exporters, and the risks of a trade war. The public debate surrounding President-elect Donald Trump’s proposed tariffs has largely focused on their impact on U.S. importers and consumers. However, according to Bloomberg, experts caution that American industries reliant on exports could also face significant challenges in a trade war.

Focus on exporters. Mary Lovely, a senior fellow at the Peterson Institute for International Economics, highlighted the lack of attention to exports during the presidential campaign. “Unfortunately, we haven’t heard a lot about exports in this campaign from either side,” she said, emphasizing the critical role exporters play. “Our exporters are our biggest, most productive, most innovative companies.”

The stakes are high for U.S. manufacturing, as the country is the second-largest exporter of manufactured goods globally. In 2022, exports supported 6.7% of U.S. employment, with every $1 billion in exports estimated to sustain 4,100 jobs, according to government data.

Lovely warned about the potential consequences of Trump’s tariff plans, particularly for domestic producers. “We’re going to see higher prices on the things that our producers use to produce in the United States,” she said at the Port of Los Angeles. “They’ll be hurt with this price increase, and they will find in the global marketplace that their competitors are not hamstrung in the same way.”

The Port of Los Angeles and the neighboring Port of Long Beach, major hubs of U.S./China trade, are already witnessing disruptions. Before the 2018 trade war, 57% of the Port of LA’s business was with China, a figure that has since dropped to 43%. Yet, the ports have experienced record cargo flows as importers rush to stockpile goods before potential tariffs hit.

The uncertainty surrounding Trump’s tariff policies is a significant concern for manufacturers. His proposal to impose a 10-20% tax on all imports has left supply chain managers in a tough spot. “It’s a very difficult time to place the kind of $20 million, $50 million bets that manufacturers have to place to build new plants,” Lovely noted.

Moreover, Trump’s pledge to penalize goods made with Chinese components, regardless of where they’re assembled, could drive up costs and force manufacturers to restructure supply chains. “If the US says no Chinese content, no matter what the good, what the product… supply chains will be created at higher expense just to serve the United States,” said Lovely.

Boeing, a major U.S. exporter, has expressed concern about the potential fallout. According to the Wall Street Journal, Boeing’s CEO discussed the impact of tariffs with Trump, as a trade war with China could jeopardize the company’s sales to Chinese airlines.

Trump’s broader tariff agenda faces hurdles, including potential pushback from Congress and industry stakeholders. Lovely predicted that Congress could intervene, with representatives advocating for constituents affected by international trade. “I think we’ll see action from Congress where individual districts are saying, ‘Hey, you know, trade with Germany is really important to us,’ or ‘Hey, you know, we have a South Korean auto plant in our district,’” she told Bloomberg.

Trump’s threats against individual companies, such as John Deere, have raised additional concerns. “Retaliatory tariff for movements of investment outside the United States has just not been done,” Lovely explained. “I don’t see how the president could do it unless there was some legislation in Congress.”

Bottom line: While Trump’s tariff plans promise high drama and economic uncertainty, their broader implementation and consequences remain unclear, leaving industries and policymakers in a precarious position.

— China announces policy measures to boost foreign trade. China’s commerce ministry announced a series of policy measures aimed at boosting foreign trade, including expanding exports of commodities such as agricultural products and stepping up support for small trading firms. Commerce officials said they would encourage financial institutions to provide more products to manage currency risks and to strengthen macro policy coordination to keep the yuan “reasonably stable,” the ministry said.

— China advisers call for steady 5% 2025 economic growth goal, stronger stimulus. Chinese government advisers are recommending Beijing should maintain an economic growth target of around 5.0% for next year, pushing for stronger fiscal stimulus to mitigate the impact of expected U.S. tariff hikes on the country’s exports, Reuters reported. Four of the six advisers who spoke with Reuters favor a 2025 target of around 5%. One adviser recommends a goal of “above 4%” and another suggests a 4.5% to 5% range. A Reuters poll this week predicted China will grow 4.5% next year, but also tipped that tariffs could impact growth by up to 1 percentage point. The advisers, who do not participate in decision-making, will submit their proposals to the closed-door annual Central Economic Work Conference next month, when top leaders discuss policies and goals for next year. The recommendations of the advisers are considered by policymakers in the final decision-making process.

— Brazil, China sign wide-ranging deals, including ag products. Chinese President Xi Jinping’s state visit to Brazil has resulted in a significant strengthening of economic ties between the two nations. During the visit, Brazil and China signed 37 wide-ranging agreements covering various sectors, including agriculture, technology cooperation, trade and investments, infrastructure, industry, energy, and mining.

Agricultural agreements. One of the most notable outcomes for the agricultural sector is China’s permission for Brazil to export several new products:
• Sorghum
• Grapes
• Sesame
• Fish products

The sorghum deal is particularly significant. While Brazil’s current sorghum production is relatively low at 4.4 million metric tons in 2023-24, this agreement could potentially boost production. Brazil currently holds only a 0.29% share of the international sorghum market, but with China importing $1.83 billion worth of sorghum last year (primarily from the United States), this presents a substantial opportunity for Brazilian farmers.

Brazilian negotiators have been working to secure export agreements for other agricultural products, including:
• Pork
• Beef offal
• Distillers dried grains (DDG)

However, these categories require updated health protocols, which may delay progress until 2025.

Belt and Road Initiative. Despite deciding not to formally join China’s Belt and Road Initiative (BRI) last month, Brazil has taken steps to collaborate with the project:
• Signed a protocol with China regarding “synergies” related to BRI.
• Formed two task forces focused on: Financial cooperation and Productive, sustainable development. These task forces have a two-month deadline to identify priority Brazilian projects eligible for BRI financing.

The agreements signed during Xi’s visit mark a significant deepening of economic ties between Brazil and China. This comes at a time when Brazil is working to realign its international relationships under President Lula’s leadership. The collaboration extends beyond agriculture, encompassing technology, infrastructure, and various other sectors, potentially opening new avenues for Brazilian exports and Chinese investments in the country.

— USITC approves duties on shrimp imports from four countries. The U.S. International Trade Commission (USITC) voted on Nov. 19 to impose duties on frozen warmwater shrimp imports from Ecuador, India, Vietnam, and Indonesia. The USITC determined that these imports have materially injured the US shrimp industry. According to the Department of Commerce (DOC), shrimp from Indonesia is being sold in the US at below fair value, while imports from Ecuador, India, and Vietnam are subsidized by their respective governments. Commissioners Amy Karpel, David Johanson, Rhonda Schmidtlein, and Jason Kearns supported the decision. DOC will now issue countervailing and antidumping duty orders accordingly.

— EU trade ministers are convening in Brussels to deliberate on significant aspects of the Union’s trade policy. This meeting, part of the Foreign Affairs Council’s trade configuration, will focus on several key topics:

• Future of EU trade policy: The ministers will assess the trajectory of the EU’s trade strategy, particularly considering ongoing negotiations with various partners.
• EU/U.S. trade relations: The discussions will address the current state of trade relations with the United States, especially following the recent U.S. presidential elections. Finland’s Minister for Foreign Trade and Development, Ville Tavio, emphasized the importance of this relationship, advocating for a broader view that seeks mutually beneficial areas for cooperation while preparing for potential shifts in U.S. trade policy.
• World Trade Organization (WTO) reform: A significant portion of the meeting will be dedicated to discussing reforms within the WTO. This includes restoring the functionality of its dispute settlement system and advancing discussions on electronic commerce agreements. The ministers will also explore issues related to state aid within the WTO framework.
• Ongoing bilateral trade negotiations: The EU is currently engaged in negotiations with several countries and regions, including Mexico, Mercosur, Australia, and Indonesia. The ministers aim to expedite these negotiations to enhance market access for EU businesses and strengthen international partnerships.

Of note: Finland’s participation underscores its commitment to concluding new trade agreements swiftly. Minister Tavio highlighted that such agreements are crucial for opening new markets and diversifying supply chains, thereby enhancing economic resilience.

— WTO members criticize EU deforestation rule as trade-restrictive. The EU’s Regulation on Deforestation-Free Products (EUDR) continues to face heavy criticism from global trade partners despite a one-year implementation delay. Critics argue the EUDR constitutes a quantitative restriction (QR) on imports and creates an uneven playing field through its new “no risk” category for countries deemed low risk for deforestation. Key points of contention include:

• WTO notification debate: Brazil and others demand the EU classify EUDR as a QR under WTO rules, but the EU asserts it falls under taxation and regulation rules.
• Compliance concerns: Importers and firms warn of high compliance costs and disrupted supply chains, with benchmarking systems still under development.
• Global pushback: Nations including the U.S., Brazil, and Australia stress trade imbalances and demand further delays or revisions.

Upshot: While the EU defends the EUDR as environmentally necessary, critics argue its execution undermines international trade norms and fairness.

— Virginia court blocks Youngkin’s exit from regional carbon market. A Virginia circuit court has ruled Governor Glenn Youngkin’s attempt to withdraw the state from the Regional Greenhouse Gas Initiative (RGGI) unlawful, marking a victory for environmental activists. Circuit Judge C. Randall Lowe stated that only the General Assembly has the authority to repeal the RGGI Regulation, deeming the governor’s unilateral action “null and void.” The Southern Environmental Law Center, representing environmental groups, brought the lawsuit. Democrats in the General Assembly praised the ruling, emphasizing the program’s benefits in funding flood mitigation, home weatherization, and low-income energy aid. Youngkin, who views RGGI as a hidden tax inflating utility bills, plans to appeal the decision.

— DOE report charts path for Sustainable Aviation (SAF) fuel expansion. The Department of Energy (DOE) has released its SAF Grand Challenge Roadmap Implementation Framework, outlining strategies to produce 3 billion gallons of sustainable aviation fuel (SAF) by 2030 and 35 billion gallons by 2050 to meet domestic jet fuel demand. Key points include:

• Agricultural impact: Significant expansion of oilseed production and adoption of cover crops are essential. Cover crops, deployed on potentially “hundreds of millions of acres,” are currently adopted on less than 10% of farmland nationally. The report calls for region-specific business models and policies to incentivize farmers economically and sustainably.
• Ethanol industry challenges: Meeting SAF carbon intensity (CI) targets requires advancements, including climate-smart agriculture, low-CI sugar feedstocks from residues, and expanded carbon pipeline infrastructure. Federal programs addressing CI reductions remain limited.
• Research needs: Determining sustainable residue removal levels and boosting corn and soybean productivity are critical for SAF feedstock expansion.

While the report highlights opportunities, it emphasizes the need for financial incentives to drive farmer participation and CI improvements, particularly in corn and soybean systems.

— Ground beef recall due to E.coli contamination. Wolverine Packing Co., a Detroit-based firm, has recalled 167,277 pounds of ground beef potentially contaminated with E.coli, the USDA’s Food Safety and Inspection Service (FSIS) announced. The recall follows reports of 15 illnesses in Minnesota between Nov. 2 and Nov. 10, linked to ground beef from the company. Testing by Minnesota’s Department of Agriculture confirmed the contamination. The affected products, produced on Oct. 22 with a use-by date of Nov. 14, were distributed to restaurants nationwide.

WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | California phase-out of gas-powered vehicles | RFS | IRA: Biofuels | IRA: Ag | | Russia/Ukraine war, lessons learned | | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | New farm bill primer | | Gov’t payments to farmers by program | Farmer working capital | USDA Ag Outlook Forum |