Tropical Storm Alberto First Named Storm of Hurricane Season

Stabenow uses CBO report to defend her farm bill stance | CBO: Federal budget deficit grows by $400 billion

MARKET FOCUS

• Citigroup: AI to displace more jobs in banking industry than any other sector
• Norinchukin Bank, a leading Japanese ag bank, facing significant financial challenges
• Switzerland’s central bank cut its main interest rate from 1.5% to 1.25%
• Bank of England kept its key rate at a 16-year high of 5.25%
• Number of people claiming unemployment benefits in the U.S. fell by 5,000 to 238,000,
• U.S. housing starts dropped by 5.5%, lowest since July 2020
• Japanese yen reaches historic lows against Swiss franc and British pound
• Central banks worldwide expected to increase their gold reserves significantly
• WTI crude oil perspective from the Sevens Report
• Ag markets today
• India raises crop support prices
• Ag trade update
• NWS weather outlook
• Pro Farmer First Thing Today items

BALTIMORE BRIDGE COLLAPSE

• Cargo ship Dali preparing to depart Baltimore, with six vessels assisting

CONGRESS

• Special Report on CBO updated forecasts

ISRAEL/HAMAS CONFLICT

• Israel issues strong warning to Hezbollah of a potential “all-out war”
  

RUSSIA & UKRAINE

• North Korean leader Kim Jong Un & Russian President Vladimir Putin sign pact
• Ukraine and EU extend freight liberalization agreement for another year
  

PERSONNEL

• Dutch PM Mark Rutte set to be next NATO leader after rival withdraws from race
• Parsons to lead NASS
  

CHINA

• China’s central bank hints at major policy shift
• U.S. soybean imports by China accelerate in May but still lagging
• Perspective on EU additional tariffs on Chinese electric vehicles
• Perspective on Beijing investigation into allegations of European dumping of pork
  

TRADE POLICY

• U.S. halts some new avocado shipments from Michoacan, Mexico
• USTR seeks comments on trade track for APEP
  

ENERGY & CLIMATE CHANGE

• Brazil upholds 18% tariff on U.S. ethanol imports, drawing criticism from U.S. industry
  

LIVESTOCK, NUTRITION & FOOD INDUSTRY

• USDA expected to announce new proposed rule on livestock markets
• Former CDC Director predicts bird flu virus will cause next pandemic
• Michigan announces financial aid for HPAI-Impacted dairy farms to support research
• KPMG survey: 41% of consumers plan to spend less on restaurants this year
  

HEALTH UPDATE

• Yellen to announce new sanctions against fentanyl traffickers
  

POLITICS & ELECTIONS

• Virginia Fifth District cliff-hanger
• Cole easily beats primary opponent
• Recent Fox News poll: Biden pulls ahead of Trump for first time since October
• Biden and Trump are set to face off in historic presidential debate on CNN on June 27
  

— Equities today: Asian and European stock indexes were mixed to firmer overnight. U.S. Dow opened around 30 points lower and then turned higher. In Asia, Japan +0.2%. Hong Kong -0.5%. China -0.4%. India +0.2%. In Europe, at midday, London +0.4%. Paris +1%. Frankfurt +0.6%.

U.S. equities Tuesday: All three major indices posted subdued gains in the wake of disappointing retail sales data, but the Nasdaq and S&P 500 still registered new record finishes. The Dow ended up 56.76 points, 0.15%, at 38,834.86. The Nasdaq was up 5 21 points, 0.03%, at 17,862.23. The S&P 500 was up 13.80 points, 0.25%, at 5,487.03.

— On Wednesday, the MSCI Asia ex-Japan index leaped more than 1% to its highest since April 2022, and the MSCI World index hit a record high.

— Ag markets today: Corn, soybean and wheat futures faced price pressure during overnight trade coming off Wednesday’s holiday. As of 7:30 a.m. ET, corn futures were trading mostly 2 cents lower, soybeans were 3 to 4 cents lower, and wheat futures were 5 to 6 cents lower. The U.S. dollar index was around 150 points higher, and front-month crude oil futures were trading modestly firmer.

Packers actively seeking cattle in northern market. Packers reportedly actively raised cash cattle bids in the northern market to obtain supplies, as cattle numbers are tight. So far, feedlots have passed, suggesting there could be another significant increase in the average cash price this week. Cattle supplies are more plentiful in the Southern Plains, so prices won’t be as strong there.

Pork cutout slips. The pork cutout dropped 37 cents on Wednesday, falling for a third straight day, led by a $5.88 decline in primal bellies. Belly prices fell nearly $19.00 over the past three days.

— Agriculture markets Tuesday:

• Corn: July corn rose 6 1/4 cents to $4.50, forging a high-range close.
• Soy complex: July soybeans rose 16 1/4 cents to $11.74, near the session high after hitting a seven-week-low early on. July soybean meal gained $4.30 at $364.60 and near mid-range. July soybean oil closed up 57 points at 44.30 cents, nearer the session high and hit a two-week high.
• Wheat: July SRW wheat fell 9 1/2 cents to $5.82, while July HRW futures fell 4 3/4 cents to $6.00 3/4. Both forged two-month-low closes. July HRS futures fell 5 3/4 cents to $6.32 3/4.
• Cotton: July cotton closed up 109 points at 71.03 cents and nearer the session high.
• Cattle: Bearish short-term expectations seemed to depress the cattle markets, with the expiring June live cattle contract dipping 37.5 cents to $186.675 and most-active August falling 70 cents to $182.10. August feeder futures tumbled $1.375 to $259.95.
• Hogs: August lean hog futures sank 30 cents to $91.575 while nearby July futures closed $1.60 lower to $93.775.
  

— Quotes of note:

• Fedspeak. The list of Fed speakers continues this week with Kashkari (8:45 a.m. ET) and Barkin (4:00 p.m. ET).
  
• According to Citigroup, artificial intelligence is expected to displace more jobs in the banking industry than in any other sector, with about 54% of banking jobs having high potential for automation. Over the past year, major banks have increasingly experimented with AI. Citigroup plans to enable its 40,000 coders to experiment with various AI technologies. Meanwhile, JPMorgan is actively recruiting AI talent, and Deutsche Bank is employing AI to analyze wealthy clients’ portfolios.
  
• “Something went wrong.” — Boeing CEO David Calhoun to a Senate panel investigating safety issues, whistleblower retaliation and other problems at the aircraft manufacturer.
  

— Norinchukin Bank, a leading Japanese agricultural bank with over $357 billion in assets, is facing significant financial challenges due to the prolonged higher interest rate environment. Known as Japan’s “CLO whale” for its aggressive pursuit of yield during periods of low rates, the century-old agricultural bank is now experiencing substantial losses. The bank has announced plans to sell $63 billion of low-yielding U.S. and European government bonds, which have become unprofitable due to rising shorter-term funding costs. Consequently, Norinchukin Bank has warned that its fiscal year losses could reach 1.5 trillion yen (approximately $12.8 billion), tripling the estimate made just a month ago.

To mitigate the impact of higher interest rates, the bank is overhauling its portfolio by selling a third of its sovereign bond holdings and shifting its investments to other asset classes, including collateralized loan obligations (CLOs) and both domestic and overseas bonds. This predicament highlights the ongoing risks within the financial system, even 15 months after the collapse of Silicon Valley Bank (SVB). Norinchukin Bank, like many investors, had anticipated falling rates to trigger a debt rally after two years of declines, but signals from the Federal Reserve and other central banks indicating no rush to cut rates have caught them off guard.

This issue is not isolated to Norinchukin Bank; the higher-for-longer rate environment has resulted in paper losses for many banks and fund managers. U.S. banks, for example, had $516.5 billion in unrealized losses in their securities portfolios as of the end of March.

Despite the significant losses, both Norinchukin Bank and the Japanese government remain confident in the bank’s resilience. A spokesperson for the bank stated that the unrealized losses have been accounted for in its capital ratio and will not affect its soundness. The Ministry of Agriculture, Forestry, and Fisheries has also pledged to closely monitor the bank’s business conditions, in collaboration with the Financial Services Agency.

— Switzerland’s central bank cut its main interest rate from 1.5% to 1.25%. The bank previously pared its key rate in March, making it the first major central bank to loosen monetary policy after a prolonged period of high inflation. The decision comes two weeks after the European Central Bank cut rates for the first time since 2019.

— Bank of England kept its key rate at a 16-year high of 5.25%, with only two policymakers voting for a rate cut, unchanged from May.

— In the second week of June, the number of people claiming unemployment benefits in the U.S. fell by 5,000 to 238,000, slightly above market expectations of 235,000. This marks the second-highest level since August 2023, following an upwardly revised 243,000 claims from the previous week. Additionally, ongoing unemployment claims rose by 15,000 to 1,828,000 in the first week of June, the highest since January, indicating that finding suitable employment is becoming more difficult for the unemployed. These results suggest a softening U.S. labor market, potentially supporting the case for multiple Federal Reserve rate cuts this year if inflation continues to trend toward its target. The four-week moving average for initial claims, which smooths out weekly fluctuations, increased by 5,500 to 232,750. Non-seasonally adjusted claims decreased by 8,833 to 227,213, with an increase in Connecticut (2,228) offsetting a significant decline in California (-3,794).

— In May 2024, U.S. housing starts dropped by 5.5% to an annualized rate of 1.277 million, the lowest since July 2020, falling short of the forecasted 1.37 million. This decline reflects the renewed impact of high interest rates on the housing market. Single-family housing starts decreased by 5.2% to 982,000, the lowest since October, while starts for buildings with five or more units fell by 10.3% to 278,000, a two-month low. Regionally, housing starts plummeted by 19% to 149,000 in the Midwest, dropped 8.5% to 733,000 in the South, and declined 2.5% to 77,000 in the Northeast. Conversely, starts in the West surged by 10.4% to 318,000.

Market perspectives:

— Outside markets: The U.S. dollar index was higher, with the euro and British pound weaker against the greenback. The yield on the 10-year U.S. Treasury note was higher, trading around 4.24%, with a mixed-to-negative tone in global government bond yields. Crude oil futures were mixed ahead of U.S. gov’t inventory data, with U.S. crude little changed at around $81.55 per barrel while Brent higher at around $85.30 per barrel. Gold and silver futures were up ahead of U.S. trading, with gold around $2,354 per troy ounce and silver around $30.40 per troy ounce.

— Japanese yen reached historic lows against the Swiss franc and British pound. Recent forex interventions targeting the U.S. dollar have had limited success in strengthening the yen more broadly. Specifically:

• The yen hit a new low against the Swiss franc on Tuesday.
• It also touched a 16-year low against the British pound and a 17-year low against the New Zealand dollar in the past week.

The yen’s weakness can be attributed, in part, to Japan’s interest rate gap with the U.S. This gap has encouraged carry trades, where investors borrow yen at low interest rates to invest in assets denominated in higher-yielding currencies.

— Central banks worldwide are expected to increase their gold reserves significantly over the next year amid growing pessimism about the U.S. dollar, according to a World Gold Council report. Over 80% of survey respondents anticipate a rise in global bullion holdings, marking the highest proportion since the survey began. Nearly 30% of central banks plan to add to their gold reserves, including 13% in advanced economies. Emerging markets have maintained their positive outlook on gold, now joined by 57% of advanced economy central banks, up from 38% in 2023.

This shift is driven by several factors: mitigating risks, preparing for political and economic uncertainties, leveraging gold’s long-term value, and its performance during crises. The dollar’s appeal has diminished due to concerns about its weaponization, especially after sanctions on Russia following Ukraine’s invasion in 2022, and domestic issues in the U.S. related to the upcoming presidential election.

Central banks have already been major purchasers of gold for two years, with 1,037 metric tons added in 2023, the second highest annual purchase in history. This positive sentiment towards gold continues despite record-high prices in early 2024, with futures peaking at $2,448.8 per troy ounce on April 12. According to Shaokai Fan, global head of central banks at the World Gold Council, the broader trend of gold as a strategic asset persists despite potential short-term influences like price fluctuations.

— WTI crude oil perspective from the Sevens Report:

• Technical View: Oil prices have retreated sharply from the 2024 highs reached in early April and the technical outlook is shifting to more neutral than bullish.
• Primary Trend: Bullish (since the week of Feb. 12, 2024).
• Key Resistance Levels: $78.99, $80.28, $81.90.
• Key Support Levels: $76.50, $75.38, $74.02.

— India raises crop support prices. India raised the price at which it will buy new-season common rice paddy from farmers by 5.4% to 2,300 rupees ($27.57) per 100 kg. The increase reflects the rising cost of production, which will encourage farmers to boost production, said the president of the Rice Exporters Association of India. The government also raised support prices for cotton, soybeans, corn, ground nuts and pigeon peas.

— Ag trade update: Japan purchased 84,667 MT of milling wheat via its weekly tender, including 29,617 U.S., 32,590 MT Canadian and 22,460 MT Australian. Thailand purchased 60,000 MT of Ukrainian feed wheat.

— NWS weather outlook: Heavy rain/flooding threats and gusty winds over South Texas gradually decrease today as Tropical Storm Alberto makes landfall in Mexico and dissipates... ...Heavy rain and flash flooding concerns increase across the northern Plains to the upper Midwest later Thursday into Friday as scattered thunderstorms could result in localized flooding issues from the southern High Plains to the Four Corners... ...A heat wave will persist over the Great Lakes, Ohio Valley, and portions of the Northeast into the weekend as heat intensifies in the western U.S.

Items in Pro Farmer’s First Thing Today include:

• Grains weaker overnight
• IKAR raises Russian wheat crop forecast
• Exchange increases Argentine wheat planted area estimate

— After nearly three months in the area, the cargo ship Dali is preparing to depart Baltimore, with six vessels assisting it. The 984-foot, 124,000-ton ship lost power and crashed into a support pier of the Francis Scott Key Bridge on March 26, causing significant damage and blocking Baltimore’s shipping channel for over two months. The collision killed six construction workers and left the ship stuck for 55 days before it was towed to port. Crews have since worked to ready it for a voyage to Norfolk, Virginia.

The Dali lacks both anchors, requiring a highly choreographed departure directly to a berth in Norfolk. Four tugboats, a Coast Guard cutter, and another work boat will escort it on the 16- to 20-hour journey. The ship’s bow, still bearing some wreckage from the collapse, has been secured for the transit. After repairs in Norfolk, the Dali will head to another shipyard for more extensive work.

The Chesapeake Bay transit follows the clearing of the shipping channel near Fort McHenry, enabling the Port of Baltimore to resume operations. Plans are underway to identify a builder for the $1.7 billion replacement of the Key Bridge, expected to open by October 2028.

— CBO releases updated budget and economic outlook: 2024 to 2034. The Congressional Budget Office (CBO) released its updated projections for the federal budget and economy from 2024 to 2034. Link to report. Link to our Special Report on the topic.

— Israel has issued a strong warning to Hezbollah of a potential “all-out war” after Hezbollah released a video allegedly taken by a drone, showing various Israeli military and civilian sites. Israeli Foreign Minister Israel Katz emphasized that any such war would lead to the destruction of Hezbollah and significant damage to Lebanon. The footage, analyzed by CNN, appears to be taken over multiple hours or days and shows sensitive locations in and around Haifa, including military installations and civilian areas.

This development comes amid rising tensions and cross-border attacks following the Oct. 7 Hamas attacks and subsequent Israeli military operations in Gaza. The video is seen as an act of “psychological terror” by Haifa’s mayor, who has called for a defense plan for the city. Israel’s military has been preparing for the possibility of intensified conflict, validating operational plans for an offensive in Lebanon and increasing troop readiness.

Hezbollah, backed by Iran and one of the most powerful paramilitary forces in the Middle East, has claimed that this video is just the beginning, suggesting more to come. Hezbollah’s actions are in solidarity with the Palestinian people, according to their statements, and they have fired over 5,000 rockets, missiles, and drones at northern Israel since Oct. 7.

In response, Israel has conducted numerous strikes in Lebanon and evacuated thousands of residents from the northern border area. The U.S. is attempting to mediate and de-escalate the situation through diplomatic efforts, with special envoy Amos Hochstein visiting both Israel and Lebanon.

— North Korean leader Kim Jong Un and Russian President Vladimir Putin signed a pact committing their countries to aid each other if attacked. Kim described the agreement as “peaceful and defensive,” stating that it elevates their bilateral ties to the level of an alliance. Analysts suggest this deal increases the risk of Moscow becoming involved in an Asian regional conflict. Following the signing, Putin arrived in Vietnam.

— Ukraine and the European Union have extended their freight liberalization agreement for another year, allowing Ukrainian cargo to enter the EU without permits. Ukrainian Prime Minister Denys Shmyhal announced this on social media, highlighting the extension as a significant step toward Ukraine’s EU membership. The agreement, initially signed on June 29, 2022, has been renewed annually. However, the influx of Ukrainian goods has sparked protests in some EU border countries.

— Dutch PM Mark Rutte set to be next NATO leader after rival withdraws from race. Romanian President Klaus Iohannis has withdrawn his bid for the leadership of the NATO military alliance and thrown his support behind the favorite contender for the post, Dutch Prime Minister Mark Rutte.

— NASS announces Joseph L. Parsons as its new Administrator as of June 16; this follows Administrator Hubert Hamer’s retirement in March. Parsons, who was Acting Administrator and before that Associate Administrator, has been serving American agriculture through NASS for more than 37 years, since joining the federal service in 1985. Throughout his career with NASS, Parsons has served in several leadership roles, including but not limited to Associate Administrator where he was responsible for oversight and coordination of agency operations and the agricultural statistics program carried out within the various organizational units in NASS. He also served as chair of USDA’s Agricultural Statistics Board and director of NASS’s Methodology Division. Joseph J. Prusacki, a NASS employee since 1984 and former director of NASS’s National Operations Division in St. Louis, Mo., remains NASS’s acting Associate Administrator until the position is filled later this year.

— China has loosened its control over the yuan by setting the daily reference rate at its weakest level since November, coinciding with the dollar nearing its peak for the year. Additionally, China’s central bank has indicated it is considering trading government bonds in the secondary market to manage liquidity levels, signaling a significant potential shift in the country’s monetary policy.

— U.S. soybean imports by China accelerate in May but still lagging. Of the 10.22 MMT of soybeans China imported during May, 8.80 MMT originated from Brazil with 1.27 MMT coming from the United States. While Brazil remained China’s main soybean supplier, its shipments declined 19% from May 2023, while U.S. arrivals increased 156%. For the first five months of the year, soybean shipments to China from Brazil totaled 24.71 MMT, up 23% from the same period last year, while arrivals from the U.S. fell 34% to 10.85 MMT.

— The European Union has announced additional tariffs of up to 38% on Chinese electric vehicles (EVs), set to begin on July 4 unless an agreement is reached. These tariffs, added to the existing 10% import duty, specifically target pure-electric cars, exempting plug-in hybrids and fuel cell cars. The levies range from 17.4% to 38.1%, depending on the carmaker’s cooperation with the EU’s anti-subsidy investigation.

This move could impact Chinese EV manufacturers in the short term, but Moody’s believes the long-term effect will be limited as most Chinese car sales are domestic, with exports accounting for only 16% of total sales in 2023. However, Chinese carmakers might seek other markets and could potentially establish production facilities in the EU to offset losses.

For European carmakers, the tariffs may provide a short-term advantage by narrowing the price gap between local and Chinese-built EVs. However, EU carmakers producing in China could face higher tariffs on exports back to Europe, and brands like VW and Mercedes-Benz could be affected by potential Chinese retaliation.

Moody’s predicts the initial economic impact will be minor for both China and the EU, but sustained trade barriers could complicate investment strategies and supply chains, posing long-term risks for both regions.

— Beijing recently announced an investigation into allegations of European dumping of pork. If that leads to tariffs the effect will be concentrated in leading suppliers like Spain — where China was the second-biggest market for exporters last year — as well as Denmark and the Netherlands, according to Bloomberg (link). The effect on China might be limited. It gets most of the meat from domestic farmers anyway, and can turn to other exporting countries like Brazil and the U.S. if needs be, limiting the risk of shortages or higher prices.

— The U.S. has halted some new avocado shipments from Michoacan, Mexico, due to an incident threatening the safety of American agricultural inspectors. USDA informed the Avocado Exporting Producers and Packers of Mexico (APEAM) on June 14 that inspections would pause following reports of two inspectors being held and attacked amid a protest. A USDA spokesperson confirmed the suspension of avocado and mango inspections in Michoacan until the security situation is assessed and safeguards are in place.

Mexican exports are not entirely blocked, but non-inspected shipments cannot proceed, though those already in transit will not be affected. APEAM President Julio Sahagun Calderon assured that the group is working with authorities to resume exports and noted that the incident was beyond the sector’s control. Avocado exports from Jalisco remain unaffected.

U.S. Ambassador Ken Salazar is scheduled to meet Michoacan state Governor Alfredo Ramirez Bedolla and export representatives next week to discuss regional security.

This suspension marks the second such disruption in the past two and a half years due to safety concerns in Michoacan, a state plagued by gang violence and extortion. A similar ban in February 2022, also due to a threat against an inspector, lasted a week while security measures were implemented.

Of note: Another Mexican state, Jalisco, now exports avocados to the U.S., and its inspections are currently business as usual.

Background: According to USDA:

• Mexico provided 89% of the record 2.78 billion pounds of fresh avocados that the U.S. brought in last year.
• On average, more than 63% of U.S. mango imports come from Mexico.

— USTR seeks comments on trade track for APEP. The Office of the U.S. Trade Representative (USTR) is seeking public comments on developing trade-related initiatives for the Americas Partnership for Economic Prosperity (APEP), which includes the U.S., Barbados, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru, and Uruguay. Trade ministers from these countries will meet in Ecuador in August 2024 to review progress and plan for a 2025 leaders’ summit in Costa Rica. USTR is requesting comments on issues like customs and trade facilitation, supply chain resilience, and sustainability, focusing on clean energy, medical supplies, and semiconductors. This initiative is not aimed at creating new free trade agreements but will build on existing ones without duplicating current efforts. Comments are due by July 22. Link for details.

— Brazil upholds 18% tariff on U.S. ethanol imports, drawing criticism from U.S. industry. Brazil’s Foreign Trade Chamber (CAMEX) at the Ministry of the Economy has voted to uphold an 18% tariff on ethanol imports from the United States. This decision has drawn criticism from U.S. industry groups, who argue that the tariff unfairly disadvantages American ethanol producers in the Brazilian market.

Background. The tariff, which has been in place since 2017, was initially implemented as a temporary measure to protect Brazil’s domestic ethanol industry. The duties were suspended in March 2022 which led to a rebound in U.S. exports of the primarily corn-based fuel. The tariffs were put back in place in 2023 at 16% which again reduced U.S. ethanol exports and they were further increased to 18%. However, the recent vote by CAMEX means that the 18% tariff will remain in effect for the foreseeable future.

“We are deeply disappointed by Brazil’s decision to maintain this protectionist tariff on U.S. ethanol imports,” said a spokesperson for the Renewable Fuels Association. “This tariff undermines the spirit of free and fair trade between our nations and puts American ethanol producers at a significant disadvantage.”

The U.S. has previously threatened to impose retaliatory tariffs on Brazilian goods if the ethanol tariff remained in place.

Brazil has defended the tariff as a necessary measure to safeguard its domestic ethanol industry and ensure a stable supply of biofuels for its transportation sector.

— USDA is expected to announce a new proposed rule on livestock markets following the Office of Management and Budget’s (OMB) six-month review of a rule concerning unfair practices, undue preferences, and harm to competition under the Packers and Stockyards Act. The proposed rule aims to clarify conduct that may violate the Act, promoting market growth, fair trade practices, and competition, while protecting livestock and poultry growers. USDA stated that this action addresses long-standing issues related to competitiveness and potential harm to competition.

— Former CDC Director predicts bird flu virus will cause next pandemic. ‘It’s not a question of if, it’s more a question of when we will have a bird flu pandemic,’ Dr. Robert Redfield said. Link for details.

— Michigan announces financial aid for HPAI-Impacted dairy farms to support research and recovery. The Michigan Department of Agriculture and Rural Development (MDARD) announced immediate financial assistance for dairy farms impacted by highly pathogenic avian influenza (HPAI) to support research and aid recovery. Up to 20 farms can receive up to $28,000 each. This funding complements existing USDA assistance for Michigan’s HPAI-affected dairy farms. Eligible farms must collaborate with MDARD and USDA’s Animal and Plant Health Inspection Service (APHIS) on epidemiological investigations, participate in real-time longitudinal studies with MDARD and Michigan State University, and engage in related programs from the Michigan Department of Health and Human Services (MDHHS).

MDARD Director Tim Boring emphasized the importance of this funding in supporting dairy farmers and advancing research. State Rep. Reggie Miller praised the proactive response and financial support for the farms, highlighting the importance of real-time research in combating HPAI.

Three USDA emergency management teams are assisting MDARD, with an additional USDA epidemiological team aiding in tracing and testing within dairy herds. Director Boring signed a “Determination of Extraordinary Emergency” order on May 1 to protect Michigan’s poultry and livestock industries, enhancing a federal order issued on April 24.

MDARD continues to work with herd veterinarians to monitor animal health and conduct trace investigations. They also provide personal protective equipment upon request and respond quickly to HPAI reports to mitigate disease spread and offer outreach. For more information or to sign up for HPAI alerts, visit www.michigan.gov/birdflu.

— KPMG survey: 41% of consumers said they plan to spend less on restaurants this year. Only 21% said they would spend more. The cost of takeout and dining out has risen 4% from one year ago, while grocery prices have risen just 1%.

— Yellen to announce new sanctions against fentanyl traffickers. U.S. Treasury Secretary Janet Yellen travels to Atlanta today, where she’s expected to announce new financial sanctions against individuals and organizations involved in fentanyl trafficking. Street fentanyl kills more than 70,000 Americans a year and generates billions of dollars annually in black market profits.

— Virginia Fifth District cliff-hanger. Two-term Rep. Bob Good (R-Va.) is trailing his Trump-backed challenger, state Sen. John McGuire (R), by just over 300 votes. Though McGuire has already declared victory, provisional ballots will be counted Friday, as well as mail-in votes that were postmarked by Tuesday. McGuire, unlike most Trump-aligned candidates in GOP primaries this year, did a bit better among mail-in voters than he did among Election Day voters. So, it’s possible McGuire’s lead could grow, there has not been an official call from the Associated Press.

The VA-5 race could end up going to a recount — the losing candidate can request one if the margin in the race is a percentage point or less, and election authorities will pay for the recount if the margin is half a percentage point or less (the candidate pays if the margin is higher than that and the outcome is not reversed). As of right now, McGuire is winning 50.25% to 49.75% for Good/

Larry Sabato says if McGuire’s edge holds, he would be on track to become the fifth Republican to represent this seat since 2016. “Given McGuire’s advantages, including Trump’s endorsement, Good remaining so competitive is yet another reminder that incumbents are hard to defeat in primaries. If McGuire does indeed triumph, Good would be just the second House incumbent to lose a primary so far this year.”

— Cole easily beats primary opponent. Rep. Tom Cole (R-Okla.) faced a free-spending businessman, Paul Bondar, who seemed to have very little connection to Oklahoma’s Fourth District. Cole and his allies took the primary seriously, and he dispatched Bondar 65%-26%.

— A recent Fox News poll (link) indicates that President Joe Biden has pulled ahead of former President Donald Trump for the first time since October in a hypothetical matchup. Biden holds 50% support compared to Trump’s 48%, a narrow lead that falls within the margin of error. Several events since the last survey in May might have influenced these small shifts in voter preference, including Trump’s hush money conviction, Hunter Biden’s gun trial conviction, a positive U.S. jobs report, and Biden’s new immigration executive order.

— President Joe Biden and former President Donald Trump are set to face off in a historic presidential debate on CNN on June 27. This event marks the first debate between a sitting president and a former president, potentially a pivotal moment in the 2024 race as millions of voters tune in. Both candidates met the constitutional, ballot qualification, and polling thresholds required by the network. Over the past weeks, their teams have been preparing to address a wide range of issues, including the economy, foreign affairs, and each other’s fitness for office.

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 |