U.S. CPI: Slight inflation Cooling Ahead of FOMC Updates

In May CPI, food prices showed mixed trend

Farm Journal
Farm Journal
(Farm Journal)

In May CPI, food prices showed mixed trend



Today’s Digital Newspaper

MARKET FOCUS

  • Annual inflation rate in the U.S. slowed to 3.3% in May 2024
  • In May CPI, food prices showed mixed trend
  • Market focus on ‘dot plot’ projections, Powell comments re: FOMC meeting
  • IEA projects global oil markets heading toward a major glut this decade
  • UK economy stalls in run-up to July election
  • Apple surged 7.3% on Tuesday to reach its first record high of the year
  • Americans’ short-term inflation expectations ticked lower in May
  • Shares in shipping and logistics providers came under heavy selling pressure Tuesday
  • Canadian gov’t and PSAC reach tentative agreement, averting CBSA strike
  • Ag markets today
  • Brazil’s tax change drives China to buy U.S. soybeans
  • USDA daily export sale: 106,000 MT soybeans to China, 2023-2024 marketing year
  • Ag trade update
  • NWS weather outlook
  • Pro Farmer First Thing Today items

CONGRESS

  • Republicans clear FY 2025 Ag/FDA appropriations bill out of subcommittee

ISRAEL/HAMAS CONFLICT

  • Hizballah launched over 100 rockets into northern Israel

RUSSIA & UKRAINE

  • U.S. will widen its sanctions on exports to Russia

POLICY

  • Boozman’s farm bill framework was released Tuesday
  • Next farm bill steps

CHINA

  • EU to slap more tariffs on electric vehicles shipped from China as of next month
  • China’s consumer prices rose mildly last month
  • China raises old-crop cotton import forecast

ENERGY & CLIMATE CHANGE

  • N.Y. legislators pass bill to charge fossil-fuel companies $3 billion annually for 25 years
  • WSJ: ElectronX raises $15 mil. for managing price volatility in wind and solar power

LIVESTOCK, NUTRITION & FOOD INDUSTRY

  • EU ordered over 40 million bird flu vaccines from CSL Ltd. to prevent the potential spread of the virus to humans.
  • Nathan’s Hot Dog Eating Competition: Chestnut can’t compete next month

HEALTH UPDATE

  • WHO confirms human case of bird flu in India

POLITICS & ELECTIONS

  • House GOP expands majority after Ohio Republican Michael Rulli wins special election
  • Rep. Nancy Mace won Tuesday’s South Carolina 1st Congressional District primary
  • Economist’s prediction model gives Donald Trump a two-in-three chance of winning

OTHER ITEMS OF NOTE

  • Republican AGs sue to block Biden rule enhancing H-2A farmworker protections

MARKET FOCUS

— Equities today: Asian and European stock indexes were mixed overnight. U.S. Dow opened around 350 points higher. The dip in U.S. inflation (see related item) takes the pressure off the Fed to keep interest rates elevated and stocks are rallying in response. In Asia, Japan -0.7%. Hong Kong -1.3%. China +0.3%. India +0.2%. In Europe, at midday, London +0.6%. Paris +0.4%. Frankfurt +0.5%.

U.S. equities yesterday: The Dow dropped 120.62 points, -0.31%, at 38,747.42. A good day for tech shares drove the Nasdaq up 151.02 points, 0.88%, at 17,343.55. The S&P 500 rose 14.53 points, 0.27%, at 5,375.32. Analysts currently expect companies in the S&P 500 to earn around $259 a share over the next 12 months, according to FactSet. That is up from a forecast of $243 a share at the start of the year.

Apple surged 7.3% on Tuesday to reach its first record high of the year a day after the iPhone maker revealed its new AI system.

— Oil prices were higher Tuesday as the EIA raised its global oil demand growth forecast. U.S. crude oil output in 2024 is expected to rise more than previously forecast to 13.24 million barrels, its highest ever, EIA said. WTI traded up $0.16 or .02% to close at $77.80. Brent traded up $.029 or 0.4% to close at $81.92.

— Ag markets today: Corn and soybeans modestly rebounded from Tuesday’s losses overnight, while wheat pulled back from its corrective gains yesterday. As of 7:30 a.m. ET, corn futures were trading 1 to 2 cents higher, soybeans were steady to 3 cents higher and wheat futures were mostly 8 to 11 cents lower. The U.S. dollar index was around 100 points lower, and front-month crude oil futures were nearly $1.00 higher.

Retailer demand for beef stays strong. Choice boxed beef prices firmed another 79 cents on Tuesday while Select dropped 42 cents. Movement improved to 144 loads, signaling there’s still strong retailer demand. Wholesale beef gains have strengthened packer margins, which are now solidly in the black.

Bellies fuel pork cutout gain. The pork cutout firmed $3.23 on Tuesday, fueled by a $16.08 jump in primal bellies. Loins and ribs also posted strong gains. Movement improved to 328.4 loads even amid the stronger prices. Meanwhile, the CME lean hog index is down 20 cents to $91.32 as of June 10, the fourth straight daily decline.

— Agriculture markets yesterday:

  • Corn: July corn futures fell 2 1/4 cents to $4.49 1/2 and near the session low.
  • Soy complex: July soybeans closed 10 1/4 cents lower at $11.78, while July soymeal fell $8.70 to $359.30. Both ended near session lows. July soyoil rose 1 point to 43.67 cents, notching a high-range close
  • Wheat: July SRW futures surged 19 cents to $6.26 1/2 and settled nearer session highs. July HRW futures firmed 11 1/4 cents to $6.55, closing nearer session highs. July HRS futures rose 3 1/2 cents to $6.78 3/4.
  • Cotton: July cotton rose 92 points to 72.73 cents, notching a near mid-range close.
  • Cattle: August live cattle futures sunk $1.05 to $178.925 and settled nearer session lows. August feeder cattle futures fell $1.00 to $257.65.
  • Hogs: July lean hogs closed down 62 1/2 cents at $92.275 and nearer the session low. June hogs go off the board Friday, and on Tuesday closed down 30 cents at $91.95.

— Of note:

  • Market focus on ‘dot plot’ projections, Powell comments. The Fed will keep interest rates unchanged following the conclusion of its two-day monetary policy meeting at 2:00 p.m. ET. Market focus will be on the so-called “dot plot” economic projections from Fed officials and Chair Jerome Powell’s press conference as traders try to determine when rate cuts will begin. May consumer price inflation data was released at 8:30 a.m. ET — see related item.
  • Americans’ short-term inflation expectations ticked lower in May, according to the Federal Reserve Bank of New York, while more households grew optimistic about their financial situations. Small businesses’ optimism also rose to its highest level of the year, according to a National Federation of Independent Business index.

— The annual inflation rate in the U.S. slowed to 3.3% in May 2024, down from 3.4% in April and below forecasts of 3.4%. The CPI remained unchanged from the previous month, missing expectations of a 0.1% rise, as lower gasoline prices were balanced by higher shelter costs. Core inflation also slowed to 3.4% annually, below the consensus of 3.5%, and the monthly core inflation rate fell to 0.2% from 0.3%, better than the forecasted 0.3%. Core inflation fell to the lowest level in three years last month.

Fed officials are set to release fresh economic projections at 2 p.m. ET, and they will be able to update those estimates with this CPI report.

— In the May Consumer Price Index (CPI) report, food prices showed a mixed trend. In May, the food index rose by 0.1% after being unchanged in April. The index for food at home remained unchanged, with mixed results among the six major grocery store food groups: two decreased, two were unchanged, and two saw price increases.

Dairy and related products decreased by 0.5%, mainly due to a 1.3% decline in milk prices. The nonalcoholic beverages index fell by 0.3%.

The indexes for other food at home and fruits and vegetables were unchanged.

The index for meats, poultry, fish, and eggs increased by 0.2%, following a 0.7% decrease in April. The cereals and bakery products index also rose by 0.2%.

The food away from home index increased by 0.4%, continuing a rise of 0.3% in the previous two months. Full-service meals saw a 0.4% increase, and limited service meals went up by 0.2%.

Over the last 12 months, the food at home index rose by 1.0%. The index for meats, poultry, fish, and eggs increased by 2.4%, and other food at home went up by 1.0%. The nonalcoholic beverages index rose by 1.3%, and fruits and vegetables increased by 0.6%. Cereals and bakery products rose by 0.7%, while the dairy and related products index fell by 1.0%.

The food away from home index rose by 4.0% over the past year. Limited-service meals increased by 4.5%, and full-service meals rose by 3.5%.

— The British economy stalled in April 2024 after a 0.4% rise in March, meeting expectations. This is the weakest performance in four months, with declines in industrial output and construction offsetting a rise in services. Production output fell by 0.9%, driven by a 1.4% drop in manufacturing, particularly in pharmaceuticals (-6.1%) and food, beverages, and tobacco (-2.3%). However, output rose in water supply and waste management (1.3%), mining and quarrying (0.8%), and electricity, gas, steam, and air conditioning supply (0.5%). Construction output decreased by 1.4%, marking its third consecutive monthly decline. Services output grew by 0.2%, the fourth consecutive monthly increase, led by growth in computer programming (3.2%), telecommunications (1.7%), publishing (4.9%), and professional, scientific, and technical activities (1.2%).

The figures are a blow to Rishi Sunak, the prime minister, as he tries to revive his election campaign. The Economist’s election forecast suggests the opposition Labor Party is extremely likely to beat the Conservatives.

Market perspectives:

— Outside markets: The U.S. dollar index was lower, with the euro, yen and British pound stronger against the greenback. The yield on the 10-year U.S. Treasury note fell, trading around 4.29%, with a negative tone in global government bond yields. Crude oil futures were higher, with U.S. crude around $78.80 per barrel and Brent around $82.80 per barrel. Gold and silver were higher, with gold trading around $2,330 per troy ounce and silver around $29.55 per troy ounce.

— Global oil markets are expected to face a significant surplus this decade, creating the largest buffer of spare output since the Covid-19 lockdowns, according to the International Energy Agency (IEA). As the world shifts away from fossil fuels, oil consumption is projected to stabilize at 105.6 million barrels per day by 2029, about 4% higher than last year’s level. However, production capacity is set to increase sharply, resulting in a surplus of 8 million barrels per day by the end of the decade.

— Shares in shipping and logistics providers came under heavy selling pressure Tuesday as investors digested news of a possible cease-fire between Israel and Hamas, which could see containerships return to the Red Sea and send freight rates lower.

— Canadian government and PSAC reach tentative agreement, averting CBSA strike. The Canadian government and the Public Service Alliance of Canada (PSAC), representing over 9,000 Canada Border Services Agency (CBSA) workers, reached a tentative agreement, averting a potential work stoppage. This agreement acknowledges the critical role of border services employees while balancing taxpayer interests, according to Anita Anand, president of Canada’s Treasury Board. The PSAC had warned of a strike starting at 12:01 a.m. on Friday if no agreement was reached. The tentative deal includes wage enhancements and other benefits for CBSA employees. Full details of the agreement will be disclosed on Thursday, followed by a ratification vote. If ratified, the agreement will cover about 11,000 employees, including customs and immigration officers, intelligence officers, investigators, and nonuniformed staff. This deal, if approved, would mean the government has reached agreements with 18 bargaining units, representing over 84% of the public service.

— Brazil’s tax change drives China to buy U.S. soybeans. A surprise tax change in Brazil, the world’s largest soybean exporter, has led Chinese buyers to purchase at least 208,000 tons of U.S. soybeans since the change was announced. This marks the first such transaction since January. The tax measure, which limits Brazil’s commodity exporters and processors from monetizing some tax credits, has faced significant opposition from companies and Congress, prompting Finance Minister Fernando Haddad to consider withdrawing it, Bloomberg reports (link). China’s shift to U.S. soybeans is due to Brazilian buyers’ inability to pass the higher costs to farmers, reducing Brazil’s offers. Major crop merchants, including Archer-Daniels-Midland Co., Bunge Global SA, Cargill Inc., and Louis Dreyfus Co., represented by the industry group Abiove, warned that the measure would cut profits for soybean processors, leading some traders to withdraw new offers for soybeans and corn. Additionally, the U.S. sold 152,000 tons of corn to unknown destinations, likely influenced by the same tax change.

— USDA daily export sale: 106,000 MT soybeans to China, 2023-2024 marketing year.

— Ag trade update: Egypt purchased 400,000 MT of wheat, including 180,000 MT Romanian, 120,000 MT Ukrainian and 100,000 MT Bulgarian. Japan purchased 1,500 MT of feed wheat from an unspecified source. Jordan tendered to buy up to 120,000 MT of optional origin milling wheat.

— NWS weather outlook: There is an Enhanced Risk of severe thunderstorms over parts of the Upper Mississippi Valley on Wednesday and a Slight Risk of severe thunderstorms over parts of the Great Lakes/Ohio Valley, Middle Mississippi Valley, and Central Plains on Thursday... ...There is a Slight Risk of excessive rainfall over parts of the southern tip of Florida through Friday morning... ...There are Excessive Heat Warnings and Advisories over northern/central California, Southwest, and western Texas on Wednesday

Items in Pro Farmer’s First Thing Today include:

• Corn and beans firmer, wheat lower overnight
• USDA reports out today
• France raises 2023-24 wheat export forecast

CONGRESS

— Republicans passed their fiscal year (FY) 2025 Ag/FDA appropriations bill out of the House Appropriations Ag Subcommittee via a voice vote Tuesday night, setting up another battle with Democrats this summer. Democrats vowed to oppose it on the House floor this summer. Georgia Rep. Sanford Bishop, the top Democrat on the subcommittee, blasted the bill and what he said were “unrealistic cuts” to USDA funding, along with the GOP trimming foreign food aid provided by the U.S. government.

The draft bill proposes $25.9 billion in discretionary funding for USDA, FDA, and other agencies, a cut of $355 million from FY 2024. Republicans say this is a 1.4% reduction, while Democrats argue it is 3.6%. House Agriculture Appropriations Chairman Andy Harris (R-Md.) defended the cuts, emphasizing the need for tough budget decisions.

The Food for Peace program would receive $1 billion, $619 million less than in FY 2024. Harris noted this reduction includes $1 billion transferred by USDA Secretary Tom Vilsack from the Commodity Credit Corporation and $300 million in carryover balances, urging Democrats to consider these factors before criticizing the cuts. However, Democrats, including Sanford Bishop, found the cuts “shocking” and argued they would disproportionately affect the disadvantaged.

The bill would allocate $123.2 billion in mandatory funding for SNAP, an increase of $777.6 million from FY 2024 due to inflation. However, it also introduces a healthy foods pilot program, allowing states to restrict unhealthy food purchases with SNAP benefits. Harris argued this pilot would promote healthier eating without reducing funding or household benefits. Democrats, including Bishop and House Appropriations Ranking Member Rosa DeLauro (D-Conn.), criticized the pilot for limiting food choices and potentially increasing costs.

USDA Secretary Tom Vilsack criticized the bill, accusing Republicans of rehashing old conflicts instead of making meaningful progress and using “funny money” for spending. He called for bipartisan proposals that address the needs of farmers, rural communities, and the broader population.

The funding bill includes measures to increase transparency in foreign agricultural land ownership, requiring the Agriculture secretary to notify the Treasury’s foreign investment committee when land is purchased by countries like China, Korea, Russia, and Iran, due to potential national security risks.

Additionally, the bill features a “Packers and Stockyards” rider aimed at blocking the USDA’s pro-competition regulatory agenda. It seeks to rescind final rules that protect contract poultry farmers and prohibit discrimination based on identity or association membership. The bill also aims to prevent the USDA from finalizing rules to strengthen the Packers and Stockyards Act, a 1921 law enforcing fair standards in agricultural markets.

ISRAEL/HAMAS CONFLICT

— Hizballah, an Iran-backed Lebanese militia, launched over 100 rockets into northern Israel in retaliation for an Israeli attack that killed four Hizballah officials, including a senior commander. Concurrently, Hamas called for a “complete halt” to fighting in Gaza after responding to an American-sponsored ceasefire plan with Israel. John Kirby, the White House national security spokesman, stated that the U.S. was “evaluating” the response. Earlier, Secretary of State Antony Blinken mentioned that Israeli Prime Minister Benjamin Netanyahu had “reaffirmed his commitment” to the plan.

RUSSIA/UKRAINE

— U.S. will widen its sanctions on exports to Russia, the White House said. The new “impactful” measures will reportedly target third-party sellers of semiconductors, among other things. The Biden administration says such companies in China and Hong Kong are providing Russia with chips that can be used on the battlefield in Ukraine. Exporters of machine tools are also in the White House’s sights.

POLICY UPDATE

— Boozman’s farm bill framework was released Tuesday. We filed a special report (link) on Sen. John Boozman’s (R-Ark.) proposals. Link to short summary. Link to key priorities. Link to titles.

Boozman said he unveiled the framework to address major challenges facing farmers, including a weaker export outlook, inflation, and high interest rates meant to slow rising prices — each contributing to major declines in net farm income over the past two years. He said the framework “meets that call by modernizing the farm safety net, facilitating the expansion of access to overseas markets, fostering breakthroughs in agricultural research and growing the rural communities our farmers, ranchers and foresters call home – all while making a historic investment in conservation and protecting nutrition programs that help Americans in need.”

The framework includes more generous farm safety net provisions than Senate Ag Chair Debbie Stabenow (D-Mich.) presented in her framework. Boozman proposes increasing reference prices by an average of 15% across all crops. By contrast, Stabenow has proposed a 5% increase, limited to cotton, rice and peanuts. Boozman did not detail specific reference prices by commodity.

The Senate GOP plan also proposes increasing the cap on the reference price escalator, which allows for a limited increase in reference prices if commodity prices rise. The current escalator provisions cap increases at 15%, but Boozman’s plan would increase the cap to 20%.

Better safety net impact. Republican committee staff said the reference price increases and other risk management improvements included in the framework should reduce the need for ad hoc action — such as trade and pandemic aid dispensed during the Trump and Biden administrations — as payments from existing programs would be more likely to be triggered if the market shifts.

No budget scores or text were provided by either Boozman or Stabenow. When asked for more details on the framework’s price tag, Boozman said only that “We’re using the Senator Stabenow approach,” referring to her own blueprint which also left questions about funding details unaddressed.

Next farm bill steps: No major movement on the House bill is expected until September. As for the Senate, Stabenow appears content to wait to see if House Republicans can deliver a bill to the floor. Boozman’s framework is important because (1) its provisions are close to the House GOP bill and (2) it shows the major items he would push if the GOP gets control of the Senate next year and the current farm bill is extended again.

CHINA UPDATE

— China’s annual inflation rate remained at 0.3% in May 2024, falling short of market forecasts of 0.4%. This marks the fourth consecutive month of consumer inflation, indicating a continued recovery in domestic demand. Non-food prices grew by 0.8%, with stable inflation in clothing (1.6%), housing (0.2%), and health (1.5%), and a slight change in education costs (1.7% vs 1.8%). Transport prices fell by 0.2% after a 0.1% increase in April, following utility and train ticket price hikes by local governments. Food prices declined for the 11th month, but the fall was the smallest since February (-2.0% vs -2.7%). Core consumer prices, excluding food and energy, rose by 0.6% year-on-year, compared to a 0.7% rise in April. Monthly, the CPI fell by 0.1%, the second decline this year, missing expectations of a flat reading, after a 0.1% rise in April.

— The European Union will impose additional tariffs of up to 38.1% on electric vehicles (EVs) imported from China starting next month, intensifying a global trade war. This decision follows an investigation into Chinese subsidies for EVs. Shares of Chinese EV makers like BYD and Geely have fallen in response. The tariffs will also impact Western automakers such as Tesla, which exports the Model 3 from Shanghai to Europe. China has signaled potential retaliatory measures, including tariffs on European agricultural, aviation, and automotive sectors. The final duty levels are expected to be adopted by November.

China has signaled it’s ready to retaliate, threatening measures across agriculture, aviation and cars with large engines.

Of note: Analysts do not expect Chinese carmakers to stall, noting many companies have made adjustments in anticipation of being targeted. Geely acquired the Swedish brand Volvo and is expanding manufacturing inside the EU and North America, which could help it to dodge penalties.

— China raises old-crop cotton import forecast. China’s ag ministry raised its forecast for 2023-24 cotton imports by 200,000 MT to 3 MMT amid higher-than-expected arrivals due to the longstanding price difference between domestic and imported cotton. The ag ministry expects cotton imports to decline to 2 MMT in 2024-25, unchanged from its previous forecast. The ministry made no changes to its corn or soybean import forecasts for either 2023-24 or 2024-25. For corn, it forecasts imports at 19.5 MMT in 2023-24 and 13 MMT in 2024-25. For soybeans, imports are expected to total 96.1 MMT in the current marketing year and 94.6 MMT in 2024-25.

ENERGY & CLIMATE CHANGE

— New York legislators passed the Climate Change Superfund Act, which will charge fossil-fuel companies $3 billion annually for 25 years to cover climate change costs. The bill now awaits Governor Kathy Hochul’s signature. If enacted, New York will become the second U.S. state to require fossil-fuel companies to contribute financially to climate change mitigation.

WSJ: ElectronX, a Chicago-based startup, raises $15 million to create a marketplace for managing price volatility in wind and solar power. ElectronX, a startup based in Chicago, aims to create a marketplace that helps companies manage the price volatility associated with intermittent wind and solar power, as well as extreme weather events like the recent Texas heat waves, the Wall Street Journal reports (link). The company has raised $15 million in seed funding, led by Eric Schmidt’s venture-capital firm, Innovation Endeavors. ElectronX, which has operated quietly until now, plans to announce this funding round soon.

The startup is applying for a license from the Commodity Futures Trading Commission to operate a futures exchange, positioning itself against established players like Intercontinental Exchange (ICE) and Germany’s Deutsche Börse’s Nodal Exchange. Electricity futures allow traders to bet on power price fluctuations, and utilities use them to hedge against volatility. ElectronX’s entry comes at a time when predicting energy costs is increasingly challenging due to the intermittent nature of renewable energy sources. In 2023, renewable sources supplied a record 23% of U.S. electricity demand.

CEO Sam Tegel highlighted that the transition to a cleaner energy grid has created significant stability issues. Extreme weather events, expected to become more frequent with climate change, further disrupt energy markets. For instance, a winter storm in Texas in 2021 left millions without power and cost companies over $10 billion. In May 2024, during a heat wave, electricity prices in Dallas surged dramatically due to power-plant outages.

ElectronX’s initial futures contracts will focus on Texas electricity prices, with plans to expand nationwide. Unlike its larger competitors, ElectronX will offer hourly price contracts, providing more precise hedging tools. Target customers include wind and solar power generators, large-scale battery operators, and data centers, which have growing energy demands due to artificial intelligence applications.

The startup aims to attract both smaller customers and institutional firms. Unlike traditional exchanges, ElectronX will offer direct market access without requiring brokers to hold collateral. While this simplifies customer onboarding, it means ElectronX won’t initially offer leveraged trading. The launch depends on obtaining regulatory approval, which could take several months.

Background. Founded in 2022 by Philip Krim and Evan Caron, with Tegel joining as CEO in 2023, ElectronX’s leadership includes veterans of high-speed trading and hedge funds. Innovation Endeavors, which invested $10 million in the funding round, focuses on early-stage investments and has a strong interest in climate tech. Eric Schmidt, a founding partner of Innovation Endeavors, was Google’s CEO from 2001 to 2011, during which time the company increased its use of renewable energy to power its data centers.

LIVESTOCK, NUTRITION & FOOD INDUSTRY

— The European Union ordered over 40 million bird flu vaccines from CSL Ltd. to prevent the potential spread of the virus to humans. This four-year contract comes in response to the rapid spread of avian influenza at U.S. dairy farms, where the virus has recently begun infecting dairy cattle after previously affecting millions of birds. There are concerns that the disease could spread further.

— The annual July 4th Nathan’s Hot Dog Eating Competition said Joey Chestnut can’t compete next month after he signed a deal to endorse Impossible Foods. The leading maker of meatless “meats” is known for its Impossible Burger which contains a laboratory-synthesized substance called “heme.” It recently launched a frankfurter impostor that’s “made from plants.”

HEALTH UPDATE

WHO confirms human case of bird flu in India. The World Health Organization (WHO) said a case of human infection of the H9N2 virus was detected in a four-year-old child in the eastern Indian state of West Bengal. The patient had exposure to poultry at home and in his surroundings. This is the second human infection of H9N2 bird flu in India, with the first in 2019, the agency said. The child experienced severe respiratory issues, high fever, and abdominal cramps. The child was admitted to the pediatric intensive care unit (ICU) in February and was discharged three months later after treatment. No other family members or contacts reported respiratory symptoms. The H9N2 virus is one of the most widespread avian influenza viruses in poultry, which can occasionally infect humans, typically resulting in mild illness.

POLITICS & ELECTIONS

— House Republicans will expand their majority after Ohio Republican Michael Rulli won a special election on Tuesday. With Rulli’s swearing-in, Republicans will lead the House 219-213. Rulli is also the Republican nominee for a full term in the Nov. 5 election. The next special election, in Colorado’s 4th District on June 25, also favors Republicans.

The Ohio race was triggered following former Rep. Bill Johnson’s (R) decision to resign in January, with the winner serving the remainder of his term. Johnson had represented the 6th district since 2011, winning re-election in 2022 by 35 points. Trump would have carried the district based on its current makeup by 29 points. But GOP state Sen. Michael Rulli only defeated the Democratic nominee, Michael Kripchak, by about 9 points, based on the latest vote count with more than 95%. That’s a roughly 20% overperformance for the Democratic candidate from what was expected for this district.

Reason for the Ohio race surprise: anemic turnout.

— Rep. Nancy Mace (R-S.C.) won Tuesday’s South Carolina 1st Congressional District primary election, the first contest of the year to feature one of the eight Republicans that voted to oust former House Speaker Kevin McCarthy (R-Calif.). Mace received 57.6% of the vote in the Palmetto State and will move on to the November general election, where she will be seeking a third term in Congress. She narrowly avoided a runoff election, which would have been triggered if she had received less than 50% of the vote.

— The Economist’s prediction model gives Donald Trump a two-in-three chance of winning the presidential election in November, while Joe Biden has a one-in-three chance. The model, which updates daily, uses state and national polls along with economic indicators to forecast the results. Most states have a clear party preference, but six states, accounting for 77 electoral votes, will be crucial in determining the outcome.

OTHER ITEMS OF NOTE

— Republican AGs sue to block Biden rule enhancing H-2A farmworker protections. Republican attorneys general from Kansas and 16 other states have filed a lawsuit to block a Biden administration rule enhancing protections for foreign farmworkers on H-2A visas. Set to take effect on June 28, the rule aims to improve organizing rights for these workers, who are exempt from the National Labor Relations Act. It includes restrictions on employer-led anti-union meetings, clarifies protections for “just cause” disciplinary actions, and allows workers to invite outside organizations to employer-provided housing. The lawsuit, filed in the U.S. District Court for the Southern District of Georgia, argues that the rule exceeds the Department of Labor’s authority, is arbitrary and capricious, and violates the major questions doctrine. The case is Kansas v. DOL, S.D. Ga., No. 2:24-cv-00076e.


KEY LINKS


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 |