U.S. Economy Added Only 12,000 Jobs in October; Unemployment Rate Stayed at 4.1%

Election predictions | RFK, Jr. ‘health czar’? | Oil prices surge | New strike at Port of Montreal | More human avian flu cases in workers from Washington state

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November 01, 2024 08:26 AM

News/Markets/Policy Updates: Nov. 1, 2024

— U.S. job growth slows sharply in October. The U.S. economy added only 12,000 jobs in October, compared to market expectations of 113,000 and September’s downwardly revised 223,000 (August’s additions were downgraded from 159,000 to 78,000 and September’s, from 254,000 to 223,000). It is the slowest pace of job creation since a decline in December 2020 as employment have been impacted by Hurricanes Helene and Milton, as well as strikes at Boeing and hotels in California and Hawaii (the Labor Department’s monthly report on strike activity, released last week, said that there were 33,000 Boeing workers on strike for the entire pay period that included Oct. 12). Hurricanes Helene and Milton likely reduced employment last month by about 70,000 in the Southeast, Oxford Economics estimated. Goldman Sachs expected a smaller impact of 40,000 to 50,000 jobs. The Bureau of Labor Statistics said that the two hurricanes that struck Florida and the Southeast U.S. had limited survey responses, but the agency said that “it is likely that payroll employment estimates in some industries were affected by the hurricanes; however, it is not possible to quantify the net effect on the over-the-month change in national employment, hours, or earnings estimates because the establishment survey is not designed to isolate effects from extreme weather events.”

Meanwhile, the jobless rate held steady at 4.1%, remaining unchanged from the three-month low in the prior month, and aligned with market expectations. The number of unemployed individuals was broadly unchanged at 7 million. Among those without employment, permanent job losers rose slightly to 1.8 million, while temporary layoffs were little changed at 846 thousand. The labor force participation rate eased by 0.1 percentage points to 62.6%.

Average hourly earnings also rose by 4% over the past year.

Of note: Federal Reserve policymakers have signaled that they expect to lower their benchmark interest-rate target range by a quarter-point when they conclude their two-day meeting on Thursday next week. Friday’s report is unlikely to dissuade them from that plan. CME Fed funds futures shifted to more than 99% probabilities for a 25 BP cut with just 0.4% thinking a 50 BP cut would happen.

Friday’s jobs report is the last major piece of economic data to land before Election Day.

— Election results may take days or weeks, officials warn. Election results for the Nov. 5 vote may not be immediately clear due to procedural factors such as counting mail ballots, audits, and potential legal challenges. While some states, like New York, begin counting ballots before Election Day, others, including Wisconsin and Pennsylvania, wait until Election Day, prolonging the process. In 2020, results were declared days after the election, and experts caution that delays and public confusion could reoccur this year. Final certified results in New York are expected by Nov. 30, with provisional ballots and recounts potentially extending the timeline further.

California has adopted an all-mail election system, which significantly impacts the counting timeline:
• Every registered voter receives a mail-in ballot automatically.
• Mail-in ballots require more time-consuming verification and processing steps compared to in-person voting.
• Voters can return mail-in ballots up to Election Day, creating a large volume of ballots to process after polls close.

Extended deadlines. California has implemented policies that extend the timeline for accepting and processing ballots:
• Ballots postmarked by Election Day are accepted up to 7 days after the election.
• This means the total number of ballots cast isn’t known until a week after Election Day.
• Voters have up to 4 weeks after the election to address any signature or other ballot issues.

Processing restrictions. Unlike some states, California has limitations on when ballot processing can begin:
• Election officials cannot start processing mail-in ballots until 29 days before Election Day.
• Results cannot be accessed or shared until after polls close on Election Day.

— Predictions from Inside Elections with Nathan L. Gonzales: The election watchers say, “While election night could provide some clues to the final outcome, an extended and even contentious period of vote counting, litigation and certification is possible.”
• Presidential: “While the race has improved slightly for Trump recently, the former president and Harris are still running virtually even in all seven of the toss-up states (Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin). Both sides are expressing cautious optimism but there’s no tangible difference in their chances of winning. It looks like a race between Democrats’ ground game and financial advantage, and Trump’s ability to turn out less frequent voters once again.”
• Senate: “Republicans remain favored to win control of the Senate and most likely to gain 2 to 4 seats. (They need to gain two for a majority if Harris wins; one if Trump wins.) But Republican candidates are within striking distance in Pennsylvania, Wisconsin, Michigan, and Nevada, and could push their total higher, while a Harris victory coupled with upsets in Texas and Nebraska could maintain narrow Democratic control.”
• House: “The fight for the House is as close and uncertain as the race for president. The final set of rating changes leaves Republicans favored in 213 seats and Democrats favored in 214, with 218 as the final goal. The eight toss-ups are divided evenly between the two parties and our new projection is a range of D+9 seats to R+1 seat. While that looks like a significant Democratic advantage, the party needs a net gain of 4 seats for a majority, which is in the middle of the range, so the battle for the House is effectively a toss-up.”

— Election predictions from The Cook Political Report with Amy Walter:
• “Despite the volatile nature of this presidential campaign, polling has been relatively steady, with neither candidate able to break through an electoral ceiling of support.” Electoral college: “Too close to call. Harris heads into Election Day with 226 electoral votes in Likely or Solid Democrat and Trump with 219 in Likely or Solid Republican. Seven states and their 93 electoral votes are too close to call.”
• The battle for the Senate fundamentally ends where the cycle began — with an overwhelmingly favorable map that very likely portends a GOP majority… A Republican gain of 2 to 5 seats, giving them a majority of between 51 and 54 seats.”
• “The race for control of the U.S. House remains as close as it’s ever been. The battleground is confined to a few dozen seats, with neither party having a clear advantage in a majority of seats… Ranges from Republican gain of 5 seats to a Democratic gain of 10 seats… At the moment, Republicans hold 221 seats to Democrats’ 214. In our final House race ratings, Democrats are favored in 205 seats, while Republicans are favored in 208, leaving 22 seats in the Toss Up column. If the Toss Ups split down the middle, Republicans would maintain their majority by an even narrower 219 to 216 seat margin.”

— CEOs weigh impact of Harris’ tax plans vs. Trump’s immigration and trade proposals, says Business Insider. CEOs are focused on how different policies from Vice President Kamala Harris and former President Donald Trump would impact their businesses, according to Business Insider. Joshua Bolten, CEO of the Business Roundtable, highlighted that taxes, regulation, immigration, and trade are major concerns for the 230 US company leaders his group represents.

Trump’s proposals include mass deportations intended to reduce housing costs and create more job opportunities. However, Democrats argue that this would harm businesses and have severe social impacts. Notably, immigrants make up a significant share of low-wage workers, with a conservative think tank citing that they hold a third of jobs paying under $30,000 annually. Trump’s broad-based tariff plan — 10% to 20% on imports — is viewed as potentially inflationary, as it could push producers to hike prices or cut supply. Bolten described Trump’s tariff strategy as “highly disruptive” to trade.

On the other hand, Harris’ focus on increasing the corporate tax rate from 21% to 28% is also concerning for business leaders. According to Bolten, while the aim isn’t merely to preserve lower taxes for shareholder gains, it’s essential to maintain U.S. competitiveness. He pointed out that before the 2017 tax reform, 27 major U.S. firms moved their headquarters abroad, but none have done so since the tax cuts. Bolten warned that even a moderated version of Harris’ tax policies could risk making the U.S. less attractive for business headquarters.

Bolten concluded by emphasizing that his members prefer staying in the U.S., supporting job creation, and contributing to the economy, but they must remain responsive to market forces to benefit their shareholders.

— Future president faces uncertain congressional control. The New York Times points out that for the past 30 years, each president has started their term with their party holding both the Senate and the House, facilitating significant legislative achievements such as Bill Clinton’s deficit reduction, George W. Bush and Donald Trump’s tax cuts, Barack Obama’s health insurance expansion, and Joe Biden’s climate law. This trend may change with the next president. The newspaper says Kamala Harris faces slim chances of a Democratic-controlled Senate if elected, while Donald Trump’s potential trifecta is not guaranteed, with the House control remaining highly uncertain, as noted by Maya Miller, who’s been covering the campaign for NYT.

Of note: In the House, incumbent House Republicans must defend 17 seats in districts that Biden won four years ago (such as a suburban district in Orange County, Calif., home to many Vietnamese Americans). Only five House Democrats are running in districts that Trump won.

— White House alters Biden transcript, sparking protocol breach controversy. The White House press office faced backlash for altering President Biden’s remarks about Donald Trump’s supporters, changing the transcript over objections from the administration’s stenographer’s office. Biden had told a Latino group that “the only garbage I see floating out there is his supporters,” referencing a comedian’s comment about Puerto Rico during a Trump rally. The press office added an apostrophe to “supporter’s,” implying Biden referred only to the comedian. This breach of protocol led to accusations of spoiling transcript integrity. House Republicans are now considering an investigation into the incident.

— Washington Post: RFK Jr. may lead public health agencies under Trump presidency. Robert F. Kennedy Jr., who suspended his third-party presidential campaign in August and endorsed Donald Trump, is now positioned for significant influence over U.S. public health agencies if Trump wins, according to the Washington Post (link). Kennedy, known for his skepticism of vaccines, has been campaigning for Trump and planning an agenda with potential staff lists, focusing on issues like chronic disease and vaccine safety. This prospect has raised concerns among health leaders and officials. “RFK is a disaster,” warned Ezekiel Emanuel, a former Obama health official, citing Kennedy’s controversial stances on public health. The Washington Post noted that a few hours after its story published, the former president told supporters that he would put Kennedy in charge of women’s health issues.

“The president has asked me to clean up corruption and conflicts at the agencies and to end the chronic disease epidemic,” Kennedy said in an interview Wednesday. “He wants measurable results in two years and to return those agencies to their long traditions of gold-standard evidence-based science and medicine.”

The Trump campaign did not comment on Kennedy’s potential responsibilities in a future administration, including whether he would hold any role overseeing vaccines and whether he would take a job that would need to be confirmed by the Senate. “The only thing President Trump and his campaign team are focused on is winning on Nov. 5,” Jason Miller, a campaign senior adviser, told the WaPo. “Everything after that is after that, and President Trump has made clear that Bobby Kennedy will play an important role.”

“I’m gonna let him go wild on health. I’m gonna let him go wild on the food. I’m gonna let him go wild on medicines,” Trump told supporters in New York City on Sunday.

Kennedy told his own supporters in a Zoom call Monday that Trump has promised him “control of the public health agencies,” singling out the Department of Health and Human Services and its subagencies, and also naming USDA.

— Canadian farmers prefer Harris over Trump for U.S. presidency. According to the Canadian Farmer Sentiment Index, 37% of Canadian farmers view Kamala Harris as a better U.S. presidential choice for Canadian agriculture compared to 18% favoring Donald Trump. Farmers cited Harris’ support for trade agreements, U.S./Canada relations, and her position on agricultural tariffs as key reasons. Trump was noted for strengths in economic policy and environmental energy stances. Nearly half of respondents were uncertain or neutral about which candidate would be more beneficial. With U.S. trade being vital to Canadian agriculture, many farmers expressed concern over potential Trump trade policies.

MARKET FOCUS

— Equities today: In Asia, Japan -2.6%. Hong Kong +0.9%. China -0.2%. India closed. In Europe, at midday, London +0.8%. Paris +0.7%. Frankfurt +0.6%. U.S. Dow opened up around 190 points.

U.S. equities yesterday: All three major indices registered losses in the wake of inflation data. The S&P 500 and the Nasdaq Composite marked their worst day in over a month. The Dow lost 378.08 points, 0.90%, at 41,763.46. The Nasdaq dropped 512.78 points, 2.76%, at 18,095.15. The S&P 500 fell 108.22 points, 1.86%, at 5,705.45.

— Oil prices surge amid reported Iranian attack plans on Israel via proxies. Oil prices spiked following reports that Iran may be preparing an attack on Israel from Iraqi territory using drones and ballistic missiles, according to Axios, citing unnamed Israeli sources. Brent crude rose by as much as 2.9% to nearly $75 a barrel, and West Texas Intermediate climbed above $71. This comes after Israel’s limited response to a prior missile barrage earlier in the month. Market analysts note rising premiums for bullish oil options as tensions build, although both Israel and Iran appear cautious of escalating into full-scale war. Key upcoming events include the U.S. election, a China legislative meeting, and an OPEC+ production decision.

— Oil giants brace for lower prices as profits dip and market pressure grows. Exxon Mobil and Chevron reported lower third-quarter profits due to falling oil prices and narrowing fuel-making margins, raising concerns about their resilience amid market shifts. Exxon posted $8.6 billion in profit, a 5% drop, while Chevron’s profits fell 31% to $4.5 billion. Both exceeded earnings expectations and expressed confidence in sustaining shareholder payouts, despite growing signs of an oil glut. Analysts warned U.S. producers may need to adjust buyback programs or risk using debt to maintain them. Challenges include increased global oil supply, weaker demand from China, and potential price drops if OPEC lifts production cuts.

— Striking Boeing workers, now in their seventh week of work stoppage, will vote on Monday on a new contract offer endorsed by the union. The proposal includes a 38% pay increase over four years and a larger signing bonus. The union has indicated this is the best deal they could secure from Boeing, which has been managing financial pressures due to the strike involving over 33,000 workers at its West Coast facilities.

— Ag markets today: Soybeans extended corrective gains from the two previous days during overnight trade while corn and wheat also firmed. As of 7:30 a.m. ET, corn futures were trading around a penny higher, soybeans were 6 to 7 cents higher, winter wheat markets were 3 to 5 cents higher and spring wheat was mostly a penny higher. The U.S. dollar index was around 140 points higher, and front-month crude oil futures were $1.30 higher.

Wholesale beef prices pulling back. Wholesale beef prices dropped $1.84 for Choice to $317.60 and $3.95 for Select to $285.37 on Thursday, extending the price pullback from recent highs. Despite the wholesale price pressure, the cash cattle market has performed relatively well, with generally steady prices in the Southern Plains and steady/weaker in the northern market, where supplies are more plentiful.

Another surge in cash hog index. The contra-seasonal rise in the cash hog index is gaining steam, jumping another $1.15 to $87.93 as of Oct. 30, the highest since Aug. 22. That’s the 10th straight daily gain during which the index has surged $4.07. After Thursday’s corrective losses, the discount in December hogs stood at $4.13, while February hogs ended $2.73 below today’s cash quote. The pork cutout also remains strong, rising $1.54 on Thursday to $103.15, the highest since Aug. 5.

— Agriculture markets yesterday:
• Corn: December corn fell 3/4 cent to $4.10 3/4, forging a near mid-range close.
• Soy complex: January soybean futures climbed 3 1/4 cents higher to $9.94 1/2 and settled near mid-range. December meal futures fell $2.10 to $299.50, marking the lowest close since Aug. 15. December bean oil futures surged 133 points higher to 45.14 cents; the highest close since July 12.
• Wheat: December SRW wheat fell 2 3/4 cents to $5.70 1/2 but forged a high-range close, while December HRW wheat fell 6 1/2 cents to $5.69 1/4. December spring wheat futures closed down 4 3/4 cents to $6.04 1/4.
• Cotton: December cotton futures fell 35 points to 69.57 cents, closing nearer session lows.
• Cattle: December cattle futures fell 12.5 cents to $186.30, while November feeders dropped 12.5 cents to $245.375. The October live cattle and feeder cattle contracts climbed $4.60 to $193.00 and $1.025 to $251.975, respectively, at their noon CDT expirations.
• Hogs: Futures posted a mixed performance Thursday, with nearby December futures falling 57.5 cents to $83.80.

Market perspectives:

— Outside markets: The U.S. dollar index was firmer ahead of the key U.S. Employment report with the euro only slightly weaker against the greenback. The yield on the 10-year U.S. Treasury note was higher ahead of the jobs update, trading around 4.30%, with a mostly higher tone in global government bond yields. Crude oil futures were moving higher with U.S. crude around $70.90 per barrel and Brent around $74.30 per barrel. Gold and silver futures were solidly higher ahead of the jobs report, with gold around $2,761 per troy ounce and silver around $32.89 per troy ounce.

— A new strike has begun at the Port of Montreal, affecting two key container terminals and causing significant disruptions to port operations. The strike began on Oct. 31 at 11:00 a.m., targeting two container terminals operated by Termont: Viau and Maisonneuve. This action involves approximately 320 out of 1,200 longshore workers at the port. The affected terminals handle about 40% of the port’s container traffic, though they represent only 15% of the port’s total volume.

The main issues behind the strike include:
• Work schedules: The union opposes certain scheduling practices implemented by Termont, which they claim negatively impact work-life balance.
• Wages: The union is seeking a 20% wage increase over four years, similar to agreements reached in Halifax and Vancouver.
• Contract expiration: Workers have been without a contract since Dec. 31, 2023.

The Port of Montreal has announced the indefinite closure of the Viau and Maisonneuve terminals. Ships are being forced to reroute to other ports, potentially causing economic disruptions.

The Maritime Employers Association (MEA) has denounced the strike and called for federal intervention. Port of Montreal CEO Julie Gascon warned of widespread economic impacts if the stoppage continues.

The union stated it was willing to call off the strike if an agreement could be reached on scheduling issues. Federal Labour Minister Steven MacKinnon previously proposed a special mediator for a 90-day negotiation period without lockouts or strikes, but this offer was rejected. The MEA has requested federal intervention to bring parties back to the negotiating table.

— USDA daily export sales:
• 132,000 MT soybeans to China, 2024-2025 marketing year
• 781,322 MT corn for to Mexico. Of the total, 715,800 MT is for delivery during the 2024-2025 marketing year and 65,532 MT is for delivery during the 2025-2026 marketing year
• 198,000 MT soybeans to unknown destinations, 2024-2025 marketing year
• 30,000 MT soybean oil to India, 2024-2025 marketing year

— Ag trade update: South Korea purchased 70,000 MT of corn expected to be sourced from South America or South Africa. Algeria purchased around 600,000 MT of optional origin milling wheat, with the bulk of the it expected to be sourced from the Black Sea region.

— NWS outlook: Threat of a heavy rain and severe weather event increasing across the central to southern Plains throughout the weekend... ...Mountain snow will overspread from the Pacific Northwest into much of the Intermountain West over the next couple of days with heavy rain today near the Pacific Northwest coast... ...Much above average temperatures expected across large portions of the central to eastern U.S. with little rain in sight along the East Coast.

Items in Pro Farmer’s First Thing Today include:

• Soybeans lead overnight price gains
• Record September soybean crush expected
• Signs of life in China’s property sector

RUSSIA/UKRAINE

— Ukraine’s October grain exports jump. Ukraine’s October grain exports rose 58.6% from last year to 3.95 MMT. That included 1.64 MMT of wheat, 1.92 MMT of corn and 376,000 MT of barley. In the first four months of 2024-25, Ukraine shipped 14.4 MMT of grain – including 7.7 MMT of wheat, 4.7 MMT of corn and 1.7 MMT of barley – up 5.2 MMT (56.5%) from the same period last year.

POLICY UPDATE

— USDA launches $20 million Southern Farmers Financial Association to boost capital access. USDA announced a $20 million investment to establish the Southern Farmers Financial Association (SFFA), a cooperative aimed at increasing capital access for small farming operations and agriculture-based businesses in high-poverty areas of the Southeast. Managed by Cornelius Blanding, with Shirley Sherrod as acting secretary and Calvin King as acting treasurer, the SFFA is supported by funding from the Inflation Reduction Act (Climate Act). The initiative seeks to partner with financial institutions and USDA programs to provide more inclusive, reliable capital for southern farmers and bolster rural economies.

CHINA UPDATE

— Another sign of Chinese factory growth in October. The Caixin/S&P Global manufacturing purchasing managers index (PMI) rose to 50.3 in October from 49.3 the previous month, signaling expansion among smaller and export-oriented factories. Output grew at the fastest pace in four months, driven by a renewed rise in new orders and increased buying levels. However, export orders continued to fall, albeit at a slower rate. The Caixin/S&P Global manufacturing PMI data came a day after the official reading also showed expansion in China’s larger state-owned factories.

TRADE POLICY

— Canada and Mexico brace for potential USMCA renegotiation amid U.S. election. Both Kamala Harris and Donald Trump plan to renegotiate the USMCA trade pact, raising concerns for Canada and Mexico, whose economies are deeply intertwined with the U.S., the Wall Street Journal reports (link). Trump has threatened new tariffs, causing anxiety over potential protectionist policies. Canada, which sends 80% of its exports to the U.S., is lobbying to preserve its $900 billion trade relationship, while Mexico eyes preserving its vehicle-manufacturing industry and addressing U.S. demands on Chinese imports. Windsor, Ontario, a city reliant on U.S. auto ties, faces economic uncertainty as the presidential election could shift trade dynamics.

ENERGY & CLIMATE CHANGE

— EPA supports Texas oil port license amid opposition over emissions. The Biden administration, through the EPA, has endorsed the proposed Texas Gulflink Deepwater Port, capable of exporting 1 million barrels of oil daily. While the EPA raised the importance of environmental justice, progressive lawmakers and activists have opposed the project, citing significant emissions concerns. In a letter from the EPA made public by opponents of the project Thursday, the agency said it “does not object to the issuance of a license” for Sentinel Midstream LLC’s Texas Gulflink Deepwater Port. The company, which is backed by private equity firm Cresta Fund Management, still needs final approval via a record of decision from the Transportation Department’s Maritime Administration. Final approval from the Maritime Administration is anticipated by Dec. 12.

— Republicans push California Governor Newsom to pause refinery storage mandate and proposed LCFS update amid job loss concerns. Assembly Republicans James Gallagher and Joe Patterson urged Governor Gavin Newsom to halt California’s refinery storage mandate and the proposed Low Carbon Fuel Standard update, warning of economic fallout and job losses. Their appeal followed Phillips 66’s decision to close its Wilmington refinery, impacting over 900 jobs and 8% of the state’s refining capacity. Newsom’s office defended the regulations as necessary for protecting consumers from price hikes and reducing pollution.

They added that the CEO of Valero also is considering closing one or both of its California refineries. “The looming decrease from nine to eight oil refineries in the state will result in significant impacts on the energy market and the state’s economy. Fuel prices will rise, unemployment will increase, and California will be forced to import energy from states and countries that do not share our environmental goals, undermining the policies you promote,” they wrote.

The debate comes in the wake of Newsom signing a new law aimed at preventing gasoline price spikes. This legislation:
• Allows the state to require oil refiners to maintain a minimum fuel inventory
• Authorizes the California Energy Commission to require refiners to plan for resupply during maintenance outages

The proposed update to California’s LCFS would have significant impacts on the oil industry:

1. Stricter carbon intensity targets: The update aims to tighten the carbon intensity reduction targets for transportation fuels. The current goal is a 20% reduction by 2030, but the proposal would increase this to a 30% reduction by 2030 and a 90% reduction by 20454. This more aggressive timeline would put increased pressure on oil companies to reduce the carbon intensity of their fuels or purchase more credits to comply.

2. Increased compliance costs: The stricter targets are likely to drive up the cost of LCFS credits, which oil companies must purchase if they cannot meet the carbon intensity requirements. This could substantially increase compliance costs for refineries and fuel suppliers.

3. Potential fuel price increases: Higher compliance costs may be passed on to consumers, potentially raising gasoline and diesel prices. Estimates of the price impact vary:
• The California Air Resources Board (CARB) initially projected potential increases of 47 cents per gallon for gasoline and 59 cents for diesel by 2025, though they have since distanced themselves from these figures.
• An independent analysis suggested price increases could reach 65 cents per gallon in the near term and up to 85 cents by 2030.

4. Market share pressure: The tightened standards are designed to accelerate the transition away from fossil fuels. This could lead to a gradual reduction in market share for traditional petroleum-based fuels as lower-carbon alternatives like biofuels, electricity, and hydrogen gain ground.

5. Investment decisions: Oil companies may need to reassess their investments in California refineries and fuel production facilities. Some companies have already warned about potential supply restrictions and the need to be cautious about new measures that could affect fuel availability in the state.

6. Incentives for low-carbon fuel production: While challenging for traditional oil operations, the updated LCFS could create opportunities for oil companies investing in low-carbon fuel technologies. The program has historically incentivized the production of biofuels and other alternatives.

7. Regulatory uncertainty: The oil industry has expressed concerns about the potential economic impacts of the proposed changes. This regulatory uncertainty could affect long-term planning and investment decisions for operations in California.

8. Shift in fuel mix: CARB anticipates a significant rise in electricity and hydrogen as zero-emission fuels, with a gradual decline in renewable diesel and a significant decrease in ethanol use through 2045. This projected shift could require oil companies to adapt their product portfolios and infrastructure.

In summary, the proposed LCFS update would likely increase regulatory pressure and compliance costs for the oil industry in California, potentially affecting fuel prices, market share, and long-term business strategies. While challenging for traditional operations, it may also create incentives for diversification into lower-carbon fuel alternatives.

LIVESTOCK, NUTRITION & FOOD INDUSTRY

— Oregon confirms three more human avian flu cases in workers from Washington state. Oregon and Washington health officials have confirmed three new human cases of highly pathogenic avian influenza (HPAI) in workers from Washington state who were exposed to infected poultry and traveled to Oregon. This brings the total confirmed human cases to 39 this year, including nine from Washington. Additionally, USDA’s APHIS reported four new HPAI outbreaks in commercial broiler operations in California, affecting Kings and Fresno counties, though bird counts have not been disclosed.

Meanwhile, the first round of mandatory milk testing in northern Utah identified bird flu infections in eight dairy herds, according to the Utah Department of Agriculture and Food on Thursday. Utah is the 15th state to report the avian flu virus in dairy cattle since the disease was first identified in herds in Texas in March.

— California dairy farmers face escalating avian flu outbreak. Dairy farmers in California are contending with a worsening avian flu outbreak that has impacted over 170 herds since late August, representing nearly half of all U.S. cases in dairy cows since March. As California leads the nation in milk production, the flu’s continued spread raises concerns about potential shortages, despite no current disruptions. The issue remains sensitive, with many farmers hesitant to discuss it publicly but acknowledging its significance, according to a Bloomberg article (link).

HEALTH UPDATE

— Infant formula makers not liable. A Missouri jury decided that the two leading manufacturers of infant formula, Abbott Laboratories and Mead Johnson, were not liable in a product defect lawsuit that sought more than $6 billion in damages. Link for details.

OTHER ITEMS OF NOTE

— Cotton AWP moves lower. The Adjusted World Price (AWP) for cotton is at 58.54 cents per pound, effective today (Nov. 1), down from 59.28 cents per pound the prior week and the third straight week below 60 cents. However, the current level still leaves the AWP more than six cents above the level that would trigger any farm program benefits. Meanwhile, USDA will establish Special Import Quota #3 Nov. 7 for the import of 34,508 bales of upland cotton, applying to supplies purchased no later than Feb. 4 and entered into the U.S. no later than May 5.

— West Texas pecan farm battles to preserve water amid city demands. Belding Farms in West Texas is embroiled in a dispute over water rights as neighboring landowners, like Fort Stockton Holdings, sell water to expanding cities such as Midland, Abilene, and San Angelo. The pecan farm, reliant on aquifers for over 60 years, faces potential water shortages due to a 50-year, $261 million contract that will export 28,400 acre-feet of water annually — more than double the farm’s usage. General Manager Zachary Swick emphasizes the need for proactive conservation to avoid catastrophic losses if water levels drop below pumpable thresholds. Link to details via the Texas Tribune.

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