U.S. Inflation Rate Slows to 6.5%, Lowest Since Oct. 2021

White House: President Biden does not support a ban on gas stoves

Farm Journal
Farm Journal
(Farm Journal)

White House: President Biden does not support a ban on gas stoves


In Today’s Digital Newspaper

An abbreviated report today as I am in Mahnomen, Minnesota, to speak at the ProAg Producers’ meeting. Pam and Dave Vipond were gracious to pick me up in Fargo after an extended journey via yesterday’s airline woes. On my flight from DC to Denver, there was a medical emergency. A flight attendant asked if there was a doctor on the plane. There were three. Thankfully the situation ended okay. But, alas, I missed my initial connection from Denver to Fargo. Let’s just say it was a long day. A Federal Aviation Administration system failure delayed more than 10,000 flights. The FAA said the failure was the result of a “damaged database file” that officials addressed by rebooting the system. Lawmakers on both sides of the aisle said they planned to investigate the matter, as did the FAA. The Biden administration said there was no evidence of a cyber attack, but of note, additional investigations about this possibility continue. It follows a meltdown at Southwest Airlines last month, raising more questions about whether enough is being done to upgrade air travel infrastructure.


The annual inflation rate in the U.S. cooled for a sixth straight month to 6.5% in December, the lowest since October of 2021, and matching market expectations. Month over month, the CPI declined by 0.1%, beating forecasts of a flat reading as a decrease in gasoline prices more than offset a rise in the cost of shelter. It was the first decline since May of 2020. Gasoline costs dropped 9.4%, more than offsetting a 0.8% increase in shelter prices. Food prices were up 0.3%, below 0.5% in the previous month. Other increases were also seen for household furnishings and operations (0.3%), motor vehicle insurance (0.6%), recreation (0.2%), and apparel (0.5%). In contrast, the indexes for used cars and trucks (-2.5%), and airline fares (-3.1%) were among those that decreased over the month.

The yield on the U.S. 10-year Treasury note, seen as a proxy for global borrowing costs, held the decline from early January and hovered at a one-month low of 3.5% as investors digested the latest domestic price data for hints on the Federal Reserve’s incoming interest rate decisions.

U.S. initial unemployment claims at 3-Month Low. The number of Americans filing new claims for unemployment benefits fell by 1,000 to 205,000 on the week ending January 7, well below expectations of 215,000. It was the lowest value in over three months, adding to recent evidence of a tight labor market despite the Federal Reserve’s aggressive tightening path last year. The 4-week moving average fell by 1,750 to 212,500. On a non-seasonally adjusted basis, initial claims rose by 60,799 to 339,286.

Grain and soybean futures firmed overnight amid followthrough buying as traders awaited USDA’s January crop reports later this morning. As of 7:30 a.m. ET, corn futures were trading 1 to 3 cents higher, soybeans were mostly 6 to 9 cents higher and wheat futures were 1 to 4 cents higher. Front-month crude oil futures were around $1 higher, and the U.S. dollar index was about 175 points lower.

Barrage of USDA report data today. USDA will release its Annual Production Summary, Supply & Demand Report, Winter Wheat Seedings and Quarterly Grain Stocks Report at noon ET. Pro Farmer editor Brian Grete says with that much data, there are likely to be some surprises, and the markets have a history of big price moves following the barrage of January data. Quarterly grain stocks have been particularly difficult for analysts to peg, especially for corn, and the range of pre-report estimates for Dec. 1 corn stocks is historically wide.

Several sales of U.S. ag commodities to China in most recent week. Data for the week ended Jan. 5 showed fresh sales of U.S. ag commodities to China for 2022-23, including net sales of 66,000 tonnes of wheat, 138,587 tonnes of corn, 676,646 tonnes of soybeans, and 16,438 running bales of upland cotton. For 2023, net sales of 3,380 tonnes of beef and 290 tonnes of pork were reported. Total exports of pork for 2022 were put at 212,493 tonnes while beef exports totaled 155,050 tonnes.

Conab trims soybean, corn crop forecasts. Conab lowered its official Brazilian soybean and corn production estimates from last month, citing “poor distribution of rainfall” mainly in Rio Grande do Sul, though it continues to forecast record production for both crops. Conab forecasts Brazilian soybean production at 152.7 MMT, down 765,000 MT from last month. It also cut the 2022-23 corn production forecast by 765,000 MT to 125.1 MMT. Conab cut its 2022-23 soybean export forecast to 93.9 MMT, though that would still be up 15 MMT (19%) from the previous year. Conab left its 2022-23 corn export forecast at 45 MMT, which would be up 3.4% from the previous year.

The White House said President Biden does not support a ban on gas stoves after a federal consumer safety official suggested that such a proposal was on the table. The federal government isn’t going to take away your gas stove, a top consumer regulator told CNN on Wednesday. Richard Trumka Jr, a Consumer Product Safety Commissioner, (CPSC) set off a firestorm this week by suggesting the agency could ban gas stoves because they have been linked to childhood asthma. Trumka said “everything’s on the table” when it comes to gas stoves, but stressed that any ban would apply only to new gas stoves, not existing ones.

CSPC Chair Alexander Hoehn-Saric said no such plans were in the works. “To be clear, I am not looking to ban gas stoves and the CSPC has no proceeding to do so,” he said. However, he said the CSPC would look into research on gas stoves indicating their emissions can be hazardous and he indicated they will look at ways to strengthen voluntary standards.

White House Press Secretary Karine Jean-Pierre also said the administration was not banning gas stoves. “The president does not support banning gas stoves and the Consumer Product Safety Commission, which is independent, is not banning as stoves,” she said.

Hot as an oven. Trumka’s comments prompted scores of lawmakers to issue statements condemning the situation, with Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) saying in a statement “the last thing that would ever leave my house is the gas stove that we cook on.”

“Is that all there is?” That seems to be a typical comment farmers make when doing some initial calculations on USDA’s not-so-well received announcement of Phase 2 of the Emergency Relief Program (ERP).

USDA is making additional CFAP 2 payments to underserved farmers and ranchers. USDA has begun issuing additional payments under the Coronavirus Food Assistance Program 2 (CFAP 2) effort to underserved farmers and ranchers using Commodity Credit Corporation (CCC) funds except for those to tobacco farmers where payments will be funded by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The additional payments will be equal to 15% of the producer’s previous CFAP 2 payments. The payments were to be processed and made available to county FSA offices to certify around Jan. 11. USDA said the payments would be issued within 30 days.

Contract growers are not eligible for these additional payments.

The payments were part of a final rule on CFAP and other aid efforts released Jan. 11 and are expected to total $325 million.

U.S. and India conclude discussions on trade. U.S. Trade Representative Katherine Tai and Indian Minister of Commerce and Industry Piyush Goyal met Wednesday under the U.S./India Trade Policy Forum in Washington, with a post-meeting release on Tai’s remarks revealing few details. But a joint statement indicated the two sides discussed work that still needed to be done on access for certain agricultural “products of interest to both sides,” and that dialogue on food and agricultural issues would increase in 2023. “The United States and India also exchanged views on potential targeted tariff reductions,” the statement said, but it is not clear what those potential tariff reductions may be. The U.S. has opted not to pursue a free trade agreement (FTA) with India and the Indo-Pacific Economic Framework (IPEF) deal does not cover tariff reductions relative to increasing access for U.S. goods.

Professional sports come to Iowa via farmland purchases. The ag sector is buzzing over athletes’ purchase of north Iowa farmland. Patricof Co., a private investment platform that said it leverages the “unique relevance of world-class professional athletes to source the most attractive alternative investment opportunities and drive superior returns,” has purchased 104 acres of farmland in northern Iowa. Local media reported the purchase is part of a $5 million investment in farmland by the fund which includes more than two dozen professional athletes. The land will be leased to farmers for profit and the group may purchase additional Iowa farmland in the future, according to Des Moines TV station KCCI.

China inflation rises as Covid-19 restrictions fall. Inflation in China picked up in December and is expected to accelerate further in the months ahead as the economy revs up following Beijing’s abrupt dismantling of its zero-tolerance measures to contain Covid-19. Consumer prices rose 1.8% in December versus a year earlier, faster than the 1.6% annual rate recorded in November, China’s national statistics bureau said Thursday.

China says its imports, exports hit new highs in 2022. China’s imports and exports are estimated to have reached new highs in 2022, a Commerce Ministry spokesperson said. China is scheduled to release preliminary December trade data at 10:00 p.m. ET. The spokesperson said increasing risk of a global economic recession and continuing slowdown in external demand are the greatest pressures affecting the steady growth of foreign trade.

More angst was evident regarding EPA’s RFS plan on renewable diesel during the second day of public hearings. EPA heard complaints about its proposed levels under the Renewable Fuel Standard (RFS) for 2023, 2024, and 2025 relative to renewable diesel and sustainable aviation fuel (SAF). Critics told EPA in the public session that the agency has underestimated the existing or expected industry capacity. “There is over $4.75 billion invested in oilseed processing expansions and new construction,” Paul Winters of Clean Fuels Alliance America told EPA. “Some of that could be delayed or possibly canceled in response to the proposal.” The EPA proposal, Kent Engelbrecht of ADM said, “underestimates our ability to produce both feedstocks and finished renewable fuels.” The EPA plan implies modest growth in the sector, with EPA stating in its proposal that it had doubts that announced expansion in the sector will actually be built due to costs of sourcing feedstocks, primarily seen as vegetable oils like soyoil and canola oil.

The Biden administration again renewed the Covid-19 public health emergency, a provision that gives the administration the authority to respond to the pandemic as cases are again on the rise. It provides wide-ranging authority over several Covid-19-related areas, including data tracking and allowing pharmacists, rather than physicians, to administer the Covid-19 vaccine. The renewal comes amid the emergence of the Omicron XBB.1.5 subvariant and a spike in new cases.

President Joe Biden’s legal team found another batch of classified gov’t records following the initial discovery of classified documents at his former think tank office in Washington this past fall. The initial batch of documents discovered contained 10 classified documents, including U.S. intelligence materials and briefing memos about Ukraine, Iran and the U.K. Some of the classified documents were “top secret,” the highest level. It is unclear how many documents were in the second batch or what the documents were about. Classified records are supposed to be stored in secure locations. The situation has triggered criticism by Republicans, who argue that the federal government has set a political double standard in its approach to mishandled documents.

Subway is exploring a potential sale that could value the sandwich chain at more than $10 billion, the Wall Street Journal reported. The process is in its early stages and Subway, which has 37,000 locations in more than 100 countries and has long been a potential acquisition target, could still decide against any transaction. Subway had an estimated $9.4 billion in sales in 2021, but revenue has declined in recent years amid growing competition.

400,000: The number of individual paper tax returns awaiting processing by the Internal Revenue Service as of Dec. 23, according to a new report. Overall backlogs are still high, but down markedly from 4.7 million unprocessed individual returns at the end of 2021.

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 | Student loan forgiveness | Russia/Ukraine war, lessons learned | Election predictions: Split-ticket | Congress to-do list | SCOTUS on WOTUS | SCOTUS on Prop 12 | New farm bill primer | China outlook | Omnibus spending package |