News/Markets/Policy Updates: Oct. 11, 2024
— Florida avoids worst-case scenario, but Hurricane Milton leaves significant damage. Florida Governor Ron DeSantis announced that the state had avoided the “worst-case scenario” as Hurricane Milton moved into the Atlantic. However, the storm caused extensive damage after hitting Florida’s west coast, triggering numerous tornadoes, leaving over 3 million homes and businesses without power, and resulting in at least ten fatalities. Of note: The catastrophic storm surge, once projected as high as 15 feet, never materialized. A last-minute wobble pushed Hurricane Milton toward the Sarasota area, south of Tampa. More than 2.5 million customers were still without power early today — down from 3.2 million on Thursday afternoon, according to PowerOutage.us. The full scope of Milton’s destruction won’t be known for days or perhaps weeks. Losses may reach $60 billion to $75 billion, said Chuck Watson, a disaster modeler with Enki Research. AccuWeather put the cost much higher at $160 billion to $180 billion. Coupled with Hurricane Helene, total insured losses in Florida this year have topped $100 billion. — Florida ports remain closed as Hurricane Milton impacts agriculture and exports. At least seven Florida ports, including St. Petersburg and Jacksonville, remain closed due to Hurricane Milton. Port Tampa Bay, a key hub for fertilizer exports, has reopened with restrictions despite power outages. Fertilizer producer Mosaic Co., which had idled its Florida operations ahead of Milton’s arrival, said in a statement (link) on Thursday that it was working to confirm the safety of its employees and will “begin assessing the impact on our operations” when conditions allow. In agriculture, citrus growers report significant losses, with early crops heavily affected and ongoing fruit drops expected in the coming weeks. Beyond citrus and fertilizer, Hurricane Milton has affected various other agricultural sectors: — Biden urges Congress to pass emergency relief after Hurricane Milton devastation. President Joe Biden called on Congress to reconvene and pass emergency relief after Hurricane Milton caused extensive damage along Florida’s Gulf Coast. He warned that rebuilding efforts will require several billion dollars and suggested Congress will need to replenish FEMA’s disaster relief funds in the coming months. Homeland Security Secretary Alejandro Mayorkas echoed the call for additional funding, urging Congress to act once it returns from recess. — China set to unveil over $250 billion in economic stimulus, focus on private sector and technology. Details are anticipated in a Saturday briefing, according to a Bloomberg survey. On Monday, officials will also outline new support for private companies, alongside a draft law promoting the private sector. However, the law’s emphasis on adherence to “the socialist system with Chinese characteristics” highlights the unique nature of private business in China. Experts suggest the stimulus will prioritize technology and self-sufficiency, a strategy aligned with national goals but less favorable to financial investors. See more in China section. — WSJ poll shows tight race between Trump and Harris in battleground states as election nears. A recent Wall Street Journal poll reveals a highly competitive race between Donald Trump and Kamala Harris across seven key battleground states. Voters see Trump as stronger on issues like the economy and border security, but Harris holds slight leads in Arizona, Michigan, Wisconsin, and Georgia, while Trump edges out in Nevada, North Carolina, and Pennsylvania. With neither candidate holding a decisive lead and independent voters evenly split, the race remains too close to call. Both candidates retain strong support from their respective parties, and the outcome may hinge on undecided voters. — Inside Elections: Tight race for White House, Senate, and House as election nears. With less than a month to go, the 2024 election is highly competitive across the presidential, Senate, and House races, says Inside Elections with Nathan L. Gonzales. • Presidential race: Former President Donald Trump and Vice President Kamala Harris are neck-and-neck in key swing states like Arizona, Georgia, and Pennsylvania. “Harris has the advantage in fundraising and organization, and has a higher ceiling because she’s less defined. But she still has to seal the deal with voters who aren’t excited about four more years of Trump but don’t yet trust her to be president.” • Senate: Republicans have a slight advantage in the Senate, needing a net gain of one seat to take control, while Democrats are struggling to hold onto their majority. “Wins in West Virginia and Montana are enough for an outright GOP majority. Democrats have a narrow path to keeping control, but the most likely outcome is a GOP gain of 2-4 seats.” • In the House, the race is similarly close, with both parties vying for the majority, and the outcome may not be known for weeks after Election Day. A small shift in voter sentiment could significantly impact the results. “The GOP still has a narrow edge overall. Republicans likely need to win four of 13 Toss-ups, while Democrats need to win 10 of 13. The fight for the House seems to mirror the close presidential race, and the majority may not be known for weeks after Election Day. We’re adjusting our projected seat range from D+5 seats to R+5 to D+7 to R+6. Democrats need to gain four seats for a majority.” — Trump visited the battleground state of Michigan on Thursday, where he spoke at the Detroit Economic Club and compared the city to a “developing nation.” Trump proposed making interest on car loans tax-deductible. Harris outlined her plans for immigration reform at a Univision town hall in Nevada as she tried to appeal to Latino voters. — Pennsylvania’s 2024 election results could be contested for weeks in court, and both sides say they’re ready for that fight. Link to details via the Philadelphia Inquirer. — Capital gains tax policy faces uncertainty ahead of 2025 expiration of tax cuts. With the 2017 Tax Cuts and Jobs Act provisions set to expire after 2025, long-term capital gains tax rates are a key focus in upcoming political debates. Currently, long-term gains are taxed at 0%, 15%, or 20%, based on income thresholds. Kamala Harris has proposed raising the top capital gains rate to 28% for incomes over $1 million and supports taxing unrealized gains at death. Donald Trump aims to make the 2017 tax cuts permanent and possibly lower the top capital gains rate to 15%, with potential indexing for inflation. — Charlie Cook’s analysis of the current political landscape highlights the intense uncertainty and division in American politics. He emphasizes the challenges faced by both campaigns and voters in a highly polarized environment. The current political climate is marked by unprecedented uncertainty, with several swing states showing extremely close polling results. Cook aptly describes this situation: “It would be hard to have more political uncertainty than we do right now, with seven swing states effectively dead even in polling. Given how narrowly and bitterly divided our country currently is, however, we shouldn’t be too surprised.” He cautions against overconfidence in polling, noting that “Anyone reasonably sure they know the outcome has a lot more confidence in polling than I — or most pollsters I know — do.” The undecided voter dilemma. Cook offers insights into the nature of undecided voters, challenging common assumptions about their motivations. He suggests: “There are fewer real undecided voters than many believe, and second, those undecideds are generally what pollsters call ‘pure independents,’ with no instinctive lean toward either party.” These voters, according to Cook, are “terribly cross-pressured,” feeling conflicted between their dislike of Trump’s style and their dissatisfaction with the Biden-Harris administration’s policies. The challenge for campaigns lies in motivating voters who are torn between supporting a candidate or not voting at all. Cook references Ronald Brownstein’s analysis, noting: “Suggesting a different path than Biden risks alienating party constituencies who have yet to make waves since Harris became the nominee.” This highlights the delicate balance Harris must strike between appealing to moderates and maintaining support from the Democratic base. Lessons for future campaigns. Cook concludes with a reflection on the importance of political positioning, stating: “It is ill-advised for presidential candidates to answer questions too freely and candidly, but if I could wire Harris up to a polygraph machine and give her a dose of sodium pentothal, the questions I would want to ask would include: Why did Biden’s Gallup job-approval numbers drop 14 points between June and October of 2021? Which policies may have triggered such a backlash?” — Harris targets Trump’s rural base as fight for farming communities intensifies. Kamala Harris is intensifying efforts to win over rural voters, traditionally a Republican stronghold, in key swing states like Wisconsin and Pennsylvania (see next item for more). Her campaign has launched a series of ads featuring farmers pledging support for her and is emphasizing rural healthcare and federal investments. Partnering with Minnesota Governor Tim Walz, Harris is making a push in regions where Trump’s support remains strong. While Trump’s trade policies have earned him loyalty in rural areas, Harris aims to capitalize on discontent with farm costs and Trump’s handling of China. The race in these battleground states remains tight. Link to more via Bloomberg. — Farmers and economists divided on presidential candidates’ impact on agriculture. As the Nov. 5 election approaches, a recent Farm Journal/AgWeb poll of 4,776 respondents (link) reveals diverging opinions between farmers and economists on whether Harris or Trump would be better for agriculture, particularly regarding trade policies. Farmer perspectives. The poll indicates strong support for Trump among farmers, though the agricultural community is not monolithic in its voting intentions. Farmers who support Trump generally believe he: Farmers supporting Harris tend to: Economists’ views. The September Ag Economists Monthly Monitor, surveying nearly 70 agricultural economists, shows a more mixed outlook on the candidates’ potential impact on trade: Michael Langemeier, an agricultural economist from Purdue University, notes that farmers are currently the most pessimistic they’ve been in about five years regarding trade prospects. Tariff policies and impact. Both the Trump and Biden/Harris administrations have employed tariffs as a trade policy tool. Trump has proposed a 10% tariff on all imported goods and a 60% tariff on goods from China, while Harris argues that tariffs are essentially a “sales tax” on American households. The Ag Economists Monthly Monitor reveals mixed opinions on the effectiveness of tariffs: Bottom line: As the election nears, the agricultural sector remains divided on which candidate would best serve their interests, particularly in the realm of trade policy and tariffs. |
MARKET FOCUS |
— Equities today: Asian and European stock indexes were mixed overnight. U.S. Dow opened around 80 points higher. In Asia, Japan +0.6%. Hong Kong closed. China -2.6%. India -0.3%. In Europe, at midday, London -0.2%. Paris +0.1%. Frankfurt +0.1%.
China’s stock markets slumped overnight. The Shanghai Composite lost 6.6%; the CSI 300 fell over 7%. Hong Kong’s Hang Seng also closed lower by 1.7%. China’s National Development and Reform Commission earlier this week sorely disappointed the marketplace with a tepid statement on economic stimulus. Traders and investors await another update on Saturday, when China is expected to announce $283 billion of new stimulus measures, according to a Bloomberg survey. The majority of the funding expected to come from government bonds (see related items below).
U.S. equities yesterday: The Dow closed down 57.88 points, 0.14%, at 42,454.12. The Nasdaq fell 9.57 points, 0.05%, at 18,282.05. The S&P 500 declined 11.99 points, 0.21%, at 5,780.05.
— JPMorgan Chase exceeds earnings expectations, reports strong revenue growth. JPMorgan Chase kicked off the bank earnings season by surpassing Wall Street expectations, reporting earnings of $4.37 per share, above the $4.01 anticipated by analysts. The bank’s revenue also beat predictions, reaching $43.32 billion compared to the expected $41.63 billion. Despite a 2% decline in profit to $12.9 billion, revenue grew by 6%, driven by solid growth in the rising rate environment since the Federal Reserve began increasing rates in 2022.
— S&P 500 profit growth expected, but financial sector faces earnings decline. Analysts predict mixed earnings for S&P 500 companies, with overall profit expected to grow by 4.2% for the fifth consecutive quarter, according to FactSet. However, the financial sector may see a 0.4% drop in earnings per share, driven by lower interest income from Federal Reserve rate cuts and higher loan-loss provisions, according to RBC Capital Markets analyst Gerard Cassidy. Despite these challenges, a surge in investment banking revenue could provide a potential boost for the sector.
— Elon Musk introduced the “cybercab,” a fully automated robotaxi with no steering wheel or pedals, during a Tesla event, proclaiming that the “autonomous future is here.” Production is expected to start in 2026. The Cybercab — a coupe with a futuristic silver body and butterfly doors — will eventually cost below $30,000: “We’ll make this vehicle in very high volume.” Musk believes this groundbreaking technology could significantly boost Tesla’s valuation, potentially rising from $763 billion to $5 trillion.
In a surprise, the company also revealed a “robovan” — a self-driving van capable of carrying up to 20 passengers or being configured for cargo purposes.
Tesla shares fell more than 5% in premarket trading Friday after investors were underwhelmed by the event.
— BP issued its third profit warning in 2024, citing weak refining margins, lower fuel sales, and higher exploration write-offs. Refining margins dropped to $16.5 per barrel in Q3, down from $20.6 in Q2, leading to a potential $600 million earnings hit. Additional losses of up to $300 million from weaker fuel sales and $300 million from exploration write-offs were also reported. CEO Murray Auchincloss faces investor challenges as BP’s share price has fallen over 12% this year, lagging peers, and analysts expect further earnings reductions. Concerns mount over BP’s ability to sustain shareholder returns amid fluctuating oil prices.
— Ag markets today: Corn, soybeans and the winter wheat market mildly favored the upside in quiet overnight trade ahead of USDA’s October crop reports at noon ET. As of 7:30 a.m. ET, corn futures were trading around a penny higher, soybeans were mostly a nickel higher, winter wheat markets were 2 cents higher and spring wheat was fractionally to a penny lower. The U.S. dollar index was holding near unchanged, and front-month crude oil futures were about 50 cents lower.
Cash cattle trade steady/higher. Cash cattle trade got underway with $1.00 higher prices than week-ago in the Southern Plains, while the northern dressed market reported generally steady prices. Given the general strength of initial cash trade, some feedlots continue to hold out for even higher bids.
Pork margins solidly in the black. Pork packers are making money with margins solidly in the black, so it’s highly unlikely they’re intentionally slowing operations. And December futures certainly aren’t encouraging producers to hold back hogs. The implication of surprisingly tighter-than-expected supplies due to recent slaughter figures could translate into near-term support for cash prices.
— Agriculture markets yesterday:
• Corn: December corn fell 2 1/2 cents to $4.18 1/2 and marked the lowest close since Sept. 27.
• Soy complex: November soybean futures sank 5 1/2 cents to $10.14 3/4, settling nearer session lows. December meal futures dropped $5.1 to $316.1, nearer session lows. December bean oil futures rebounded 70 points to 43.76 cents.
• Wheat: December SRW wheat rose 4 3/4 cents to $6.03 3/4 and near mid-range. December HRW wheat gained 2 1/4 cents to $6.11 and nearer the session low. December spring wheat futures rose 3/4 cents to $6.49.
• Cotton: December cotton futures climbed 39 points before settling at 74.75 cents, nearer session highs.
• Cattle: December live cattle rose $1.05 to $188.275, nearer the session high and hit a 2.5-month high. November feeder cattle rose $1.275 to $249.95 and near the session high.
• Hogs: Expiring October futures gained 10 cents to close at $84.025, while most-active December surged $1.375 to $76.95.
— Quotes of note:
• “Pfizer’s refusal to cooperate with the Committee’s investigation has only heightened my concern that the company may have used profit shifting techniques to avoid paying billions of dollars in taxes on U.S. prescription drug sales.” — Senate Finance Committee Chair Ron Wyden (D-Ore.) in a letter demanding Pfizer’s compliance with a long-running investigation into pharmaceutical companies’ alleged use of offshore tax havens.
• “We are expecting a gradual recovery in global trade for 2024, but we remain vigilant of potential setbacks.” — Ngozi Okonjo-Iweala of the World Trade Organization, as the group lifted its forecast for global trade growth this year.
• $1.982: Average U.S. Gulf Coast per-gallon price for jet fuel in September, down 19.4 cents from the previous month to the lowest average monthly level since August 2021, according to the Energy Information Administration.
Market perspectives:
— Outside markets: The U.S. dollar index was near steady. The yield on the 10-year U.S. Treasury note was higher, trading around 4.10%, with a positive tone in global government bond yields. Crude oil futures were down, with U.S. crude around $75.25 per barrel and Brent around $78.80 per barrel. Gold and silver futures were up ahead of US trading, with gold around $2,663 per troy ounce and silver around $31.45 per troy ounce.
— October U.S. crop reports out noon ET. USDA will update production forecasts for corn, soybean and cotton. Analysts expect slightly smaller crops, with the average pre-report estimates at 15.155 billion bu. for corn (15.186 billion bu. September), 4.579 billion bu. for soybeans (4.586 billion bu. in September) and 14.270 million bales for cotton (14.512 million bales in September). Final wheat production was set at 1.971 billion bu. in the Small Grains Summary at the end of September. The new production forecasts, along with changes to usage projections, will drive changes to projected new-crop ending stocks, which are expected to be 1.926 billion bu. for corn (2.057 billion bu. in September), 549 million bu. for soybeans (550 million bu. in September), 819 million bu. for wheat (828 million bu. in September) and 3.98 million bales for cotton (4.00 million bales in September).
— USDA daily export sales:
• 132,000 MT soybeans to unknown destinations, 2024-2025 marketing year
• 577,928 MT corn received in the reporting period for delivery to unknown destinations , 2024-2025 marketing year
— European sugar companies struggle as oversupply drives down prices. Europe’s sugar producers are facing financial pressures due to increased supplies driving down prices, Bloomberg reports (link). Suedzucker, the largest producer, reported an 81% drop in operating profit for its sugar unit, citing lower EU prices and higher exports. Austrian producer Agrana saw a 49% profit decline and expects challenges ahead. Oversupply from strong harvests in Europe and increased imports from Ukraine have pushed white sugar prices down by 8% in the EU. Many producers are now selling at prices below production costs, adding to financial strain.
— NWS outlook: Record-breaking heat forecast across parts of the Southwest and south-central United States... ...Developing storm system to bring unsettled weather to the Ohio Valley, Great Lakes, and Northeast this weekend... ...Locally heavy rain possible over southeast Florida.
Items in Pro Farmer’s First Thing Today include:
• Grains mostly firmer overnight
• UK economy returns to growth in August
ISRAEL/HAMAS CONFLICT |
— Iran warned Israel that any attack on its nuclear facilities would cross “global red lines.” Israel has vowed to retaliate against Iran after it launched 180 ballistic missiles towards Israel last week. The Biden administration is pressuring Israel not to target the Islamic Republic’s nuclear facilities or oil installations, a move Washington fears could trigger a regional war, push up energy prices and hurt the global economy. Meanwhile, Iranian President Masoud Pezeshkian is in Turkmenistan today for talks with Russian President Vladimir Putin.
Of note: Tehran is threatening in secret diplomatic backchannels to target the oil-rich Arab Gulf states and other American allies in the Middle East if their territories or airspace are used for an attack on Iran. The Wall Street Journal, citing unnamed Arab officials, said that Iran specifically named Jordan, the UAE, Saudi Arabia, and Qatar — all of which host U.S. forces — as potential targets. These countries told Washington “they don’t want their military infrastructure or airspace” involved in offensive operations against Iran. The U.S. has bases and forces throughout the region, and has boosted its presence in recent months to deter Tehran.
RUSSIA/UKRAINE |
— War insurance costs surge for Ukraine grain ships amid intensified Russian attacks. The cost of insuring vessels transiting Ukraine’s Black Sea shipping corridor has surged above 1% of a ship’s value after Russia ramped up attacks on key ports, Bloomberg reports (link). This marks an increase from around 0.75% last week, raising costs by $125,000 per voyage for a $50 million ship. Despite ongoing risks, vessel traffic remains resilient, though continued attacks could deter shipowners. “There have been new requests from clients for war risk insurance in Ukraine,” said Maksym Dubovoy, co-owner of Atria Insurance Brokers, as concerns grow for Ukraine’s vital grain exports.
— Russian missiles strike Odesa region of Ukraine. Russia fired missiles overnight on Ukraine’s Odesa region, marking the fourth attack on the key southern grain port hub or vessels hauling Ukrainian grain this week. The Associated Press said, “The apparent Russian effort to disrupt Ukraine’s grain exports, which bring vital revenue for a national economy battered by more than two years of war, coincided with a renewed push by Ukraine President Volodymyr Zelenskyy to ensure continuing military and financial support from his country’s Western partners.”
— Unilever, the owner of Ben & Jerry’s ice cream and Dove soap, said it had completed the sale of its Russian business to a local company, departing the country more than two years since Russia invaded Ukraine.
POLICY UPDATE |
— USDA provided an update on the effects of the 2018 Farm Bill expiration and the fiscal year (FY) 2025 Continuing Resolution (CR) actions. The one-year extension of the 2018 Farm Bill concluded on Sept. 30 for some programs and Dec. 31 for others. The FY 2025 Continuing Appropriations and Extension Act has modified deadlines for certain farm programs, with some provisions extended to Dec. 20, coinciding with the expiration of the FY 2025 funding measure.
Dairy programs
• The Dairy Indemnity Payment Program (DIPP) will expire on Dec. 20.
• The Dairy Margin Coverage (DMC) program for 2024 remains unaffected, with payments processed until February 2025.
• FSA lacks authority to initiate 2025 DMC signup in January 2025.
Loan programs
• Farm Storage Facility Loan (FSFL) and Sugar Storage Facility Loan (SSFL) programs are unaffected.
• 2024 crop year Marketing Assistance Loans (MALs), Loan Deficiency Payments (LDPs), and Graze-Out Payments remain intact.
• No authority exists for the 2025 crop year loan programs.
Other programs
• The Sugar Loan Program for 2024 crop loans continues without impact.
• The Organic Dairy Marketing Assistance Program 2024 remains unaffected.
Of note: These deadlines and provisions are subject to change if a new farm bill is approved or if another funding measure alters the dates.
CHINA UPDATE |
— Chinese leaders finally acknowledge economic struggles, but Xi Jinping stands firm on policies. In his analysis of China’s economic challenges, Katsuji Nakazawa, Nikkei senior staff writer, highlights how Chinese leaders have finally admitted the economy is facing “difficulties” after months of maintaining an optimistic outlook (link). During a recent Politburo meeting, the leadership acknowledged, “There are some new developments and problems in the current running of the economy,” but signaled no major policy shifts. Nakazawa observes that “the current economic conditions still pose a major challenge to [Xi].”
Despite these admissions, President Xi Jinping remains committed to his existing policies, particularly regarding the real estate market, which he previously tried to cool by saying, “Housing is for living in, not for speculation.” However, recent Politburo comments suggest a shift: “Efforts should be made to reverse the downturn and stabilize the real estate market.”
Nakazawa warns that such hasty policy directions could lead to bureaucratic manipulation, drawing parallels to the disastrous outcomes of the Great Leap Forward. “Bureaucrats could ‘resort to fabricating statistics,’” he writes, pointing out the pressure they face to halt property price drops at any cost. Ultimately, Xi’s reluctance to significantly alter his economic strategy, even in the face of stagnation, leaves many investors and observers disappointed.
— China makes no changes to corn, soybean balance sheets. China’s ag ministry kept its forecasts for corn and soybean production unchanged at 297.01 MMT and 20.54 MMT, respectively. The ministry also made no changes to its 2024-25 import forecasts, leaving corn at 13 MMT and soybeans at 94.6 MMT. Imports are projected to fall 10 MMT (43.5%) for corn and 7.69 MMT (7.5%) for soybeans this year.
— China issues stronger guidelines for futures markets. China issued guidelines for strengthening the supervision of and preventing risks within its futures market, saying authorities would take steps to curb excessive speculation. The document also urged banks to strengthen credit management to prevent enterprises from using credit for speculative trading in commodities futures.
— China, Vietnam set to sign deals on railway links, agriculture. China and Vietnam are expected to sign new agreements, including pacts to boost railway links and agricultural trade, during Chinese Premier Li Qiang’s visit to Hanoi this weekend, according to Reuters (link).
TRADE POLICY |
— Mexico backs U.S. in potential trade disputes with China amid growing influence in Latin America. Mexico’s economy minister expressed support for the U.S. in possible trade conflicts with China, as both nations vie for influence in Latin America through large-scale investment programs. While Brazil, the region’s largest economy, is considering joining China’s Belt and Road Initiative for economic benefits, U.S. officials warn that some Chinese infrastructure could have military applications. The U.S. Southern Command emphasized the need to address economic and national security concerns together in response to China’s expanding presence.
— WTO increases trade growth forecast for 2024 amid lower interest rates. The World Trade Organization (WTO) raised its forecast for global goods trade growth to 2.7% in 2024, up from its earlier prediction of 2.6%, attributing the increase to falling interest rates. However, the WTO warns that potential disruptions, such as oil supply issues or new tariffs, could hinder future trade. The forecast for 2025 has been cut slightly (to 3% from 3.3%), reflecting concerns about uneven global monetary policy. While trade is rebounding, geopolitical tensions and changing trade policies remain risks to long-term growth, particularly in Europe, where imports are expected to decline this year.
ENERGY & CLIMATE CHANGE |
— Exxon Mobil secures largest U.S. offshore carbon storage site in Texas. Exxon Mobil has been granted a lease to store carbon dioxide beneath 271,000 acres of Texas state waters in the Gulf of Mexico, marking the largest offshore carbon storage concession in the U.S. The company will remove 6.7 million tons of CO2 annually from industrial emitters along the Gulf Coast, with plans to scale up through a deal with a gas-gathering project in Louisiana and a potential hydrogen project in Baytown, Texas. Exxon’s carbon capture expansion is supported by new technology and financial incentives from the Inflation Reduction Act.
— China seeks carbon data from ships as trading scheme grows. Authorities in China have started to ask some overseas shipowners to report on their carbon emissions, a move that could help in China’s expansion of its emissions-trading system to cover shipping. Link to details via Bloomberg.
— Gas pipeline firm sues for easement on Kansas property under eminent domain. Panhandle Eastern Pipe Line Company has filed a lawsuit in Kansas federal court to acquire an easement on a Miami County property through eminent domain. The company seeks to operate and maintain a measurement and regulation station as part of its natural gas pipeline system. Citing authority under the Natural Gas Act of 1938, Panhandle claims it has been unable to reach an agreement on compensation with property owners Corey and Michelle Ohlmeier and is asking the court to confirm its right to acquire the easement and determine just compensation.
— Canada announced plans to require large corporations across all sectors to disclose climate-related risks, extending beyond industries under federal regulation. Finance Minister Chrystia Freeland revealed the policy as part of efforts to attract private investment and achieve net-zero emissions by 2050. The government also plans to introduce sustainable-investment guidelines, excluding new natural gas production from “green” labels. The timeline for these changes remains uncertain, and political shifts could impact their implementation as the Conservative Party leads in polls ahead of a possible election.
LIVESTOCK, NUTRITION & FOOD INDUSTRY |
— Farmers affected by drought given extended time for livestock gain deferral. Livestock operators in 41 states and D.C. now have more time to defer gains from sales due to severe drought. The IRS has extended the deferral period until the end of 2025 for farmers in drought-affected counties, allowing them to defer gain by purchasing replacement livestock. This extension applies even if the normal four-year deferral period has expired, according to IRS Notice 2024-70 (link).
— California confirms fourth human HPAI case. California Thursday confirmed that a fourth person has contracted highly pathogenic avian influenza (HPAI) with that person having had contact with infected dairy cattle. The four infected in California were exposed to infected cows at four separate farms, according to the California Department of Public Health. There have been 18 humans that have tested positive for HPAI and all but one of them were exposed to dairy cattle or poultry that had HPAI.
— FDA: Livestock antimicrobial sales drop to second lowest in a decade. Sales of antimicrobials for livestock use reached 24 million pounds in 2023, marking the second-lowest total in a decade, according to the FDA (link). The decline follows regulatory efforts to reduce the use of these drugs to promote animal growth, aiming to preserve their effectiveness for treating human diseases. Sales of medically important antimicrobials, such as tetracyclines and penicillins, fell by 2% last year and have dropped 37% since their peak in 2015. Global efforts to combat antimicrobial resistance (AMR) are intensifying, with the UN calling for a significant reduction in agricultural antimicrobial use by 2030.
OTHER ITEMS OF NOTE |
— Cotton AWP moves lower. The Adjusted World Price (AWP) for cotton is at 60.41 cents per pound, effective today (Oct. 11), down from 60.81 cents per pound the prior week. Meanwhile, USDA announced Special Import Quota #26 will be established Oct. 17 for the import of 34,508 bales of upland cotton, applying to supplies purchased not later Jan. 14 and entered into the U.S. no later than April 14.
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 |