USDA Works to Rehire FSIS Staff Amid New HPAI Strategy Rollout

Updates: Policy/News/Markets, Feb. 19, 2025

— Equities today: U.S. stock index futures were largely flat. Global stocks remained near record highs as investors largely dismissed President Trump’s latest tariff threats on autos, semiconductors, and pharmaceuticals. While European stocks were mixed, with UK markets dipping on higher inflation, the broader market reaction was muted. Analysts suggest tariffs are seen more as negotiating tactics rather than major economic disruptors. Meanwhile, the S&P 500 edged to a record high ahead of Federal Reserve minutes, and expectations for increased defense spending fueled a rally in European arms stocks. Gold prices remained firm. Geopolitical uncertainties, including U.S.-Russia negotiations and the upcoming German election, kept the U.S. dollar firm. Brent crude edged up as markets awaited updates on U.S./Russia talks in Riyadh.

— Gold prices surged to an all-time high on Wednesday as escalating trade tensions and global economic uncertainties fueled demand for safe-haven assets. Spot gold rose 0.3% to $2,943.25 per ounce, after touching a record $2,946.75 earlier in the session. U.S. gold futures climbed 0.4% to $2,961.00. Analysts attribute the rally to President Trump’s latest tariff threats, including a proposed 25% duty on auto, semiconductor, and pharmaceutical imports. Market experts anticipate further gains, with some forecasting a push toward $3,000. Meanwhile, central banks continue to increase gold reserves, adding long-term support for bullion. Other precious metals showed mixed performance — silver gained 0.4% to $32.99, platinum fell 0.6% to $981.56, and palladium edged up 0.1% to $987.75. Market focus now turns to the Federal Reserve’s policy outlook, with analysts expecting only a short-lived bearish impact from the upcoming FOMC minutes release.

— Toll Brothers misses Q1 targets amid market pressures. Luxury home builder Toll Brothers fell short of first-quarter earnings and sales expectations, citing impairments and a delayed apartment property sale. While demand remains healthy, CEO Douglas C. Yearley, Jr. noted affordability constraints and rising inventories are impacting sales, particularly at lower price points. The company reported earnings of $1.75 per share on $1.86 billion in revenue, with home deliveries and contracts also missing forecasts. The news comes as the National Association of Home Builders’ confidence index dropped to a five-month low, reflecting builder concerns over tariffs and rising costs. President Trump’s shifting tariff policies on materials from Canada, China, and Mexico have added uncertainty, potentially raising new home prices by up to $22,000.

— Japan sticks to recovery outlook but flags U.S. trade uncertainty. The Japanese government maintained its moderate economic recovery assessment for the seventh straight month in its February report, despite persistent inflation dampening consumer spending. The economy grew at an annualized 2.8% in the fourth quarter, driven by business investment and an unexpected rise in consumption. However, Tokyo is closely monitoring U.S. trade policies, particularly President Donald Trump’s tariff proposals, which have fueled uncertainty in global markets. The report highlighted Japan’s reliance on transport equipment exports to the U.S. and noted an improved export outlook, while revising imports to “almost flat.”

— UK inflation hits 10-month high, pressuring BoE rate strategy. British inflation unexpectedly surged to 3.0% in January, exceeding the Bank of England’s (BoE) forecast of 2.8% and marking a 10-month high. The rise was driven by smaller-than-usual declines in airfares, higher fuel costs, and increased private school fees due to new VAT charges. Services inflation also climbed to 5.0%, adding to concerns about persistent price pressures. Analysts warn that upcoming tax and wage hikes could further fuel inflation, complicating the BoE’s plans for interest rate cuts. The central bank expects inflation to peak at 3.7% in late 2025, with wage growth and economic cooling playing a key role in future policy decisions.

— Ag markets today:

• Corn and beans mildly firmer, wheat mostly higher this morning. Corn and soybean futures have firmed after light, two-sided trade overnight while wheat is choppy with an upside bias this morning. As of 7:30 a.m. ET, corn futures were trading 1 to 2 cents higher, soybeans were 3 to 4 cents higher and wheat futures were fractionally lower to 3 cents higher. The U.S. dollar index was around 165 points higher, and front-month crude oil futures were about 70 cents higher.
• Beef packer margins remain highly negative. Cash cattle prices have declined $6.66 over the past two weeks, but Choice boxed beef fell more than $16.00 during that period. As a result, packer cutting margins remain deep in the red, causing them to reduce kill hours to manage the red ink amid tight supplies. Cash cattle are expected to decline again this week.
• Cash hog index keeps rising, pork cutout drops. The CME lean hog index is up another 70 cents to $90.19 as of Feb. 17, continuing the strong rebound from the early January seasonal low. The pork cutout fell $3.00 to $99.47 on Tuesday, pressured mostly by a $10.25 drop in primal bellies.

— Ag trade: Taiwan purchased 65,000 MT of U.S. corn. Jordan tendered to buy up to 120,000 MT of optional origin milling wheat.

— Thailand in talks to buy U.S. feed grains amid tariff risks. Thailand’s feed industry is pitching to buy about $2.8 billion worth of agricultural commodities annually from the U.S. instead of other suppliers, as the country seeks to narrow its $35 billion trade surplus and head off possible tariffs on its own exports. Bloomberg reported the Thai Feed Mill Association is in talks with the government to ease some rules to make U.S. feedstuffs like soybean meal and corn more competitive to import. A move to reduce or remove a 2% import tax on U.S. soymeal, potentially via a trade pact, could immediately incentivize Thai feed mills to switch their purchases from Brazil, the head of the Thai Feed Mill Association said. A temporary suspension of WTO-mandated tariffs on corn would also favor supply from the United States, he said. Nearly all of Thailand’s soymeal imports currently come from Brazil, while less than 1% are from the United States. Corn is sourced locally and from Southeast Asian neighbors, while wheat comes from Europe. According to the mill association, the country could switch to buying 3 MMT of soymeal and 4 MMT of corn from the United States. Washington may also pressure Thailand over market access to U.S. pork. Currently, U.S. pork cannot enter Thailand due to local laws banning the use of feed additives commonly used in American livestock production.

— Global soybean trade shifts as Brazil gains ground. Karen Braun of Reuters notes that Brazil and the United States dominate the global soybean trade, accounting for 85% of exports, while China remains the top importer, taking in over 60% of global shipments. However, shifting trade policies and Brazil’s growing crop are reshaping the landscape. Some of Braun’s insights:

• China’s shift: Since the 2018 trade war, China has cut U.S. soybean imports by 12% compared to 2015-2017 levels, while increasing overall imports by 13%. Brazil has capitalized on this, expanding exports to China by 51%.
• European market: The European Union is the second-largest soybean importer, taking 8% of global imports. While Brazil once heavily relied on Europe, its exports there have shrunk to just 7%. Meanwhile, U.S. soybean exports to the EU have grown but face potential new EU agricultural restrictions.
• Tariff tensions: U.S. threats of tariffs on key trade partners, including Mexico and the EU, could further complicate export dynamics.

Bottom line: Brazil’s increasing supply continues to challenge U.S. dominance, raising questions about long-term market stability for American soybean producers.

— Oil prices rise amid supply concerns and geopolitical uncertainty. Oil prices climbed on Wednesday due to potential supply disruptions in Russia and the U.S., while markets await clarity on sanctions amid U.S. efforts to broker peace in Ukraine. Brent crude rose 0.8% to $76.44 per barrel, marking its third consecutive day of gains. WTI crude (March contract) gained 0.9% to $72.48, with the April contract up 0.8% at $72.43. Supply concerns were driven by:

• Russian oil infrastructure attacks: A Ukrainian drone strike on a pumping station reduced Caspian Pipeline Consortium flows by up to 40%, cutting supply by approximately 380,000 barrels per day.
• U.S. cold weather disruptions: North Dakota’s oil production could drop by 150,000 barrels per day.
• OPEC+ speculation: Analysts suggest the group may delay planned supply increases or extend existing cuts.

Additionally, the Trump administration’s proposed tariffs on autos, semiconductors, and pharmaceuticals could impact the global economy and weaken oil demand.

— Goldman Sachs: Ukraine ceasefire unlikely to boost Russian oil flows. Goldman Sachs stated on Wednesday that a potential Ukraine ceasefire and the easing of sanctions on Russia are unlikely to significantly increase Russian oil exports. The bank attributes Russia’s crude oil production limits to its OPEC+ target of 9.0 million barrels per day rather than sanctions, which impact export destinations but not overall volumes. OPEC+, which accounts for nearly half of global oil production, is expected to delay its gradual production ramp-up to July due to Russian compliance and U.S. policy uncertainty. Brent crude is projected to rise to $79 per barrel later this month, with prices currently at $76.

— RFA pushes for temporary biofuel tax credit reinstatement. The Renewable Fuels Association (RFA) is urging the reinstatement of expired biofuel tax incentives to provide stability amid uncertainty surrounding the new Section 45Z clean fuel production tax credit. RFA President Geoff Cooper emphasized that bringing back these credits would bridge the gap until the 45Z credit becomes fully operational in 2025. At the RFA’s National Ethanol Conference, Cooper highlighted ethanol’s critical role in bolstering the farm economy, advocating for regulatory changes such as year-round E15 sales to boost corn demand.

Outlook: Odds are relatively low for any reinstatement anytime soon because this would be a tax change and that would likely have to be part of a coming reconciliation measure on tax cuts, incentives and other tax-related policy.

— Brazil to keep biodiesel blend at 14%. The local mandatory biodiesel blend will remain at 14% from March forward, Energy Minister Alexandre Silveira told reporters, with the national energy council opting not to boost it to 15% as had been expected. Silveira said the biodiesel blend would remain at 14% “until further deliberation, which can be taken at anytime.” Concerns over food prices was a factor in the situation, Silveira said. “President Lula’s government has a big priority: feeding people fairly and minding food prices,” he noted. The Brazilian oilseed lobby group Abiove said the decision was based on the price of soybean oil to the final consumer, but they noted prices already falling for soybeans and soybean oil and they indicated a government review of the biodiesel decision would come “as quickly as possible.”

— U.S./China trade tensions escalate at WTO confab. China condemned U.S. President Donald Trump’s tariffs at a World Trade Organization meeting, warning that such “tariff shocks” could destabilize the global trading system. Beijing’s remarks were dismissed by Washington as hypocritical, with the U.S. accusing China of violating WTO rules. The discussion, part of the WTO General Council’s agenda, highlighted deep divisions over trade policies, with some nations voicing concern over tariffs while others criticized China’s economic practices. WTO Director-General Ngozi Okonjo-Iweala urged calm, emphasizing the organization’s role in managing trade conflicts.

— Trump plans 25% tariffs on autos, semiconductors, and pharmaceuticals. President Trump announced plans to impose 25% tariffs on auto imports, semiconductors, and pharmaceuticals as early as April. The move could significantly impact consumers, with car prices expected to rise by thousands of dollars. The pharmaceutical industry, which saw $176 billion in U.S. imports in 2023, could also face disruptions, with European, Indian, and Chinese firms likely to be hardest hit.

— Senate GOP takes big gamble on “skinny” budget resolution. Senate Republicans have launched their riskiest move of the 119th Congress, advancing debate on a $300 billion-plus budget resolution despite opposition from both Democrats and House Republicans. By a 50-47 vote, Senate GOP leaders cleared a procedural hurdle to consider Budget Chair Lindsey Graham’s (R-S.C.) proposal, which includes $340 billion for the Pentagon and border security — most notably, funding for former President Trump’s border wall.

The budget resolution is a crucial step to enacting Trump’s legislative agenda, requiring a second reconciliation bill to extend his 2017 tax cuts. However, the move exposes Senate Republicans to a wave of Democratic amendments on Medicaid, food stamps, and tax cuts for the wealthy.

Meanwhile, House Republicans insist on a single comprehensive bill, with Speaker Mike Johnson (R-La.) refusing to take up the Senate’s plan, jeopardizing its chances of becoming law.

Democrats, led by Senate Minority Leader Chuck Schumer (D-N.Y.), are seizing the opportunity to frame the GOP’s plan as a giveaway to the wealthy at the expense of social programs. The upcoming “vote-a-rama” will see Democrats forcing Republicans into politically sensitive votes, further complicating GOP unity on tax and spending policy.

— FY 2025 spending deal stalls over Trump spending limits. Congress remains deadlocked on fiscal year (FY) 2025 spending, with Democrats insisting on language that would prevent former President Donald Trump from impounding congressionally approved funds. Republicans refuse to concede, increasing the risk of a government shutdown after March 14. While lawmakers are also grappling with the fallout from Trump’s mass federal layoffs under the Musk-backed DOGE initiative and GOP efforts to extend the 2017 tax cuts, the immediate crisis centers on whether Congress can reach a bipartisan agreement on spending controls.

— Measles outbreak in West Texas. At least 58 measles cases have been reported in West Texas, primarily among children aged 5 to 17, according to state health officials. Some affected individuals were vaccinated, raising concerns about the outbreak’s spread. Given measles’ high contagion rate, officials warn that cases may continue to rise. The airborne virus causes fever, rash, red eyes, and cough, with severe cases leading to pneumonia, encephalitis, or even death. The CDC reported 285 measles cases nationwide in 2023, the highest since 2019.

— China pledges stronger financial support for private firms. China’s top financial regulator vowed to maintain a stable and effective credit supply to private firms while increasing support for their loans, according to an official statement on Wednesday. The National Financial Regulatory Administration also committed to meeting the reasonable financing needs of various real estate enterprises, including private housing firms. These pledges follow a rare meeting between President Xi Jinping and major private companies on Monday, as policymakers seek to boost business confidence in the world’s second-largest economy.

— China’s declining foreign investment: A growing concern. Foreign direct investment (FDI) into China continued its downward trend in January 2025, reaching 97.6 billion yuan ($13.40 billion), a 13.4% decline from the previous year. Key factors behind the decline:

• Economic slowdown: Weakened growth reduces investment appeal.
• Geopolitical tensions: U.S.-China conflicts heighten investment risks.
• Regulatory challenges: Stricter laws impact business operations.
• Rising costs: Higher wages erode China’s cost advantage.
• Supply chain diversification: Firms seek alternatives to Chinese manufacturing.

The decline may slow economic growth, reduce tax revenues, limit job creation, and hinder technological progress. To counter this trend, China may need to ease investment restrictions, implement economic reforms, and mitigate geopolitical uncertainties.

— China moves to tighten grip on rare earth industry. China launched a public consultation on new regulations aimed at strengthening control over its rare earth sector, a critical industry where Beijing has previously leveraged its dominance through export restrictions. Released by the Ministry of Industry and Information Technology, the draft rules cover mining, smelting, and enforcement mechanisms. This move is part of a broader effort to tighten state oversight of the sector, which accounts for nearly 90% of global refined rare earth output. In recent years, China has expanded restrictions, including a 2023 ban on exporting rare earth magnet production technology.

— China says willing to strengthen talks with U.S. on policies. China is willing to strengthen dialog, manage differences with the U.S. to create a fair and predictable policy environment for cooperation between the two countries’ businesses, Minister of Commerce Wang Wentao told his U.S. counterpart Howard Lutnick in a congratulatory letter. China reiterated that tariffs imposed by the U.S. cause damage to normal economic and trade cooperation between the two countries and they hope to resolve concerns through equal talks.

— Trump administration cuts legal aid for migrant children amid border policy shift. The Trump administration is halting legal services for unaccompanied migrant children, removing a crucial resource for thousands who cross the southern border alone. The Department of the Interior issued the order to a nonprofit group assisting these children. Meanwhile, Trump’s border czar, Tom Homan, highlighted a significant drop in border encounters, claiming a record low of 229 in a single day, compared to 11,000 daily under President Biden.

— NWS outlook: Winter storm continues to bring a quick round of accumulating snow from the Mid-Mississippi Valley through the southern Mid-Atlantic today with areas of sleet/freezing rain just to the south, and areas of heavy rain near the Gulf Coast... ...Record cold temperatures will settle south toward the Gulf Coast through the next couple of days while dangerously cold wind chills over the northern Plains will begin to moderate... ...Another round of mountain snow and lower elevation rain moving into the Pacific Northwest today will spread into the northern and central Rockies Thursday into Friday.

(NWS)

21: Univ. of Michigan Consumer Sentiment | Existing Home Sales | USDA Cattle on Feed
25: Consumer Confidence | USDA Food Price Outlook
27: Durable Goods Orders | GDP | USDA Outlook Forum | Outlook for U.S. Agricultural Trade report
28: Personal Income and Outlays (PCE Price Index) | International Trade in Goods | USDA Outlook Forum concludes

Economic aid for farmers | Disaster aid for farmers | Farm Bureau summary of aid/disaster/farm bill extension | 45Z tax incentive program | Poultry and swine line speeds | U.S./China Phase 1 agreement | WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | RFS | IRA: Biofuels | IRA: Ag | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | Gov’t payments to farmers by program | Farmer working capital | USDA Ag Outlook Forum | Eggs/HPAI | NEC task force on HPAI, egg prices | Trump tariffs | Greer responses to lawmakers | Trump reciprocal tariffs |