What to Expect at Feb. 27-28 USDA Ag Outlook Forum

USDA Sec. Rollins scores big win as first tranche of paused funding released

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February 21, 2025 07:43 AM

Updates: Policy/News/Markets, Feb. 21, 2025

— USDA Sec. Brooke Rollins scores a big first-week-on-job win as USDA releases the first tranche of funding paused due to a review of Inflation Reduction Act (IRA) allocations. Following White House directives, USDA is honoring existing contracts with farmers, releasing approximately $20 million for the Environmental Quality Incentive Program, the Conservation Stewardship Program, and the Agricultural Conservation Easement Program.

Rollins criticized the Biden administration’s handling of IRA funding but affirmed commitments to farmers who had already made investments. This marks the initial phase of released funding, with further announcements expected as USDA continues its review to ensure taxpayer dollars support farmers and ranchers rather than unrelated initiatives.

— Rollins pledges support for farmers amid bird flu concerns. USDA Secretary Brooke Rollins held a roundtable Thursday with farmers from multiple states to discuss bird flu and broader agricultural challenges. She emphasized collaboration with the White House to combat avian flu, assist poultry farmers, and lower grocery costs, particularly egg prices. Rollins also addressed expanding access to capital for young farmers, reducing input costs, and ensuring disaster relief. USDA reaffirmed its commitment to honoring financial promises to farmers.

— Senate passes ‘skinny’ budget, setting stage for GOP Showdown. The Senate early this morning passed its “skinny” budget resolution after a lengthy vote-a-rama, marking the first step toward enacting President Donald Trump’s legislative agenda. While Trump initially favored the broader House GOP resolution, Senate Republicans successfully maneuvered to keep the process moving, securing his approval. This provides Trump flexibility should the House plan falter. However, Speaker Mike Johnson (R-La.) faces a challenge rallying his slim majority to support the House resolution, which includes controversial spending cuts. Moderates are wary of the proposed $880 billion in Medicaid-related reductions, fearing backlash from constituents are supporting the resolution to advance negotiations.

Meanwhile, Congress faces a March 14 government funding deadline with no agreement in sight. Without progress soon, a government shutdown looms.

— Senate rejects key Democratic amendments on budget resolution. The Senate voted down two major Democratic amendments to the budget resolution, both aimed at addressing economic and public health concerns.

· Sen. Amy Klobuchar’s (D-Minn.) amendment: Proposed blocking tax cuts for billionaires if food inflation rose, but failed 48-52 despite one Republican vote by Susan Collins of Maine.
· Sen. Elissa Slotkin’s (D-Mich.) amendment: Sought to protect funding for avian flu response efforts but was rejected 47-53 along party lines.

These defeats underscore ongoing partisan divides, with Senate Republicans prioritizing military and border security spending while postponing tax policy decisions.

— Bessent to urge China on economic rebalancing. U.S. Treasury Secretary Scott Bessent plans to push China to shift its economy toward consumption in a call with his Chinese counterpart on Friday, he told Bloomberg TV in an interview. While the conversation will be introductory, it will also touch on fentanyl. Bessent and his counterpart aim to meet in person at the World Bank-IMF meeting in April. He also noted he will skip next week’s G20 finance ministers meeting in South Africa, expecting China to do the same.

Of note: China’s Vice Premier He Lifeng will have a video call Bessent to communicate important issues in the economic field between the two countries, the foreign ministry said on Friday.

— “DOGE dividend” proposal sparks inflation concerns. Economists warn that President Trump’s potential plan to issue a $5,000 “DOGE dividend” tax payment to households could fuel inflation by increasing consumer spending and disrupting supply-demand balance. Historical precedent, such as pandemic-era stimulus checks, suggests a similar inflationary effect. Experts like Preston Brashers (Heritage Foundation) and Judge Glock (Manhattan Institute) caution that the proposal could drive prices up. However, supporters argue that tying the payments to government savings and tax-paying households could mitigate inflation risks. The debate continues on whether this policy would help or hurt the economy.

Of note: The president’s floating of taxpayer payouts is drawing lukewarm support from congressional Republicans.

— NCC seeks rule change to divert 400 million eggs to market. The National Chicken Council (NCC) has petitioned the FDA to lift a regulation preventing broiler industry eggs from entering the food supply, arguing the move could ease record-high egg prices caused by the bird flu outbreak. The 2009 rule forces broiler producers to discard surplus hatching eggs instead of selling them to processors, despite government risk assessments affirming their safety. If granted, the request would allow nearly 400 million eggs annually to be used in processed foods like bread, pasta, and mayonnaise, alleviating strain on table egg supplies. As we have noted before, NCC previously sought relief under the Biden administration in 2023 but was denied. Now, with egg prices soaring, the organization is urging swift action from the Trump administration.

— U.S., Ukraine revive minerals deal talks amid strained relations. Ukraine and the U.S. are accelerating negotiations on a critical minerals deal following tensions between President Volodymyr Zelenskyy and President Donald Trump. After rejecting an initial U.S. offer, Zelenskyy met with special envoy Keith Kellogg, expressing renewed optimism. The deal, which would grant U.S. access to Ukraine’s mineral resources in exchange for security guarantees, is central to Trump’s efforts to end the war. While discussions continue, Kyiv seeks a more balanced agreement amid concerns over sovereignty and economic fairness.

Meanwhile, the U.S. signaled sanctions relief for Russia could be on the table as President Trump rushes toward a deal to end the three-year conflict in Ukraine.

— Trump’s grip on GOP secures Patel’s FBI confirmation. With the Senate narrowly confirming Kash Patel as FBI director in a 51-49 vote, Trump has successfully installed all but one of his most controversial picks. Only GOP Sens. Lisa Murkowski (Alaska) and Susan Collins (Maine) defected, a stark contrast to past FBI director confirmations that saw broad bipartisan support. Despite initial Republican reservations about nominees like Robert F. Kennedy Jr., Tulsi Gabbard, and Pete Hegseth, most ultimately voted in favor. One key nomination still in play is Elbridge Colby for a top Pentagon role, with the White House reaffirming Trump’s “full support.”

Meanwhile, President Trump’s nominee for Education secretary, Linda McMahon, is one step closer to confirmation.

DOGE

— Judge rejects union challenge to Trump-era federal layoffs. U.S. District Judge Christopher R. Cooper ruled against labor unions seeking to block the Trump administration’s mass firings of federal employees. The decision allows the government to proceed with planned layoffs, affecting thousands of workers across multiple agencies, including over 6,000 at the IRS. Judge Cooper determined the court lacks jurisdiction, directing unions to the Federal Labor Relations Authority (FLRA). More than 500,000 federal workers could be affected, with economic concerns raised. The Trump administration asserts the president has legal authority to reshape the federal workforce. Unions vow continued legal action, arguing the layoffs threaten essential services.

— Limits on DOGE’s access to tax data. The White House and the Treasury have agreed that the Department of Government Efficiency (DOGE) will not be allowed to review individual taxpayers’ data, according to the Washington Post. Instead, it will have access only to anonymized data, like academic researchers. Democrats had raised concerns over DOGE’s push for access to personal records.

— Musk’s “chainsaw for bureaucracy” sparks controversy. Billionaire Elon Musk, speaking at a conservative event, brandished a chainsaw as a symbol of his push to shrink the federal workforce within the Department of Government Efficiency (DOGE). He likened budget cuts to “throwing darts in a room full of targets,” emphasizing efforts to eliminate waste. The Trump administration and Musk claim they are targeting low-performing employees in non-critical roles, but some note that recently promoted workers and those with strong performance reviews are among those being fired.

FINANCIAL MARKETS

— Equities today: Asian and European shares were mixed but mostly firmer in trading overnight. Hong Kong’s Hang Seng rallied by around 4% to close at its highest level since February of 2022. U.S. stock indexes are set to open narrowly mixed. European stocks rose, following strong gains across Asian markets as results from China’s Alibaba Group Holding Ltd. fueled a fresh wave of optimism over artificial intelligence. In Asia, Japan +0.3%. Hong Kong +4%. China +0.9%. India -0.6%. In Europe, at midday, London +0.1%. Paris +0.6%. Frankfurt +0.1%.Gold slipped from a record and the dollar ticked higher. Fed speakers:Jefferson (11:30 a.m. ET) and Daly (11:30 a.m. ET).

Equities yesterday: A sales warning from Walmart was enough to pressure stocks Thursday with all three major indices finishing in negative territory. The Dow dropped 450.94 points, 1.01%, at 44,176.65. The Nasdaq lost 93.89 points, 0.47%, at 19,962.36. The S&P 500 declined 26.63 points, 0.43%, at 6,117.52.

Walmart’s guidance for this year was weaker than Wall Street expected, causing its stock to plummet 6.5%, and each of Walmart founder Sam Walton’s three living children saw more than $6 billion knocked off their net worth. Walmart, the world’s largest company by revenue, cautioned about tariffs. “We’re wired to try and save people money, so that’ll be our ultimate goal,” CEO Doug McMillon said.

— Dollar stumbles as yen surges on Japanese inflation, euro struggles amid weak growth. The dollar is heading for a third consecutive weekly decline as traders see Donald Trump’s second-term trade threats as mostly bluster, while the yen surged past 150-per-dollar after a spike in Japanese inflation fueled rate hike expectations. However, Bank of Japan chief Kazuo Ueda sought to contain the momentum by signaling potential bond purchases. Meanwhile, the euro weakened following disappointing business activity data from France and only modest improvement in Germany. With U.S. tariffs yet to materialize and strong domestic economic data, investors remain cautious on dollar holdings, while the yen remains buoyant on tightening monetary policy expectations.

— Nissan shares jumped 9.5% after the Financial Times reported a high-level Japanese group has drawn up plans for Tesla to invest in the struggling carmaker. Nissan declined to comment, while Tesla didn’t reply to a request for comment.

— Nvidia shares have clawed back most of their losses since investor fears surrounding DeepSeek’s AI claims fueled a historic rout last month. The stock is up about 4% this year.

AG MARKETS

— Ag markets today:

Quiet grain trade overnight. Corn and soybean futures modestly favored the downside in quiet overnight trade while wheat firmed. As of 7:30 a.m. ET, corn and soybean futures were trading fractionally to a penny lower, winter wheat markets were 4 to 5 cents higher and spring wheat was mostly 2 cents higher. The U.S. dollar index was more than 300 points higher, and front-month crude oil futures were about 65 cents lower.
Wholesale beef prices continue to fall. Choice boxed beef prices fell another $1.26 to $312.63 while Select dropped 58 cents to $303.18. Packers are slowing slaughter runs amid deeply negative margins, but that hasn’t supported wholesale prices as retailer beef buying remains seasonally weak.
Cash hog index, pork cutout going in opposite directions. The CME lean hog index is up another 24 cents to $91.22 as of Feb. 19, extending the rebound from the seasonal low on Jan. 9, though that’s the smallest daily gain in a couple of weeks. The pork cutout fell another $1.49 to $94.03 Thursday, pressured primarily by primal bellies that dropped another $7.46.

— Placements the focal point in Cattle on Feed Report. Analysts surveyed by Reuters expect USDA to show the Feb. 1 large feedlot inventory (1,000-plus head) down 0.8% from year-ago in this afternoon’s Cattle on Feed Report. Placements are expected to be up 2.2% from last year, though the pre-report range extends from down 1.7% to up 6.1%, making that the key figure in the report. The U.S. had not reopened the border to Mexican cattle imports in January, though the year-ago figure was the lowest in eight years. January marketings are expected to be up 2.1% from last year.

— U.S. soybean sales to China slowing. USDA weekly Export Sales activity for China showed a continued slowdown in sales of US soybeans but solid results for upland cotton. Sales activity for 2024-25 included net reductions of 518 metric tons of sorghum, net sales of 101,241 metric tons of soybeans, and net sales of 41,428 running bales of upland cotton. Activity for 2025 included net sales of 2,696 metric tons of beef and 2,440 metric tons of pork.

— USDA’s 101st Annual Agricultural Outlook Forum will be held Feb. 27-28 near Washington, DC, with the theme of “Meeting Tomorrow’s Challenges, Today.”

The look at corn and soybean acreage under current conditions will be among the key focal points. The agency produced its budget-related figures last fall that were part of the Agricultural Projections publication that was released ahead of the conference. It is not clear how much the figures released next week will change relative to the initial budget-related outlooks.

USDA analysts in the forecasts released next week are not expected to make any assumptions on the impact of potential tariffs on US agricultural commodities. For the WASDE report, the analysts use the policy actions that are in effect at the time and their outlooks presented next week should follow that track.

USDA will update its forecast for U.S. Agricultural Trade which again should not bring in any impacts from potential tariffs since those are not yet in effect. And the retaliatory tariffs announced by China have not targeted U.S. agricultural products. Despite the lack of tariffs currently in place on imports from Canada and Mexico, those potential levies are likely to dominate or at least be one of the key discussion points in “hallway chatter” that takes place throughout the event.

USDA Secretary Brooke Rollins has already made several public appearances and has held several meetings at USDA in the short time she has occupied the office. Her remarks will be the first time some of the attendees that typically number more than 1,000 will hear from the USDA leader.

The other hallway chatter point will be on government workers and how many may have been fired because of being probationary workers.

— India refiners cancel palm oil orders amid price surge. Indian refiners have canceled up to 100,000 metric tons of crude palm oil (CPO) orders scheduled for March-June delivery due to rising prices, Reuters reports. An initial cancellation was reported Thursday (Feb. 20), with an additional 30,000 metric tons canceled by early Friday. CPO prices have surged over 11% in the past four weeks. Meanwhile, imports of soybean oil for Feb.-March arrival have increased due to its more favorable pricing compared to CPO.

Reuters reported that India is likely to raise import taxes on vegetable oils for the second time in less than six months to help support thousands of oilseed farmers reeling from a crash in domestic oilseed prices, citing two government sources.

— Indonesia rules out palm oil export limits before Ramadan, a trade ministry official confirmed to Reuters. This clarification comes amid a five-week rise in palm oil prices, which had fueled speculation about potential export limits. The official told Reuters that such reports have contributed to the price increase but emphasized that no ban has been discussed.

— China to boost ratoon rice production in effort to strengthen food security. China’s ag ministry will ramp up support for ratoon rice cultivation starting this year, with plans to expand production by around 667,000 hectares by 2030, as part of a broader effort to boost crop yield and strengthen food security. The ministry plans to improve seed varieties, farming practices, and policy support in regions with potential for ratoon rice. Ratoon rice is a type of rice re-grown from the root stubs left after the first harvest, allowing for a quicker second harvest to boost rice production in some regions. The new target represents a 66.7% increase in production by 2030 compared to 2022 levels.

— Thai farmers protest as government support falls short. Thailand’s measures to support rice farmers have failed to meet expectations, with growers facing plummeting prices and rising costs. Paddy prices have dropped 30% year-on-year to 8,600 baht ($256) per ton, pressuring the Pheu Thai-led government to act. Farmers in Ayutthaya demand prices of 11,000 baht per ton, warning of large-scale protests. The government has proposed a 1.89-billion-baht package, but it awaits cabinet approval. Meanwhile, India’s resumption of rice exports threatens Thailand’s market, with exports expected to drop 24% this year.

— Cotton AWP rises. The Adjusted World Price (AWP) for cotton moved up to 54.67 cents per pound, effective today (Feb.21), up from 53.99 cents per pound the prior week and now at the highest level since the week of Jan. 3 when it was 55.03 cents per pound.

— Agriculture markets yesterday:
• Corn: March corn rose 1/2 cent to $4.98, closing near the session low.
• Soy complex: March soybean futures rallied 13 3/4 cents to $10.45 1/2 and settled on session highs. March meal futures climbed $1.30 to $296.00, nearer session highs. March bean oil futures rose 96 points to 47.26 cents, near session highs.
• Wheat: March SRW wheat fell 6 1/2 cents to $5.84 1/2 and nearer the daily low. March HRW wheat lost 6 1/4 cents to $6.07 1/2, nearer the daily low. March HRS fell 3/4 cent to $6.32 3/4.
• Cotton: March cotton futures settled 27 points lower to 65.97 cents, near mid-range.
• Cattle: April live cattle fell 97 1/2 cents to $193.80 and nearer the session low. Prices posted a seven-week-low close. March feeder cattle lost $2.20 to $266.825 and nearer the session low.
• Hogs: Futures continued their slide Thursday, with nearby April falling $1.225 to $88.525.

ENERGY MARKETS & POLICY

— Oil prices dip but maintain weekly gains amid supply disruptions and Ukraine tensions. Oil prices fell on Friday, with Brent crude down 62 cents, 0.81%, to $75.86 per barrel and WTI losing 63 cents, 0.87%, to $71.85. Despite this dip, both benchmarks posted weekly gains of about 1.5%, marking the largest advance since early January. Market uncertainty persists as supply disruptions in Russia, caused by a Ukrainian drone attack on a key pipeline, counterbalance rising U.S. crude stockpiles. Meanwhile, geopolitical tensions remain high, with Ukraine’s President Zelenskyy clashing with President Trump over peace negotiations. Analysts suggest that expectations of increased demand from the U.S. and China could influence oil prices in the coming weeks.

— Oil prices extend gains amid supply risk and geopolitical tensions. Oil prices on rose for a third consecutive session on Thursday, supported by drawdowns in U.S. fuel inventories and ongoing supply concerns in Russia. Brent crude settled at $76.48 per barrel, up 44 cents, 0.58%, while WTI gained 32 cents, 0.44%, to $72.57 for March delivery. Despite a slight build in U.S. crude stockpiles, gasoline and distillate drawdowns kept overall inventories stable, sustaining price momentum. Geopolitical risks intensified as Russia targeted Ukrainian gas infrastructure, while Ukrainian drone strikes reduced Russian CPC oil flows by 30-40%. Meanwhile, potential oil flows from Iraq’s Kurdistan region could add 300,000 bpd to supply if Turkey and Iraq finalize agreements. However, macroeconomic concerns loomed, with analysts warning that Trump’s proposed tariffs on imports, including autos, could weaken global trade and fuel demand. Despite these pressures, oil prices remained resilient, with traders eyeing OPEC+ decisions and U.S. economic data for further direction.

TRADE POLICY

— U.S. farmers to bear cost of Trump’s Canada fertilizer tariffs, Nutrien warns. Top fertilizer supplier Nutrien Ltd. cautioned that U.S. farmers will face higher costs if President Donald Trump’s proposed tariffs on Canadian fertilizer take effect. CEO Ken Seitz stated that the financial burden would be passed on to growers, as the U.S. depends on Canada for over 80% of its potash supply. With fertilizer prices already at their highest seasonal level since 2022, the timing of the tariffs will determine their impact on demand. Trump recently postponed 25% tariffs for a month after Canada agreed to tougher border measures. Nutrien shares surged over 5% as the company projected higher sales volumes for 2025.

— Canadian trucking company plans U.S. move amid tariff concerns. TFI International, a Canadian trucking company, is planning to relocate to the United States as more Canadian businesses consider shifting their operations in response to President Trump’s tariff threats, the Wall Street Journal reports (link). The company, which has been operating in the U.S. since 2011, already conducts about 70% of its business south of the border. CEO Alain Bédard stated that the move would better align the company with its “shareholder base and commercial presence.” The Trump administration’s proposed tariffs on Canadian imports are causing significant concern among Canadian businesses. Many companies are (1) delaying expansion plans, (2) putting hiring on hold, or (3) revising sales outlooks downward.

These reactions indicate how the proposed levies could potentially reshape cross-border supply chains. According to a recent survey by KPMG Canada, nearly half of the business leaders surveyed are planning to either shift investments to the U.S. or establish production operations there. This move is aimed at securing tariff-free access to the U.S. market and reducing costs considering the potential trade barriers.

POLITICS & ELECTIONS

— Kentucky’s Senate seat likely to stay red after McConnell. Sen. Mitch McConnell’s (R-Ky.) retirement in 2026 is expected to keep Kentucky’s Senate seat in Republican hands, thanks to a strong GOP bench. Leading contenders include former Attorney General Daniel Cameron, a McConnell protégé, and Rep. Andy Barr, who has pledged loyalty to Trump’s “America First” agenda. Businessman Nate Morris and House Oversight Chairman James Comer are also potential candidates. While Democratic Gov. Andy Beshear could be a formidable challenger, he has yet to show interest in the race. McConnell’s departure marks the end of an era, but Kentucky’s deep red tilt favors another Republican successor.

— Germany’s leadership shift amid U.S./EU tensions. As Trump reshapes U.S./European relations, Germany is set for a pivotal parliamentary election on Sunday, determining its stance on NATO, the EU, and support for Ukraine. Chancellor Olaf Scholz faces tough odds after his coalition collapsed, with Friedrich Merz’s center-right CDU leading the race. However, the far-right AfD, backed by Elon Musk, remains a strong contender. Even if Merz wins, Trump’s administration may not find a smooth partnership, given Merz’s recent criticisms of Vice President Vance and U.S. reliability.

— Amy Walter: “There’s no easy fix for Democrats’ political woes.” Walter, who leads the Cook Political Report, writes: “The good news for Democrats: Everyone in the party agrees that they are in trouble and in desperate need of a new direction. The bad news is that there’s not an easy or universally agreed-upon fix to their political problems. It’s hard to reshape perceptions of a political party when that party is shut out of power in Washington. The results of the upcoming midterm elections will be driven by perceptions of the party in charge, not the party in the minority. In other words, Democrats’ success in 2026 depends more on Republicans failing than anything else.”

WEATHER

— NWS outlook: Widespread record cold temperatures continue through Friday from the Central Plains to the Gulf Coast before a slow warming trend sets in by the weekend... ...An atmospheric river will bring rain to the Pacific Northwest starting this weekend into the early work week... ... Showers and thunderstorms forecast along the western Gulf Coast Saturday.

KEY DATES IN FEBRUARY

LINKS