What’s Ahead for 2025 in Ag Sector Policy

Revised format for today.

— Christmas Eve market schedule and holiday observance. Markets will observe shortened trading hours today, Dec. 24, in light of Christmas Eve:

· Grain futures will close at 12:05 p.m. CT.
· Livestock futures will halt trading at 12:15 p.m. CT.
· Stock markets will stop trading at noon CT.
· Bond markets are recommended to close at 1 p.m. CT, per SIFMA guidance.

Additionally, President Joe Biden signed an executive order granting federal employees the day off on Christmas Eve, though it will not affect the release of regularly scheduled reports. U.S. gov’t offices and markets will remain closed on Wednesday, Dec. 25, for Christmas.

— Equities today: Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward mixed openings.

Equities yesterday: All three major indices registered gains in light, pre-holiday trading action. The Dow ended up 66.69 points, 0.16%, at 42,906.95. The Nasdaq gained 192.29 points, 0.98%, at 19,764.89. The S&P 500 rose 43.22 points, 0.73/%, at 5,874.07.

— Nordstrom family to take department store chain private in $4 billion deal. The Nordstrom family, in partnership with Mexican retailer El Puerto de Liverpool, has agreed to a $4 billion take-private deal for Nordstrom Inc. Shareholders will receive $24.25 in cash per share, with the family retaining majority ownership. This marks a successful culmination of years of attempts by the Nordstrom family, including failed proposals in 2017 and 2018. The deal, which assigns Nordstrom an enterprise value of $6.25 billion including debt, comes as the company struggles to adapt to the rise of e-commerce and discount retailers. Activist investors have also pressured traditional department stores to monetize their real estate holdings. The Nordstrom transaction is expected to close in the first half of 2025, pending regulatory and shareholder approvals.

— Quiet overnight grain trade. Corn, soybeans and wheat held in tight trading ranges during a quiet overnight session. As of 7:30 a.m. ET, corn was trading unchanged to fractionally higher, soybeans were 3 to 5 cents higher, SRW wheat was narrowly mixed, HRW wheat was around a penny higher and HRS wheat was mostly 2 cents higher. The U.S. dollar index was around 100 points higher, and front-month crude oil futures were about 50 cents higher.

— Cash cattle top may be near. Cash cattle averaged $194.73 last week, up 42 cents and the fifth straight weekly gain. While packers purchased less than 50,000 head, they have holiday-shortened slaughters the next two weeks and will have fresh contracted supplies available with the flip of the calendar. Given deeply negative margins, it’s unlikely packers will aggressively bid up for cattle this week, though it’s also unlikely feedlots will actively move cattle at lower prices.

— Building signs of a seasonal bottom for cash hogs. The CME lean hog index is up another 40 cents to $84.75 as of Dec. 20, marking gains in six of the last eight days. During that span, the index has risen $1.42 from what appears like it will be the seasonal low on Dec. 9.

— Mildly negative H&P Report. USDA’s Hogs & Pigs Report estimated the Dec. 1 U.S. hog herd at 75.845 million head, up 384,000 head (0.5%) from last year and 309,000 head more than the average pre-report estimate implied. The breeding herd at 6.004 million head was virtually unchanged. The market hog inventory of 69.841 million head increased 378,000 head (0.5%) from last year. Data implies slaughter will run slightly below year-ago through winter and then expand to around 1% above last year’s levels from spring into early summer. Producers indicated they intend to farrow about the same number of sows as year-ago through winter and then expand by 1.4% during spring. If the litter size continues to run at a record clip, the winter and spring pig crops will top last year’s levels by 1% to 3%.

— What’s ahead for 2025
1. House Ag Chair GT Thompson (R-Pa.) says he wants to get a new farm bill done in the first quarter of 2025.
2. Ethanol producers will again push for year-round E15 after almost getting it in a year-end package this year.
3. Extension of expiring 2017 Trump tax cuts, with several provisions very important for the ag sector.
4. Implementation of Trump’s threatened tariffs and whether retaliation or negotiation is the result.
5. Deportation of illegal migrants and the impact on U.S. farm labor.
6. Trump 2.0 handling of biofuel programs, especially the 45Z program (Sustainable Aviation Fuel).
7. Deregulation. Will Trump 2.0 ease the pressure on the U.S. ag sector relative to chemical and other regulations?
8. If RFK Jr. is confirmed as HHS Secretary, impact he will have on food and other policies important to the ag sector.
9. Pursuit of free trade agreements (FTAs) to create more market access for agriculture are expected under Trump 2.0.
10. Whether the U.S. can get a handle on bird flu (HPAI) or if not, whether the push for a vaccine rises (with trade related impacts).

— Senate GOP eyes early border funding push. Senate Republicans are preparing to fast-track a border funding bill along party lines when the new Congress convenes, reports note. Plans are fluid, but the Senate Budget Committee may advance a budget resolution in early- to mid-January, aiming for Senate approval before Donald Trump’s inauguration. This timeline could position Congress to secure Trump’s signature on the $100 billion border funding package by February. The package, paid for with energy leases and a potential national security component, leverages budget reconciliation to sidestep a filibuster, though narrow margins and House approval pose significant challenges.

— Republicans tie debt limit increase to spending cuts, facing political challenges. House Republicans, led by Speaker Mike Johnson (R-La.), plan to pair a $1.5 trillion debt limit increase with $2.5 trillion in spending cuts over the next decade through a filibuster-proof budget reconciliation bill. While Social Security and Medicare are excluded from the cuts, GOP leaders did not specify which programs would face reductions. The plan requires near-unanimous Republican support, a significant hurdle given internal opposition to raising the debt limit.

— U.S. maritime policy set for revamp under bipartisan legislation; ag export subsidy. Ocean shipping has captured President-elect Donald Trump’s attention, and a new bipartisan bill — the SHIPS for America Act — offers insight into how U.S. maritime policy might evolve during his second term.

With only 80 U.S.-flagged vessels in international commerce compared to China’s 5,500, the legislation aims to revitalize America’s shipbuilding and maritime industries after years of decline. The bill would expand the U.S.-flagged fleet by 250 ships over the next decade and incentivize domestic shipbuilding.

National security concerns are a key driver of the effort. Mike Waltz, a prominent China hawk and Trump’s incoming national security adviser, played a pivotal role in shaping the bill. Waltz warned that China’s dominance in global shipping poses an economic and geopolitical risk, stating, “China could turn off our entire economy by choking off that shipping fleet.”

Key provisions include:
· Requiring 10% of U.S. imports from China to move on US-built, flagged, and crewed vessels.
· Subsidizing agricultural exporters to offset higher shipping costs.
· Prioritizing US-flagged ships at ports.
· Establishing a Maritime Security Advisor and a national maritime strategy.

The bill would also create a trust fund to reinvest maritime industry fees into security programs and infrastructure, signaling a long-term commitment to bolstering U.S. maritime capabilities.

— China plans record public spending in 2025 to boost economy. China’s Ministry of Finance announced plans to ramp up public spending in 2025, prioritizing consumption growth to counter economic challenges, including impending U.S. tariffs. Following a two-day fiscal work conference, officials revealed intentions to issue a record 3 trillion yuan ($411 billion) in special treasury bonds. The funds will support consumption subsidies, technological advancements, manufacturing upgrades, and bolster capital for state banks, Reuters reported, citing unnamed sources. This marks a significant push for fiscal stimulus in the world’s second-largest economy.

— China plans to boost cereal grain consumption. China’s 2024-2035 action plan, jointly issued by the National Food and Strategic Reserves Administration and other government departments, plan to boost consumption of cereal grains and develop the industry through higher production standards, research and international cooperation as part of efforts to enhance food security. The plan also encourages companies and private capital to establish development funds to support the whole grain industry. China said it would “vigorously promote” the health benefits of consuming cereal grains and recommend cereal grain foods in nutritional dietary guidance, particularly in government offices, campuses and military camps.

— Signs of diplomatic thaw: China reconsiders Japanese seafood imports. China is reportedly considering lifting its ban on Japanese seafood imports, imposed in 2023 after Japan began releasing treated Fukushima wastewater into the sea. Nikkei Asia reports that Beijing’s reassessment follows safety tests showing the water met international standards. This shift could signal a broader warming of ties, with Japan also exploring a 2025 visit by Chinese Premier Li Qiang.

Meanwhile, in a separate development, China and India have agreed to address their longstanding border dispute after holding their first high-level talks on the issue since 2019.

— Securing Chinese market for winter wheat a priority for Russia in 2025. Securing access for Russia’s winter wheat and barley to the Chinese market remains a priority for the coming year, Russia’s agricultural watchdog said. China has so far only allowed spring wheat imports from Russia. Winter wheat, which has higher yields and is more profitable for farmers, accounts for about 90% of Russia’s total wheat harvest. The watchdog said it would also work to gain access to the Chinese market for Russian wheat bran, food-grade soybean meal, beet pulp with added molasses, red beans, mung beans, amaranth, flax cake, millet, mustard and malt.

— Russian wheat exports set to break records in early 2025, pressuring South America. Russia is poised to export an unprecedented 29.4 million metric tonnes of wheat in the first half of the 2024-25 season, per Rusagrotrans. This surge, driven by competitive pricing despite falling global rates, comes ahead of a February export quota aimed at stabilizing domestic supply and inflation. South America, particularly Argentina, faces challenges as Russia’s record exports could undermine regional producers. Argentina, grappling with economic strain and a dollar shortage, may struggle with reduced competitiveness in global markets.

The Russian government plans a 10.6 million tonne export cap for February–June 2025. However, projections for December 2024 exports remain robust, expected at 3.7–3.8 million tonnes despite a smaller 2024 wheat harvest. Analysts say this cements Russia’s dominance in global wheat trade, intensifying competition for South American exporters.

— Biden faces decision on US Steel acquisition amid deadlock. President Joe Biden will decide the fate of United States Steel Corp.’s acquisition by Nippon Steel Corp. after a U.S. national security panel deadlocked on the transaction. The Committee on Foreign Investment in the United States (CFIUS) referred the case to Biden after failing to reach consensus, giving him 15 days to announce a decision. Biden has consistently opposed the deal, advocating for US Steel to remain domestically owned. Despite White House ambiguity, reports suggest he plans to block the acquisition. The companies have warned they will challenge any refusal in court.

— Corporate transparency act reporting requirements reinstated. The Fifth Circuit Court of Appeals has reinstated the Corporate Transparency Act (CTA) reporting requirements, overturning a nationwide injunction. This decision, issued on Dec. 23, has critical implications for small businesses across the United States.

Key Points of the ruling
· Injunction lifted: Enforcement of the CTA will resume immediately.
· Reporting deadlines: The Financial Crimes Enforcement Network (FinCEN.gov) in charge of this reporting announced that you now have until Jan. 13, 2025, to file these reports.
· Constitutionality upheld: The court suggested the government is likely to succeed in defending the CTA’s constitutionality.

Impact on small businesses
· Urgent compliance: Businesses must act quickly to meet the filing requirements.
· Required information: Companies must report details about beneficial owners, including names, addresses, and identification numbers.
· Short notice challenges: Many small businesses have raised concerns about the timeline and the administrative burden.

Next steps for businesses
· Prepare and submit BOI reports promptly.
· Monitor updates from the Financial Crimes Enforcement Network (FinCEN).
· Seek professional assistance to navigate the filing process if needed.

Bottom line: This ruling marks a pivotal moment in the CTA’s implementation, urging millions of small businesses to ensure compliance under tight deadlines.

— House report alleges serious misconduct by Matt Gaetz. A bipartisan House committee report revealed “substantial evidence” that former Rep. Matt Gaetz (R-Fla.) paid women, including a 17-year-old girl, for sex and used illegal drugs while serving in Congress. The report, released Monday despite Gaetz’s failed attempt to block it, highlights allegations that led to his resignation from Congress in November and withdrawal from consideration as President-elect Donald Trump’s attorney general. Gaetz, who has denied any wrongdoing, faced resistance from GOP senators to his confirmation, and the report’s findings continue to prompt serious questions about a potential run for Florida governor.

A Wall Street Journal commentary (link) says, “Whether Donald Trump realizes it or not, Republicans did him a favor by making clear that former Rep. Matt Gaetz was unconfirmable as U.S. Attorney General.”

— Bill Clinton hospitalized for observation. Former President Bill Clinton, 78, was admitted to MedStar Georgetown University Hospital in Washington, DC, on Monday after developing a fever, his spokesperson confirmed to CNN. Clinton, described as “awake and alert,” is undergoing testing and observation and is expected to stay at least overnight. The 42nd president has faced multiple health challenges since leaving office, including quadruple bypass surgery in 2004, treatment for a partially collapsed lung in 2005, and a heart procedure involving stents in 2010.

— Summary of Ag Disaster and Economic Loss Assistance for 2023-2024

Crop Loss Assistance

The 2023-2024 disaster assistance program allocates $21 billion, with $2 billion specifically designated for livestock losses due to drought, wildfires, or floods. The program also includes support for timber, citrus, pecan, poultry losses, and losses linked to Mexico’s noncompliance with water rights treaties.

Eligible Losses: Losses due to various natural disasters (e.g., droughts, floods, hurricanes, wildfires, etc.) are covered. This includes losses in revenue, crop quality, production, and impacts on specialty crops like smoke-tainted wine grapes.

Key provisions:

• Payments adhere to established caps from previous programs, with potential higher limits for specialty and high-value crops.
• Affected producers must comply with future crop insurance purchase requirements.
• Payment limits for 2023 and 2024 are separate.
• Total assistance, including crop insurance, is capped at 90% of the loss.
• No gender or race-based provisions will apply, aligning with federal court rulings.

Additional allocations: $30 million is allocated for specialty crop relief and $3 million for molasses import testing. USDA is required to report quarterly progress on implementation.

Economic Loss Assistance

An additional $10 billion is allocated for economic relief targeting 2024 crop year losses, structured after Rep. Trent Kelly’s (R-Miss.) FARM Act. Link to fact sheet.

Payment formula: Payments are calculated based on the difference between expected gross returns and production costs, with a 26% adjustment factor to stay within budget. For certain crops like barley, rice, and peanuts, a minimum payout ensures better support.

Eligibility and pay limits:

• Payments cover eligible commodities, excluding wool, mohair, and honey.
• Limits: $125,000 for non-farming majority AGI and $250,000 for farming-majority AGI. The “average” gross income method aims to improve fairness compared to previous systems.

Of note:

• Separate pay limits apply for economic and crop loss assistance.
• Assistance is not subject to traditional AGI means testing.

Combined, these measures aim to address immediate producer needs while Congress works on reauthorizing the farm bill with enhanced safety nets.

— DOC issues antidumping and countervailing duty orders on shrimp imports. The U.S. Department of Commerce (DOC) announced antidumping (AD) orders on frozen warmwater shrimp from Indonesia and countervailing duty (CVD) orders on shrimp from Ecuador, India, and Vietnam. These measures follow affirmative determinations by both the DOC and the U.S. International Trade Commission.

— Key Bridge reconstruction set to begin January 2025. Work on the new Francis Scott Key Bridge in Baltimore is slated to commence in January 2025, initiating a pivotal phase in rebuilding efforts after the bridge’s collapse in March 2024.

Starting Jan. 7, 2025, initial tasks include:
· Topographic and underwater surveys
· Soil sampling
· Scanning the riverbed

These steps will gather essential data for designing the new bridge structure.

Project timeline
· Pre-construction: January 2025
· Main construction: Starts in 2025
· Completion: Projected for Fall 2028

Key details
· Cost: Nearly $2 billion
· Contractor: Kiewit Infrastructure Co., awarded $73 million for Phase 1
· Design: New bridge to stand 230.9 feet above water, 45 feet taller than the original
· Funding: Fully funded by a federal spending package
· Design: The Maryland Transportation Authority (MDTA) is employing a Progressive Design-Build strategy, fostering collaboration between designers and builders to enhance efficiency and adaptability. This approach prioritizes safety improvements, modern design features, and community engagement to ensure the project meets environmental and navigational standards.

— NWS weather: Heavy rain and mountain snow returns to the West Coast region Wednesday night... ...Showers and thunderstorms developing over portions of the south-central states... ...Relatively mild conditions across the majority of the country leading up to Christmas.

(NWS)