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Your Pro Farmer newsletter is now available... USDA slashed 2024-25 corn ending stocks 200 million bu. in the December Supply & Demand Report, which triggered an initial bullish reaction, though futures were unable to clear the October highs and retreated. The only other surprise in the report was an unexpected increase to the cotton crop estimate, which pushed up ending stocks. Efforts to extend the 2018 Farm Bill and provide financial aid to farmers have hit a political snag. Lawmakers are now exploring passing a clean, one-year 2018 Farm Bill extension and incorporating emergency economic aid for farmers in a separate disaster aid package. There was a lot of economic news, as China pledged monetary policy easing and fiscal stimulus to boost its economy. Chinese officials are also considering letting the yuan weaken to counter expected tariffs from the Trump administration. U.S. consumer and producer prices increased in November, though economists still expect the Fed to cut interest rates another 25 basis points following the Dec. 17-18 monetary policy meeting. We cover all of these items and much more in this week’s newsletter, which you can access here.
Mexican cattle imports could restart soon... Jennifer Moffitt, USDA undersecretary for marketing and regulatory programs, said some imports of Mexican cattle may resume once Mexico implements new trade protocols for New World screwworm (NWS). To resume shipments, Mexico must set up USDA-approved holding pens where inspectors will check and treat Mexican cattle for screwworm before they cross the border, Moffitt said.
Moffitt said, “We could have some (imports) certainly before the holidays,” with more in January.
Meanwhile, USDA’s Animal and Plant Health Inspection Service (APHIS) announced $165 million in emergency funding to prevent the spread of NWS, a parasitic fly larvae that infests warm-blooded animals. The funding aims to protect U.S. livestock and enhance eradication efforts in Mexico and Central America.
An industry source told us, “There is a lot of work to be done yet by APHIS and Senasica (Mexico’s ag ministry). The best guess from our team in Mexico is that it will be early to mid-January before cattle trade across the border resumes.”
ACE advocates for robust 45Z tax credit policies... The American Coalition for Ethanol (ACE) has provided detailed feedback to the House Ways and Means Committee on the 45Z Clean Fuel Production Tax Credit. As federal agencies prepare to issue critical guidance, ACE emphasized the credit’s transformative potential for cleaner technologies and sustainable agriculture, while urging for enhancements to ensure effective implementation.
Key recommendations from ACE CEO Brian Jennings include:
- Extension of the 45Z tax credit: Advocating for a 7–10-year lifespan to encourage long-term investments in biofuels and climate-smart practices.
- Improved guidance and flexibility: Calling for updates to 45Z guidance informed by empirical data and science to avoid impractical bundling requirements that undervalue individual contributions to carbon intensity (CI) reductions.
- Support for climate-smart agriculture: Promoting individual and stacked agricultural practices for emissions reductions, with GREET model integration and flexible verification methods.
- Inclusion of emerging innovations: Encouraging frequent updates to include new practices and technologies, ensuring equitable access to benefits.
- Fair CI scoring policies: Advocating for updated land use change modeling to maintain competitive positioning of U.S. biofuels globally.
The new 45Z biofuels credit is set to begin Jan. 1, regardless of when official guidance is released. The Treasury Department indicated some details would come before Jan. 20, but did not clarify how thorough the eventual rule would be. As we reported earlier, inside sources tell us the 45Z guidelines may be finalized by the incoming Trump administration.
Another key is the time it takes for EPA to either approve or reject permits under various biofuel or carbon sequestration efforts. One industry source said his firm was initially told by EPA that it would take 12 months to either approve or reject their carbon sequestration request but to date the timeline is 31 months and still waiting.
Louisiana detects first presumptive positive human case of H5N1... The Louisiana Department of Health said on Friday it has detected the first presumptive positive human case of H5N1 in the state. The individual had come into contact with sick and dead birds, which are suspected to have been infected with H5N1.
Russia suspends grain shipments to Syria... Russian wheat supplies to Syria have been suspended because of uncertainty about the new government and payment delays, Russian and Syrian sources said, while two vessels carrying Russian wheat for Syria did not reach their destinations. A Russian source close to the government told Reuters supplies to Syria have been suspended because exporters are concerned by uncertainty over who will manage wheat imports on the Syrian side following the change of power in Damascus.
Shipping data shows one vessel, the Mikhail Nenashev, is anchored off the Syrian coast, while another, the Alpha Hermes, is heading towards the Egyptian port of Alexandria after remaining off the Syrian coast for several days.
A Syrian source told Reuters that vessels were delayed because of uncertainty over payments and that Russia and the interim government were in communication regarding the issue. A Russian industry source said Russian exporters were in contact with the Syrian side.
USDA extends biorefinery loan program deadline... USDA’s Rural Business-Cooperative Service has extended the application deadline for its Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program (9003 Program) through Dec. 31. Traditionally closing on Oct. 1 and April 1, the program provides up to $250 million in loan guarantees to support the development, construction and retrofitting of innovative technologies.
CBC declines to back any candidate in House Ag Committee race... The Congressional Black Caucus (CBC) has decided not to endorse a candidate in the heated race to lead the House Agriculture Committee, dealing a setback to current Ranking Member David Scott (D-Ga.). While CBC historically champions Black members and the seniority system in internal Democratic politics, concerns about Scott’s health have influenced the group’s stance. Scott, who became the first Black leader of the Agriculture panel in 2021, skipped a CBC-hosted candidate forum this week, raising questions about his leadership prospects. Though there were discussions about potential Black candidates like Rep. Jahana Hayes (D-Conn.) or Rep. Bennie Thompson (D-Miss.), neither is pursuing the position. Besides Scott, other candidates are Rep. Jim Costa (D-Calif.) and Rep. Angie Craig (D-Minn.). If Scott falters, our sources signal Costa may have the votes to become the ranking Democrat on the panel.
DOGE looking at SNAP fraud... Vivek Ramaswamy set his sights on USDA’s low-income food assistance program, formerly known as food stamps, suggesting that cutting “waste & fraud in SNAP would save billions annually” in a post on X. Trump tapped Ramaswamy and Elon Musk to lead the Department of Government Efficiency (DOGE), a commission focused on reducing government spending.
Trump’s evolving stance on grocery prices... President-elect Donald Trump has recently adopted a more measured tone on the issue of grocery prices, acknowledging the challenges of reducing costs despite making it a central campaign promise. During his campaign, Trump pledged to “significantly reduce” grocery prices, making it a key selling point of his bid for the presidency. In a Time magazine interview, Trump admitted, “It’s hard to bring things down once they’re up,” signaling a shift from his earlier confidence.
Trump has outlined several potential strategies to address food pricing:
- Energy costs: Lowering energy prices could indirectly reduce grocery costs.
- Supply chain improvements: Streamlining logistics could enhance efficiency.
- Oil production: Boosting domestic oil production to reduce overall inflation.
Trump’s approach to food pricing faces notable obstacles:
- Tariffs: Proposed tariffs could raise the cost of imported goods, impacting food prices.
- Labor shortages: Immigration policies may disrupt the agricultural labor force.
- Economic complexity: External factors like global markets and weather make food prices difficult to control.
India’s rice stocks hit record high, fueling export speculation... India’s rice stocks surged to a record 44.1 MMT as of Dec. 1, far exceeding the government target of 7.6 MMT, according to the Food Corporation of India. Wheat stocks also surpassed targets, reaching 23.3 MMT against the goal of 13.8 MMT. This historic rice surplus has fueled speculation of increased exports, which were previously restricted due to supply concerns. While export limits on most rice varieties have been lifted, restrictions on broken rice remain.
U.S. manufacturers stockpile ahead of U.S. tariff threats... U.S. manufacturers are scrambling to secure critical parts and raw materials as new tariffs loom under Donald Trump’s presidency. A survey by GEP and S&P Market Intelligence shows demand for North American factory inputs surged to its highest level since mid-2023 following Trump’s November victory. Supply chain experts highlight industrial and consumer packaged goods producers as key players in the stockpiling race, aiming to maintain competitive pricing. Trump has vowed to introduce tariffs soon after his Jan. 20 inauguration, with potential rates of 25% on imports from Mexico and Canada and up to 60% on goods from China, causing significant concern among manufacturers.