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Summary of Ag Disaster and Economic Loss Assistance for 2023-2024... 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.
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.
An additional $30 million is allocated for specialty crop relief and $3 million for molasses import testing. USDA is required to report quarterly progress on implementation.
An additional $10 billion is allocated for economic relief targeting 2024 crop year losses, structured after Rep. Trent Kelly’s (R-Miss.) FARM Act.
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.
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 US-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.
More soyoil to be used domestically in Brazil... Brazil’s soybean crushing capacity over the next three years is expected to increase at nearly twice the rate of the last three years, according to Itau BBA’s Agro Consulting. Itau BBA is tracking 13 new projects that will add 37,000 metric tons per day to Brazil’s crushing capacity between 2025 and 2027 through new plants and expansions. This will add an additional crushing capacity of 11.1 MMT per year.
Soy crushing capacity in Brazil is expected to increase from 59.4 MMT this year to 72.1 MMT in 2027. South American consultant Dr. Michael Cordonnier says historically, 92% of the crushing capacity is utilized on an annual basis. Therefore, soybean crushing will go from 54.5 MMT in 2024 to 66.3 MMT in 2027, representing an annual growth of 6.8%.
The “Fuel of the Future” law in Brazil will continue to increase the demand for soybean oil for biodiesel. Currently, biodiesel in Brazil contains 14% vegetable oil (B14) with soyoil being the primary feed stock. The mixture is expected to reach 15% (B15) in March 2025, 16% (B16) in March 2026 and 17% (B17) in March 2027. Eventually, the mixture is expected to reach 25% (B25), although these increases need to be ratified annually by the National Energy Policy Council (CNPE).
Biodiesel consumption in Brazil is expected to grow from 9.3 billion liters this year to 12.3 billion liters in 2027, an annual increase of 9.7%. The demand for soyoil for biodiesel production should jump from 5.9 MMT in 2024 to 7.9 MMT in 2027, an increase of 34%. Cordonnier says with this growth in biodiesel consumption, soyoil exports are expected to remain at around 1 MMT annually, below the 1.8 MMT five-year average.
Improvement of ‘Soybean Highway’ in central Brazil... The governor of Mato Grosso last week inaugurated a 100-kilometer section of Highway BR-163, the so-called “Soybean Highway” in central Mato Grosso that went from a 2-lane highway to a limited access 4-lane highway between the cities of Diamantino and Nova Mutum. Before the improvement, this 2-lane section of BR-163 was notorious for having the most fatal accidents due to the heavy flow of trucks and private vehicles. Since completion, this section of the highway has seen an 85% reduction in accidents.