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La Niña expected to persist through late winter/early spring... La Niña conditions emerged in December, reflected by below-average sea surface temperatures (SSTs) across the central and east-central equatorial Pacific Ocean. The U.S. Climate Prediction Center (CPC) says models suggest there’s a 59% chance of weak La Niña conditions persisting through the early spring before transitioning to ENSO-neutral. CPC says, “Weak La Niña conditions are less likely to result in conventional winter/spring impacts, though predictable signals can still influence the forecast guidance.”
Brazil freight lobby sees grain shipping disruptions after new toll rule... A freight lobby has warned of the risk of “logistical collapse” after Brazilian transport agency ANTT changed payment system rules for trucks moving agricultural commodities and other cargo. The introduction of electronic tags as the only accepted means of payment comes as Brazil begins harvesting its record soybean crop. ANATC, whose members move a combined 150 MMT of cargo including soybeans, corn and soybean meal and have 2.2 million registered truck drivers, said firms supplying the tags have been unable to meet high demand.
The transport agency said companies had ample time to adapt, and said there are 20 accredited suppliers of the mandatory tags. It said the technology aims to boost toll collection oversight and truck traffic efficiency.
Kazakhstan lifts ban on Russian wheat imports... Kazakhstan has lifted the ban on wheat imports from third countries and the countries of the Eurasian Economic Union (EAEU), which had been in effect until the end of 2024, Rosselkhoznadzor reported. The Russian agricultural watchdog also reported that during the negotiations the parties considered compliance with phytosanitary requirements when importing flowers, fruits and vegetables, seeds and grain from Kazakhstan to Russia.
Euronext reiterates corn mycotoxin limits after rainy French harvest... Euronext issued a notice on Thursday reiterating limits on mycotoxins in corn delivered against its futures contract. Euronext, whose corn futures are a price benchmark for the European market, said it was reminding participants that it applies maximum levels set out in European Union regulations, including a limit of eight parts per million for deoxynivalenol (DON), a common mycotoxin.
“Due to the corn quality in France this year, especially concerning the level of mycotoxins, Euronext has been receiving several questions over the past few weeks about the specifications in our corn contract,” the group added in an emailed response to Reuters.
Corn quality in France, the European Union’s biggest grain producer, has been a market concern after heavy rain hampered the fall harvest and traders cited reports of increased presence of mycotoxins.
GAO report highlights FDA’s shortcomings in food safety inspections... The Government Accountability Office (GAO) has revealed critical deficiencies in the Food and Drug Administration’s (FDA) food safety inspection efforts. Since fiscal year (FY) 2018, FDA has failed to meet mandated inspection targets for both domestic and foreign food facilities, raising serious concerns about food safety oversight.
Domestic Inspections:
- The FDA Food Safety Modernization Act (FSMA) mandates inspections every three years for high-risk facilities and every five years for non-high-risk facilities.
- In FY 2019, 7% of high-risk domestic facilities due for inspection were missed; this increased to 49% by FY 2021.
- For non-high-risk facilities, uninspected rates climbed from 38% in 2020 to nearly 74% in 2021.
Foreign Inspections:
- FSMA sets an annual target of 19,200 foreign facility inspections, but FDA averaged only 917 inspections annually from fiscal years 2018 to 2023.
- The peak was 1,727 inspections in 2019, merely 9% of the target.
Challenges and Recommendations:
- Workforce shortages are cited as a primary barrier; as of July 2024, only 432 investigators were available, 90% of the full-time capacity.
GAO recommends Congress and FDA take steps to:
- Reassess realistic foreign inspection targets.
- Expand and optimize the foreign investigator team.
- Reduce incomplete domestic inspections.
- Implement a formal performance management process.
Fed finds new reason for confidence in obscure inflation gauge... Top Federal Reserve officials — including Chair Jerome Powell — are increasingly pointing to an obscure price gauge as a reason to maintain confidence in their outlook: “market-based” inflation, Bloomberg reports. The metric excludes a range of services where data-collectors can’t directly measure prices and have to estimate them instead.
Whereas the Fed’s preferred underlying inflation gauge accelerated to 2.8% in November, the market-based measure has been more or less flat at 2.4% since May.
Fed Governor Christopher Waller, who believes inflation will continue to cool, laid out the rationale for paying attention to the alternative market-based measure in a speech Wednesday as he offered support for additional rate cuts this year.
Federal Reserve Bank of Boston President Susan Collins said a slower approach to adjusting interest rates is merited now as officials confront “considerable uncertainty” over the U.S. economic outlook. She said the economy was in a “good place,” but noted that progress on cooling inflation will likely be slower this year than previously anticipated. The specter of new economic policies under the incoming Trump administration and new Congress may also change the economy’s trajectory, though it’s still too early to estimate exactly how that will play out. The Fed’s “policy is well positioned to adjust as required to evolving conditions – holding at the current level for longer if there is little further progress on inflation, or easing sooner if the need arises,” Collins said.
Philadelphia Fed President Patrick Harker said he’s prepared to support additional rate cuts in 2025, but the timing will depend on what happens with the economy. “I still see us on a downward policy rate path. Looking at everything before me now, I am not about to walk off this path or turn around,” Harker said. But the exact speed I continue to go along this path will be fully dependent upon the incoming data.”
Federal Reserve Governor Michelle Bowman said she supported last month’s interest-rate cut as the “final step” in the central bank’s monetary policy recalibration, with rising inflation risks dictating a cautious approach ahead. “We should also refrain from prejudging the incoming administration’s future policies,” Bowman said. “Instead, we should wait for more clarity and then seek to understand the effects on economic activity, the labor market and inflation.”
The remarks were Bowman’s first since she emerged as a front runner to become the Fed’s next top banking regulator, after Michael Barr announced this week he would step down from his job as Fed vice chair of supervision by the end of next month.