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Your Pro Farmer newsletter is now available... High winds and heavy rains ripped through portions of the central Corn Belt last week, though damage didn’t appear nearly as severe as the 2020 derecho. Otherwise, weather remains relatively favorable for a good portion of U.S. corn and soybean areas. Given strong yield and production outlooks, funds remain comfortable holding record net short positions in the corn and soybean markets. The extended weather forecast suggests the second half of the growing season will be warmer-than-normal with varied rainfall, though drought is not expected to develop. On the political front, an assassination attempt on former President Donald Trump failed just ahead of the Republican National Convention. Trump tabbed Ohio Senator JD Vance as his running mate for the November elections. Our page 4 feature this week takes a look at the Trump/Vance team’s stance on key issues for agriculture, trade and biofuels. We cover all of these items and much more in this week’s newsletter, which you can access here.
Cattle on Feed Report: Placements decline more than expected... USDA estimated the number of cattle in large feedlots (1,000-plus head) as of July 1 at 11.304 million head, up 61,000 head (0.5%) from year-ago, though 23,000 head less than the average pre-report estimate implied. June placements declined 6.8%, while marketings dropped 8.7% – both falling more than anticipated – especially placements.
| Cattle on Feed Report | USDA (% of year-ago) | Average Estimate (% of year-ago) |
On Feed on July 1 | 100.5 | 101.1 |
Placements in June | 93.2 | 97.2 |
Marketings in June | 91.3 | 91.7 |
Placements declined in each of the weight categories aside from 9-weights, which were steady with year-ago. Placements dropped 6.4% for lightweights (under 600 lbs.), 7.3% for 6-weights, 7.9% for 7-weights, 5.4% for 8-weights and 10.8% for heavyweights (1,000-plus lbs.) Of the 115,000-head decline in total placements, 90,000 head was in Kansas, 10,000 head in Nebraska, 5,000 head in Texas and 25,000 head in “other states,” while Colorado placed 15,000 head more cattle into feedlots than June 2023.
As of July 1, the feedlot inventory consisted of 6.824 million head of steers (up 0.8% from last year) and 4.480 million head of heifers (up 0.1%).
The data is relatively neutral, though the placements number may attract some buying in deferred live cattle futures on Monday.
Two Trumps: Unifying at first, same rhetoric to close... Former President Donald Trump’s acceptance speech at the Republican National Convention was unifying to begin, as he recounted the harrowing attempt on his life on July 13. But he then reverted to his familiar attacks on others, giving Democrats an opening that could soon become a wide-open campaign if President Joe Biden pulls out as the Democratic nominee.
GOP convention issues important to the ag sector
Trade: Trump continues to push a 10% tariff on importers and a 60% hike on China. Vance is in sync with Trump’s protectionist bent. Vance criticized Biden for supporting NAFTA, calling it a “bad trade deal that sent countless good jobs to Mexico.” (NAFTA passed with Republican votes as well.) He attributed job losses in Ohio and across the nation to Biden’s backing of NAFTA. Farmers are worried about a trade war and wonder if any Trump administration would return to trade war payments for the ag sector.
China: Both Trump and Vance criticized China, including its entry into the World Trade Organization in 2001, linking it to job losses and economic challenges in the United States. Comments from Trump and Vance imply a more confrontational approach to U.S./China relations. Vance emphasized the need to “stop the Chinese Communist Party from building their middle class on the backs of American citizens,” suggesting a tougher stance on trade with China. That is similar to the view of former U.S. Trade Representative Bob Lighthizer, who would likely return to any new Trump team.
Energy: Trump again stressed his support for crude oil and exports of U.S. energy products. He railed against Biden’s subsidies for electric vehicles. Vance said Biden’s clean energy agenda is harming Americans. Trump and Vance mocked the administration’s energy and climate goals as a “Green New Scam.” Vance said: “It’s about the energy worker in Pennsylvania and Ohio who doesn’t understand why Joe Biden is willing to buy energy from tinpot dictators across the world, when he could buy it from his own citizens right here in our own country… We’re done buying energy from countries that hate us; we’re going to get it right here, from American workers in Pennsylvania and Ohio and across the country.”
Farmers want to know how any new Trump administration would deal with biofuels, particularly ethanol, biodiesel, renewable diesel and sustainable aviation fuel. A key concern is whether Trump and his team will back away from biofuel incentives. We await comments from Trump on this topic, but our sources say he will take direction from key farm-state lawmakers, including Iowa Sens. Chuck Grassley and Joni Ernst.
Tax policy: Trump favors a still-lower corporate tax rate of 15% from the current 21%. But that will face opposition from even tax-cut friendly Republicans in Congress. Most of the Trump 2017 tax cuts expire at the end of 2025. The fate of those and other tax issues depends on who wins the White House and controls Congress.
Regulations: Trump calls regulations unfunded tax mandates and opposes many of them. As in his first term, he would insist that any new regulation be offset by getting rid of several existing ones. A Trump EPA would definitely be different from Biden’s, including what many farmers think are too stringent regs on pesticides and other inputs.
Farm policy: Congress decides this topic, but also important would be who Trump picks as USDA secretary. It could be a more populist selection who may worry mainstream ag. A Trump-led USDA would move back toward production agriculture and not the equity approach of current USDA Secretary Tom Vilsack, who favors small- to medium-sized producers and underserved communities. As for a new farm bill, if Trump wins, Republicans will want to clear up any lingering issues, so a new White House and Congress can focus on new issues — why action in a lame-duck session of Congress can’t be ruled out.
Colombia bans Oklahoma beef after H5N1 detection... Colombia has banned beef imports from Oklahoma following the confirmation of the H5N1 virus in two dairy herds in the state on July 11. This addition raises the total number of U.S. states from which Colombia has halted beef imports to 13. USDA’s Animal and Plant Health Inspection Service reports that 164 herds across these 13 states have been confirmed with H5N1 in dairy herds.
USDA announces CIG projects... USDA announced 53 new Conservation Innovation Grants (CIG) projects, amounting to $90 million, aimed at advancing natural resource conservation on private lands to combat climate change. A significant focus is on innovative methods to reduce livestock emissions, particularly enteric methane. The funding is divided into $69.7 million for on-farm trials and over $20.2 million for CIG classic projects.
The classic projects aim to enhance current technologies, including virtual fences for livestock, beef emissions tracing systems and tools for fertilizer and phosphorus management. The on-farm trials, which receive larger grants, target broader issues such as methane emissions management, feed rations, grasslands beef, water conservation, irrigation and energy conservation.