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USDA’s July 25 Cold Storage Report…stated ending-June U.S. beef stocks at 410.301 million pounds, representing a monthly drop of 11.3 million pounds and an annual dip of just 1.3 million. Significantly diminished June beef production stemming from the calendar-driven loss of two workdays versus June 2023 likely played a significant role in the monthly reduction. Nevertheless, the monthly decline more than doubled the five-year average month-to-month reduction of 5.2 million pounds, thereby suggesting underlying demand for U.S. beef remained vigorous last month despite elevated prices.
June 30 U.S. pork stockpiles came in at 470.945 million pounds, marking a monthly decline of 11.5 million pounds and an annual reduction of 19.25 million. Given the five-year average drop of 16.3 million pounds during June, this latest figure implies pork demand proved relatively weak last month. Given the 4% annual reduction in pork production last month, which also reflected the loss of two workdays from June 2023, this emphasizes the weakness of customer offtake last month.
Food price outlook unchanged, though restaurant prices increased... USDA maintained its outlook for all food prices to rise 2.2% from year-ago. Food at home (grocery) costs are still expected to increase 1.0%, unchanged last month. Food away from home (restaurant) prices are likely to increase 4.3%, up 0.1 percentage point from last month’s outlook.
USDA forecasts beef prices will rise 4.4%, up from 3.9% predicted last month. Pork prices are now forecast to increase 1.0% versus USDA’s projection for a 1.1% increase last month. Poultry prices are expected to increase 0.9%, down from last month’s 1.1% projection. Egg prices are predicted to drop 0.3% in 2024, down from an expected 0.1% rise last month.
Small drought footprint for major crops... As of July 23, the Drought Monitor showed D1 (moderate) to D4 (exceptional) drought covered 20% of the U.S., with another 28% facing D0 (abnormal dryness). But the majority of that dryness/drought was outside of the major crop production areas of the central United States. USDA estimated drought covered 4% of both corn and soybean areas, 15% of spring wheat and 10% of cotton production.
U.S. Q2 GDP stronger than expected... The U.S. economy demonstrated stronger-than-anticipated growth in the second quarter, expanding at an annualized rate of 2.8% based on the initial estimate, showing significant improvement from the 1.4% growth recorded in the first quarter. This stronger performance was fueled by solid gains in consumer spending and business investment, along with inventory building as well as increased government spending.
Consumer spending, which accounts for more than two-thirds of the economy, increased at around a 2.3% rate after slowing to a 1.5% pace in the January-March quarter.
The stronger-than-expected second quarter GDP growth may influence the Fed’s monetary policy decisions. While markets have been anticipating potential interest rate cuts later in the year, the robust economic performance could potentially delay such moves if inflationary pressures persist.
House cancels votes for next week... The House has canceled its session for next week and will adjourn for the remainder of the summer, according to a leadership schedule update. Lawmakers are set to return on Sept. 9. Appropriations Committee members had previously said they planned to vote on their Agriculture/FDA and Financial Services spending bills next week. But leaders canceled those votes, planning instead to leave early for August recess. The decision casts doubt on any further votes on the House’s partisan spending bills.
Of note: Lawmakers have said they’ll rely on a stopgap funding measure to avoid an Oct. 1 shutdown and aim for a spending deal in the year-end lame-duck session, if not later. The decision reflects Republicans’ struggle to manage a narrow majority.
House Agriculture Committee Ranking Member David Scott (D-Ga.) expressed strong criticism of House Speaker Mike Johnson’s (R-La.) decision to cancel next week’s votes and start the summer recess early.
The decision to begin the summer break earlier than scheduled is seen as problematic by Scott. This early adjournment reduces the time available for the House to complete its legislative work, particularly on crucial appropriations bills and work on a new farm bill.
Scott said, “By sending the House into recess early, Speaker Johnson once again proves that his dysfunctional Republican Leadership is the biggest obstacle to passing a truly bipartisan farm bill.” He said House Ag Chairman Glenn “GT” Thompson (R-Pa.) “wanted the House to pass the farm bill in September once the appropriations process was completed. The inability to finish the appropriations process means September will be taken up trying to keep the government open and casts even more doubt on the Committee’s bill reaching the House Floor. The farm bill will be expiring again soon, and farmers are depending on us to provide an improved safety net before the year is out.”
Scott noted the “inability to finish the appropriations process” will have significant consequences for September’s legislative agenda. He predicts that much of September will be consumed by efforts to keep the government open, rather than addressing other important legislative matters.
The criticism reflects broader challenges facing the House in passing its fiscal 2025 appropriations bills.
China tightens rules on confidential information amid espionage concerns... The new rules include stricter scrutiny on international travel. Individuals with access to state secrets face intensified checks when traveling abroad. Also, the new regulations demand heightened efforts to prevent leaks of sensitive information.
· State agencies: Must create lists of state secrets and ensure personnel handling classified information are trained and approved for international travel.
· Network operators: Internet companies and network vendors must detect and address leaks, and cooperate with investigations.
Bottom line: The rules are part of Xi Jinping’s broader counterespionage campaign in response to rising geopolitical tensions with the U.S. and Western nations. This includes public warnings and high-profile espionage arrests.
GAO report highlights college student food insecurity and SNAP underutilization... A Government Accountability Office (GAO) report highlights a significant issue facing college students in the United States — food insecurity and underutilization of available nutrition assistance programs. Here are the key findings and implications from the report:
In 2020, an estimated 23% of college students, or 3.8 million individuals, experienced food insecurity. This is a substantial portion of the student population facing challenges in accessing adequate nutrition. Of these food-insecure students, the majority (2.2 million) reported very low food security, indicating multiple instances of reduced food intake or skipped meals due to financial constraints.
The Supplemental Nutrition Assistance Program (SNAP) is available to eligible low-income households to help with food expenses. However, college students face additional eligibility criteria to qualify for SNAP benefits, such as:
· Working at least 20 hours per week at a paid job
· Being a single parent
· Meeting other student-specific requirements
The GAO analysis found that fewer than two in five food-insecure students met the criteria to be potentially eligible for SNAP. More concerningly, among those who were potentially eligible, 59% did not report receiving SNAP benefits in 2020. This indicates a significant gap in benefit utilization among students who could potentially qualify for assistance.
The underutilization of SNAP benefits by eligible students is particularly concerning given the substantial federal investment in higher education. In fiscal year 2023, the federal government spent approximately $31.4 billion on Pell Grants to help over 6 million students with financial need attend college. Food insecurity can negatively affect students’ academic success, potentially undermining this significant investment in education.
The GAO report highlights several important implications:
· Awareness gap: There may be a lack of awareness among eligible students about SNAP benefits or how to access them.
· Complex eligibility criteria: The additional eligibility requirements for students may create barriers to accessing SNAP benefits.
· Potential academic impact: Food insecurity can negatively affect students’ academic performance, potentially leading to higher dropout rates and undermining the federal investment in higher education.
· Need for targeted outreach: Colleges and universities may need to increase efforts to inform students about SNAP eligibility and assist them in accessing benefits.
· Policy consideration: Policymakers may need to review the current eligibility criteria for students to ensure that those in need can access nutritional assistance.
FDA reopens comment period on petition to ban fluorinated polyethylene in food-contact products... The Food and Drug Administration (FDA) reopened the comment period for a petition submitted by the Environmental Working Group, Center for Food Safety and other organizations, which requests the prohibition of fluorinated polyethylene in food-contact products. This decision follows a publication error in the Federal Register on April 26, 2024, where the food additive petition was not made available online for public review and comment. Originally, the comment period was set to end on June 25, 2024, but it has now been extended to Sept. 23, 2024, to allow adequate time for public input.
To participate in the comment process, stakeholders can submit their comments electronically via Regulations.gov to docket number FDA-2022-N-1526 or send written submissions to the FDA’s Dockets Management Staff. The extended comment period until Sept. 23, 2024, provides an opportunity for more comprehensive public engagement and input on this important issue.