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U.S. to spend $10 million to curb H5N1 in farm workers... The U.S. Centers for Disease Control and Prevention (CDC) said it plans to spend $10 million to curb farm worker infections of H5N1 as part of its efforts to avoid further spread and mutation of the virus. CDC will allocate $5 million to organizations including the National Center for Farmworker Health to educate and train workers on protecting themselves from H5N1 and another $5 million to providing seasonal flu shots to farm workers. CDC is hoping to vaccinate all of the nation’s approximately 200,000 livestock workers during this year’s flu shot season and is working with states to develop plans to reach those workers.
USDA said it believes the virus can be stopped from spreading among dairy cows and eventually eradicate the disease.
Get ready for more U.S. pork exports to Mexico... The average price for liveweight hogs in Mexico has reached approximately 50.90 pesos per kilogram, which translates to about $1.25 per lb. liveweight. In contrast, the average price in the U.S. is significantly lower, at around 92¢ per lb. lean or 68¢ per lb. liveweight. Factors contributing to high prices in Mexico:
· Reduced hog inventory: Mexico has been experiencing a reduction in hog inventory due to months of financial losses, leading to fewer hogs available in the market. This scarcity drives up prices as demand outstrips supply.
· Inflation and cost of production: Inflation has increased the cost of groceries and feed, impacting pork prices. Despite some relief from lower feed prices, the overall cost pressures remain high.
· Shift in consumer preferences: With high beef prices due to extended droughts, consumers are increasingly substituting pork for more expensive beef cuts. This shift in demand has put additional upward pressure on pork prices.
· International trade dynamics: The price differential between the U.S. and Mexican pork markets has created a significant arbitrage opportunity. This has led to a surge in U.S. pork exports to Mexico, further tightening the supply in the Mexican market and supporting higher prices.
Given the high prices in Mexico, U.S. pork exports to Mexico are expected to remain strong. The price disparity makes U.S. pork highly attractive to Mexican importers, ensuring robust demand for U.S. pork products.
Bottom line: The unprecedented price spread between U.S. and Mexican hog prices is primarily driven by reduced hog inventory in Mexico, inflationary pressures and shifts in consumer preferences. These factors, combined with favorable international trade conditions, are expected to sustain strong U.S. pork exports to Mexico, supporting hog prices in both countries for the foreseeable future.
France’s wheat crop may be the smallest since 1980s... France’s wheat crop may only reach 26 MMT this year, a level not seen since the 1980s, as harvest results confirm a plunge in yields following months of heavy rain, producers group AGPB said. France’s ag ministry forecast the crop at 29.7 MMT earlier this month, which would be the lowest since 2020. But private crop forecasters noted that was overly optimistic.
“All the figures we are getting from the fields support the warnings we have given over the past three weeks – the harvest decline is disastrous for growers,” the AGPB said.
New top Russian grain trader... Grain Gates LLC pushed past TD Rif in 2023-24 as the top exporter of Russian gains, shipping 14 MMT, according to data from analysts ProZerno. TD Rif, which changed its name to Rodnie Polya in April, had held the top spot for nine seasons. TD Rif saw its export share tumble after its ships were blocked or delayed by the country’s agricultural watchdog.
House Republicans oppose Biden’s procurement rule... House Republicans are urging the Biden administration to withdraw a proposed rule requiring the disclosure of greenhouse gas emissions and climate-related financial risks for federal contractors. Eight Republicans on the House Natural Resources Committee argue the rule imposes significant financial burdens on contractors. They highlight that the Science Based Targets Initiative (SBTi) would validate manufacturers’ claims, costing contractors thousands in fees and potentially hundreds of thousands annually for implementing science-based targets. The proposed rule impacts the Department of Defense, General Services Administration, and NASA. While the administration is unlikely to withdraw the rule, it would likely be subject to change if Republicans win the White House in the upcoming election.
End of trucking recession in sight as freight rates rise... For the first time in nearly two years, the average cost of moving goods by truck is set to rise 0.2% annually this month, signaling a potential end to the trucking recession, according to Bloomberg. Trucking executives are optimistic, noting demand is returning to pre-pandemic levels. Knight-Swift Transportation Holdings Inc. CEO Adam Miller expects demand to build at the end of the third quarter and see seasonal activity in the fourth quarter. The Russell 3000 Trucking Index, including major companies like JB Hunt Transport Services Inc. and Old Dominion Freight Line Inc., rose 9% this month, reversing an 8% drop from the first half of the year. Retailers are working through excess inventory and placing advance orders to avoid delays due to port backlogs and strikes. This has contributed to an increase in freight demand.
Despite the positive outlook, challenges remain. Manufacturing activity is still low, consumers are struggling and there is an oversupply of trucks. The industry is in the early stages of recovery, with profits not expected to return to pandemic-era highs.
As many as 14% more truck drivers are on the road compared to March 2020, while freight volumes have only increased by 4%. Retailers are also favoring rail transport due to its lower cost.
USDA officially announces changes to ECO insurance program for 2025 crop year... Enhanced Coverage Option (ECO) is currently approved for 36 crops and RMA is expanding coverage options to almonds, apples, blueberries, grapes and walnuts for the 2025 crop year and to citrus crops where the Supplemental Coverage Option (SCO) is currently available in California and Arizona for the 2026 crop year. Premium support for all ECO-covered crops will increase to 65% to make the policy more affordable (same subsidy level available for SCO). This means the government will cover a larger portion of the premium costs, potentially making ECO more affordable for farmers. Previously, the government paid 51% of the premium for yield policies and 44% for revenue policies under ECO.
Producers purchased the ECO option on revenue policies for 11.3 million acres this year, according to RMA. In 2023, producers were paid $414 million in ECO-revenue protection indemnities and 12 million acres were enrolled in the option.
ECO provides additional area-based coverage for a portion of a producer’s crop insurance policy deductible and can be purchased as an endorsement to various crop insurance policies. It offers 90% or 95% trigger levels, where a loss becomes payable based on expected yield or revenue. Trigger is the percentage of expected yield or revenue at which a loss becomes payable. ECO coverage is unaffected by participation in USDA’s Farm Service Agency’s (FSA) Agriculture Risk Coverage program for the same crop, on the same acres. Producers may select ECO regardless of FSA farm program election.
Sinergium Biotech leads H5N1 vaccine project... Argentina-based Sinergium Biotech will spearhead a project to accelerate the development of a human vaccine against the H5N1 virus, said the World Health Organization (WHO) and the Medicines Patent Pool. The initiative aims to enhance pandemic preparedness, particularly in low- and middle-income nations, by fostering pharmaceutical development and production capabilities. Sinergium Biotech has developed candidate H5N1 vaccines. Upon establishing proof-of-concept, the technology, materials and expertise will be transferred to manufacturing partners. In early July, the U.S. Department of Health and Human Services awarded Moderna a $176 million contract for developing an mRNA-based H5N1 vaccine.