Evening Report | November 12, 2024

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Winter wheat conditions improve as expected... USDA rated 44% of the winter wheat crop as “good” to “excellent” as of Sunday, up three percentage points from last week, as analysts expected. The “poor” to “very poor” rating declined five points to 18%.

USDA reported the winter wheat crop was 91% planted (93% average) and 76% emerged (79%).

Corn, soybean harvest nearly complete... USDA reported corn planting reached 95%, 11 points ahead of the five-year average. Soybean planting advanced to 96%, five points ahead of average. Only Colorado for corn and North Carolina for soybeans were running behind their normal pace for this time of year.

Cotton harvest nears three-quarters done... USDA reports cotton harvest advanced eight points to 71%, eight points ahead of average. Harvest stood at 65% in Texas (56% average) and 60% in Georgia (59%).

Long list of potential candidates to lead USDA... The list of potential people President-elect Donald Trump will choose from to lead USDA keeps getting longer. But there is a “short list” of candidates making the rounds, with sources very careful what they say about it. Based on our prior and current reporting, here are the potential names for USDA secretary in no specific order. (Link to an article Pro Farmer wrote with Tyne Morgan about this topic) with background on the list of USDA possibilities.)

· Kip Tom

· Charles Herbster

· Sid Miller

· Sarah Frey

· Gregg Doud

· Abel Maldonado

· Zippy Duval

· Mike Conaway

· Thomas Massie

· Ray Starling

· Ted McKinney

· Doug Burgum

· Aurelia Skipwith Giacometto

· Cindy Hyde Smith

· Glenn “GT” Thompson

Of note: The nomination of Sonny Perdue as USDA secretary did not occur until Jan. 19, 2017. On Dec. 9, 2020, multiple news sources reported President-elect Joe Biden had selected Tom Vilsack as his nominee for Secretary of Agriculture.

Trump’s agenda highlights... Trump plans swift action on key economic policies, including higher tariffs, tax cuts and immigration crackdowns. His proposed mass deportation of undocumented migrants could impact sectors, like agriculture, reliant on migrant labor. Trump aims to extend expiring 2017 tax cuts and lower corporate taxes, pending congressional approval. On trade, he seeks to impose steep tariffs, including 20% on all imports and up to 60% on Chinese goods, with few legal obstacles. His agenda may influence economic growth and inflation, though the Federal Reserve, led by Chair Jerome Powell, remains cautious on adjusting rate policies.

Congress faces a flurry of legislative, political challenges... The list of challenges Congress faces ahead of year-end includes funding the government for fiscal year 2025, the NDAA and a new farm bill. A disaster aid measure is widely expected but we are waiting on lawmakers’ reaction to a possible separate ag financial aid package like FARM Act proposed by Rep. Trent Kelly (R-Miss.). Concerns about the cost implications of that package have surfaced.

The stopgap spending goal mirrors House Speaker Mike Johnson’s (R-La.) original plan in early September that would have temporarily extended current funding levels into mid-March. That continuing resolution failed over bipartisan opposition and Congress delayed government funding to Dec. 20 instead. A March continuing resolution CR could allow Republicans to secure coveted spending cuts in long-term appropriations bills.

Of note: Punchbowl News, citing an interview with Johnson, reports he will meet with Trump Wednesday in the U.S. Capitol. Johnson then plans to travel to Mar-a-Lago Thursday; he also says he had to have discussions with Trump’s team about government funding. Majority Leader Steve Scalise (R-La.) tells Punchbowl he wants Congress to extend government funding through September 2025 and that dealing with funding early in the year would impact Trump’s legislative agenda.

Lawmakers may have to provide more money for disaster aid before the Dec. 20 deadline for Hurricanes Helene and Milton and other disasters, including in the ag sector. FEMA received about $20 billion on Oct. 1 at the start of the new fiscal year, but was down to $11 billion by Oct. 9. The agency operated under spending restrictions for most of August and all of September, prioritizing immediate needs. It ended those restrictions in October and hasn’t reinstated them.

ENSO-neutral conditions persist with mild La Niña watch... While some atmospheric factors have displayed La Niña-like signals, ENSO-neutral conditions persist, according to the Australian Bureau of Meteorology. The bureau has issued the lowest level of La Niña watch, though its model suggests sea surface temps (SSTs) are likely to remain within ENSO-neutral thresholds through February. The bureau noted of the six other climate models studied, only one suggests SSTs in the tropical Pacific are likely to exceed the La Niña threshold in the December-February period and all models forecast neutral ENSO values by March. Therefore, if a La Niña event evolves, it will likely be modest and short-lived.

NY Fed survey: Consumers more upbeat on inflation, jobs market and debt default concerns... U.S. consumers in October grew more confident about inflation continuing to ease and in the health of the job market, a survey from the Federal Reserve Bank of New York showed. Respondents also saw lower risk of defaulting on their debt for the first time in five months.

Households on average saw inflation over the next year at 2.9%, down from 3.0% in September and the lowest estimate for near-term price increases in four years, according to the New York Fed’s monthly Survey of Consumer Expectations. Inflation expectations also fell at the three-year and five-year horizons - to 2.5% and 2.8%, respectively.

The perceived probability the jobless rate would be higher a year from now fell to 34.5%, its lowest since February 2022, and consumers estimated the likelihood of losing their own job over the next 12 months at 13%, the lowest since January. Meanwhile, the estimated probability of finding a new job in the event of a job loss improved to 56%, the highest in a year, with the 3.3-point increase from September being the largest since May 2021.

The estimated probability of missing a minimum monthly debt payment in the next year fell to 13.9%, easing from its highest level since May 2020 in September. Perceptions of credit access also improved, the survey showed.