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Sen. John Thune (R-S.D.) wins Majority Leader race… Sen. Rick Scott (R-Fla.) was eliminated on the first ballot. And Thune beat Sen. John Cornyn (R-Tex.) 29-24 on the second ballot. The Thune selection is good for the U.S. ag sector. He has one of the best staff in Congress.
The leadership race unfolded in two rounds of voting:
• In the first ballot, Scott was eliminated.
• In the second and final ballot, Thune secured 29 votes, defeating Cornyn, who received 24 votes.
Donald Trump stayed out of the contest but did make public demands that the incoming majority leader allow him to make recess appointments to his Cabinet. All three men quickly agreed.
Thune’s election as Majority Leader is considered beneficial for the U.S. ag sector for several reasons:
• Agricultural background: Thune has a deep background in ag policy and is a member of the Senate Agriculture Committee.
• Farm bill experience: He has been involved in writing several farm bills, demonstrating his expertise in agricultural legislation.
• Conservation programs: Thune is an avid supporter of conservation title programs like the Conservation Stewardship Program and Conservation Reserve Program.
• Bipartisan approach: He is a skilled negotiator, working for the benefit of all.
• Constituency focus: Coming from South Dakota, an agriculture-based state, Thune is likely to keep agricultural interests at the forefront of his agenda.
• Experienced staff: Thune has one of the best staffs in Congress, which can be crucial for effective policymaking and implementation.
Of note: This leadership change marks the end of Mitch McConnell’s (R-Ky.) 18-year tenure as the Senate’s Republican leader. Thune will assume the role of Majority Leader for the next two years, coinciding with President-elect Donald Trump’s second term. While Thune has had differences with Trump in the past, he has recently worked to improve their relationship and has pledged to advance Trump’s legislative agenda.
Landus CEO: Trump’s mass-deportation plan to hurt ag sector... President-Elect Donald Trump’s threat of mass deportations risks hurting the domestic agriculture sector already struggling with labor shortages, Landus CEO Matt Carstens said during an interview on Bloomberg Television’s “Balance of Power.” He said farming would be one of the biggest U.S. sectors hit should the incoming administration move forward with kicking potentially millions of undocumented immigrants out of the country. The impact could be especially acute in areas like California, which abounds in specialty crops like fruits, nuts and vegetables, though the grain and soybean-dominated Midwest also could be at risk. The farm sector remains a human-intensive business, he noted.
CBO updates analysis of House farm bill... The Congressional Budget Office (CBO) adjusted its cost projections for the farm bill passed by the House Ag Committee, reducing the bill’s projected cost by $8 billion from previous estimates. The updated figures show the bill would exceed the baseline by $25.2 billion from 2025 to 2033, down $7.8 billion compared to earlier estimates, with another $2.9 billion increase expected for 2034. The overall cost for 2025-2034 is estimated at $28.1 billion above the baseline.
Spending under the commodity title is projected to be $32.1 billion over baseline for 2025-2033, which represents an $11.3-billion reduction compared to earlier estimates. There is also a $4.9 billion increase for 2034.
CBO revised its savings estimate from changes to the USDA’s Commodity Credit Corporation (CCC) authority, predicting $5.4 billion in savings for 2025-2034, up from the prior estimate of $3.6 billion for 2024-2033. This falls short of savings expectations from House Ag Republicans.
Nutrition program spending is projected to rise $8.9 billion above the baseline, representing a $1.2- billion reduction from previous estimates, with an additional $1.2 billion in spending for 2034.
Outlook. The bill’s prospects during the lame-duck session remain uncertain, with attention focused on Senate Ag Committee Chair Debbie Stabenow’s (D-Mich.) decision on moving forward with a new bill. A statement from her is expected soon.
EPA sends RFS volume adjustment rule to OMB.... EPA has submitted a proposed rule titled the Renewable Fuel Standard (RFS) Volume Adjustment Rule to the Office of Management and Budget (OMB). This rule is separate from the agency’s previously indicated plans for the 2026 RFS, which is expected to be proposed in March 2025 and finalized by December 2025. By law, the 2026 RFS level was due to be finalized in October 2024. The proposed rule also carries a different Regulatory Identification Number (RIN) than the 2026 Renewable Volume Obligations (RVO) plans.
The Illinois Farm Bureau (IFB) is no longer a member of the American Farm Bureau Federation (AFBF)… The American Farm Bureau Federation has decided to terminate the Illinois Farm Bureau’s membership, effective Dec. 20, 2024. AFBF President Zippy Duvall announced the termination, which is expected to have a significant impact on farmers in Illinois.
A letter from AFBF President Zippy Duvall to state farm bureau presidents said the action comes after a failed mediation session on Monday. The move is in retaliation for a decision by the Illinois Farm Bureau’s affiliate, Country Financial, to drop a Farm Bureau membership eligibility requirement for non-farm insurance policy holders in Illinois. “The membership decision is expected to cause the loss of hundreds of thousands of farm bureau members, to the detriment of Illinois Farmers, Illinois County Farm Bureau organizations, IFB [Illinois Farm Bureau] and the entire Farm Bureau organization,” wrote Duvall, a third-generation dairy farmer from Georgia who has headed the AFBF since 2016. Country Financial told customers in September it would no longer require Farm Bureau membership for nonfarm policies. Membership costs about $20 per year. AFBF receives $5 of those dues. Country Financial operates in 19 states. It is the largest farm insurer in Illinois.
The expulsion of the Illinois Farm Bureau from the national federation marks a significant change in the relationship between these agricultural organizations. The IFB has about 400,000 members. More than 70,000 are farmers, farmland owners, and agriculture industry professionals, according to the IFB website. Its farm membership comprises about 75% of all Illinois farmers. The IFB has been operating for over 100 years. It will no longer be part of the larger national network. This separation could potentially affect various aspects of support and representation for Illinois farmers, including:
• Legislative advocacy at the federal level
• Access to national resources and programs
• Participation in national policymaking for agriculture
Of note: While the Illinois Farm Bureau will no longer be part of the American Farm Bureau Federation, it will continue to operate as a state-level organization.
U.S. consumer inflation rises to 2.6% in October... The U.S. annual inflation rate increased to 2.6% in October, up from 2.4% in September, marking the first rise in seven months. Energy costs declined at a slower pace, primarily due to less steep drops in gasoline and fuel oil, while natural gas prices rose 2%. Shelter inflation remained at 4.9%, while food and transportation inflation eased. Core inflation, minus food and energy costs, held steady at 3.3%.
Food inflation increased 2.1% from year-ago, with grocery prices up 1.1% and restaurant prices up 3.8%.
Economists looking for signs of ‘reflation’... Economists are monitoring the potential for “reflation,” a resurgence in price increases driven primarily by Trump’s proposed policies rather than consumer demand. Bank of America economists Stephen Juneau and Jeseo Park highlighted pro-growth fiscal measures, tariffs and stricter immigration as possible sources of inflation risk if enacted.
Meanwhile, Fed Chair Jerome Powell indicated the central bank will not adjust its economic models until Trump’s initiatives are officially enacted, suggesting the Fed may temporarily pause its rate cuts.
Dairy farmers to vote on milk pricing reforms... USDA announced dairy farmers will soon vote on milk marketing reforms aimed at raising the price for fresh milk consumed at the table. Following a 60-day comment period, the Agricultural Marketing Service cleared the proposal for a farmer referendum, which requires a two-thirds majority for approval. Ballots will be mailed to producers and cooperatives, with votes due by Jan. 15, 2025.
The proposal could increase revenues by $800 million annually for producers by altering the pricing formula for Class I milk used in grocery stores. Other changes include adjustments to protein content in Class III and IV milk, modifications to cheese pricing calculations and location-specific pricing differentials.
Public webinars will detail the amendments and voting process later this month.
Ontario premier calls for U.S./Canada trade deal if Mexico fails to align on Chinese tariffs... Ontario Premier Doug Ford has called for Canada to negotiate a bilateral trade agreement with the U.S. unless Mexico aligns with North American partners on tariffs for Chinese imports. Ford stated that Mexico should match U.S. and Canadian tariffs on Chinese goods or risk exclusion from a trade partnership with the U.S., which he described as “the largest economy in the world.” Ford characterized Mexico as a “backdoor” for Chinese imports into North America, urging a stronger bilateral focus on U.S./Canada economic ties.
Ford’s comments come in the context of anticipated changes to trade policy as Donald Trump prepares to return to the White House, with his promises to introduce new tariffs and reopen the North American trade agreement. Ontario, a major hub for Canada’s auto industry, is closely tied to U.S. manufacturing and stands to be heavily affected by shifts in trade policy.
In response, Canadian Prime Minister Justin Trudeau has indicated Canada’s willingness to cooperate with the U.S. and Mexico to address concerns around Chinese trade practices. Trudeau warned of the impact of potential tariffs on Canadian and U.S. workers. He emphasized a unified approach among North American partners to safeguard jobs.
Mexico asserts that it has already taken steps to address Chinese imports, such as tariffs on steel products. Mexican officials have been working to reduce trade imbalances with China and deny claims that Chinese cars are being exported from Mexico to the U.S.
Of note: Ontario is the top trading partner for 17 U.S. states.