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Your Pro Farmer newsletter is now available... President-elect Donald Trump’s accelerated actions on getting top personnel announced shows he has been working on his second term for years and learned a lot from his first administration. Prepare for some transformational, market-sensitive impacts. China has prepared countermeasures to retaliate against the U.S. if Trump, who is assembling a team of China hawks, reignites a trade war. The U.S. dollar index surged to a one-year high amid a post-election rally driven by market bets on “Trumponomics” — a mix of tariffs, tax cuts and immigration crackdowns. This could complicate global trade, U.S. competitiveness and Trump’s economic plans, while impacting Fed policy. Consumer and producer prices increased in October. Economists will be monitoring the potential for “reflation,” a resurgence in price increases driven primarily by Trump’s proposed policies rather than consumer demand. Aside from all of the political and economic happenings, recent rains across the central U.S. dramatically reduced the winter wheat drought footprint, though key areas are still dealing with widespread dryness/drought. In Brazil, farmers planted a record amount of soybeans from mid-October through the first week of November. The rapid advance could have several impacts. We cover all of these items and much more in this week’s newsletter, which you can access here.
China ends export tax rebate for some commodity products, including UCO... China’s finance ministry announced it would reduce or cancel export tax rebates for a range of commodities and other products, including “chemically modified animal, plant or microbial oils and fats, effective Dec. 1.” That could slow used cooking oil (UCO) exports to the U.S. and increase demand for domestic soyoil.
China’s exports of UCO to the U.S. had reached an annual record by September.
NOPA crush posts record in October... Members of the National Oilseed Processors Association (NOPA) crushed just shy of 200 million bu. of soybeans in October, which eclipsed the previous record of 196.4 million bu. in March 2024, and topped analysts’ expectations of 196.8 million bushels. Crush rose 12.8% from September and 5.4% from year-ago. NOPA implies the full October crush of about 209.5 million bushels, which would smash the prior record set in December 2023.
Soyoil stocks increased 3 million lbs. from September to 1.069 billion lbs., the first increase in seven months.
Trump may not like this regarding CCC... A provision in the pending House farm bill would prohibit the incoming Trump administration from using USDA’s Commodity Credit Corporation (CCC) to buffer farmers from retaliatory trade tariffs. A farm policy contact says, “The House provision is meant as an offset to pay for a certain and effective safety net under the Commodity Title and Crop Insurance. While perhaps not optimal, it makes good sense absent other ‘acceptable’ offsets (most all have been shot down) sufficient to provide producers with a meaningful safety net, especially since the CCC has not really been used over the past four years for its major purpose of directly helping farmers and ranchers but has been used for other things. This contrasts with the first Trump administration which did focus CCC support toward actual producers. If not necessary as an offset, interest in CCC as an offset goes away.”
U.S. ag, food industry groups express concerns with Trump’s mass deportation plans... These groups, which rely heavily on migrant workers, worry that such actions could have severe consequences for the U.S. food system and economy.
Key concerns
· Labor shortage: The U.S. agricultural sector heavily relies on immigrant labor, with estimates suggesting that 50% to 70% of farmworkers are undocumented. Mass deportations would dramatically reduce the available workforce, potentially crippling agricultural production.
· Economic disruption: Farmers and industry advocates argue that a crackdown on undocumented immigrants could bring their businesses to a halt. The American Farm Bureau Federation has stated that “Enforcement-only immigration reform would cripple agricultural production in America.”
· Food supply disruption: There are concerns that mass deportations could “decimate our nation’s food supply and economy,” according to some politicians and advocates.
· Rising food prices: A reduction in the agricultural workforce could lead to unharvested crops and decreased food production, potentially driving up food prices for consumers.
Broader Economic Impact: The loss of millions of workers would not only affect agriculture but could disrupt the nation’s economy.
Ag industry groups recognize the crucial role that immigrant workers play in the U.S. food system. They emphasize that these workers often take on physically demanding jobs that many American-born workers are unwilling to do. The Farm Bureau has noted the difficulty in finding American workers attracted to farm jobs, which are often challenging, seasonal, and transitory.
Small farmers and urban farmers also express concern, highlighting the importance of immigrant labor in maintaining the current food system. They worry that mass deportations would make it extremely difficult to find workers willing to perform the necessary labor under often difficult conditions.
If mass deportations were to occur, industry groups foresee several potential outcomes:
· Reduced agricultural production and possible food shortages of some commodities.
· Increased reliance on food imports, making the U.S. more vulnerable to price fluctuations and international trade policies.
· Accelerated adoption of automation in agriculture, which comes with its own set of challenges and potential job losses.
· Economic instability in rural communities that heavily depend on agricultural jobs.
GAO recommends enhancements to H-2A visa program amid rapid growth... The H-2A visa program, enabling U.S. agricultural employers to hire foreign workers for temporary jobs, has expanded significantly over recent years, with a 50% increase in approved jobs and visas between fiscal years 2018 and 2023. In FY 2023 alone, nearly 310,000 H-2A visas were issued. Key states — California, Florida, Georgia, North Carolina and Washington — accounted for over half of these jobs, with most positions being for farmworkers and laborers in crop and greenhouse operations.
To improve the program, the Government Accountability Office (GAO) advises:
· Electronic processing: Department of Homeland Security should implement end-to-end electronic processing to enhance efficiency and program accountability.
· Back wage recovery: Department of Labor should explore ways to reduce the resource strain on its Wage and Hour Division to more effectively locate workers owed back pay.
Both departments agree with the recommendations. Notably, while application volumes surged by 72%, processing times have remained steady at around 27-29 days. Most H-2A workers are young, married Mexican men.
North Dakota approves Summit Carbon pipeline permit... North Dakota regulators on Friday approved Summit Carbon Solutions’ application for a permit to run a section of its carbon dioxide pipeline through the state and store the captured greenhouse gas underground. The approval is a critical step for Summit’s hopes to build the biggest carbon pipeline in the world and carry captured carbon dioxide from 57 Midwest ethanol plants to a North Dakota underground storage site.
“This makes North Dakota the second state, after Iowa, to approve a permit for the multi-state pipeline. The project is crucial for America’s energy security, restoring profitability to farmers, creating jobs in rural communities, and producing next-generation biofuels,” American Carbon Alliance CEO Tom Buis said.
Russia’s wheat export tax continues to rise... Russia’s tax on wheat exports will increase to 2,689.7 rubles ($26.88) per metric ton for the week of Nov. 20-26 up from 2,569.2 rubles ($25.68) the previous week. The export tax has more than doubled in the last six weeks and is 197% above the mid-September level. Russia’s ag ministry has reportedly asked exporters to not sell wheat below a minimum price of $250 per metric ton. The tax hikes are seen as a way to curb wheat exports.