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Winter wheat conditions improve notably…USDA rated the winter wheat crop as 55% “good” to “excellent” as of Sunday, up six percentage points from last week. Analysts expected a two point increase. The “poor” to “very poor” rating declined three points to 12%.
The winter wheat crop was 97% planted (98% average) and 89% emerged (89%).
Cotton harvest advanced…to 84% complete as of Nov. 24, up from 77% last week and still four points ahead of the five-year average. Harvest stood at 80% in Texas (73% average) and 77% in Georgia (78%).
USDA’s Cold Storage Report…For October, total red meat supplies in freezers were down 2 percent from the previous month and down 3 percent from last year. Total pounds of beef in freezers rose 19.4 million lbs. (5%) from September to 432 million lbs.. The five-year average is 15.5-million-lb. increase during the month. Beef stocks declined 13.8 million lbs (3%). from year-ago.
Pork inventories totaled 426 million lbs. were down 32.4 million lbs. (7%) from September. The five-year average is 16.8-million-lb. decline in pork stocks during the month. Pork stocks declined 11.9 million lbs. (3%) from last year.
What traders and analysts say about the U.S./Mexico cattle trade issue regarding New World Screwworm/NWS)...How long will cattle trade from Mexico to the United States be halted? This is the key question on everyone’s mind. It is worth noting that some groups who are dependent on buying Mexican feeder cattle have cautioned that limiting trade could result in retaliatory measures from Mexico buying U.S. beef. If this disease is a legitimate threat (which most think it is), it would not seem that any retaliation from Mexico would be appropriate. But some U.S. feedlot groups are attempting to use that argument as leverage to re-open the border.
The second key question is if they can identify the location of the cattle, believed to be in the south…has there been integration of southern cattle to the north? The NWS was found in a cow in the southern Mexico state of Chiapas, at an inspection checkpoint close to the border with Guatemala.
- How quickly is it anticipated the NWS will spread? And what is the confidence USDA is able to detect it?
- Does Mexico have the resources to control and stop the spread of NWS?
- Are there enough sterile flies, etc?
- What would the impact be to the U.S. cattle/beef industry if it was found in the U.S.?
- Are the testing protocols that APHIS might implement at the border going to:
1. Be effective?2. Be worth the cost?
Market impacts: This trade stoppages comes as there are signs of retention in the U.S. cattle herd. Market impact will be first on Dec placements with around 150K-200K that could have crossed the border. Some of the retention could also have been coming from heifers brought in from Mexico, another door that is closed.
USDA raises 2025 food price outlook... USDA forecasts all food costs next year will rise 2.5%, up from a projected 2.4% increase last month and 2.3% this year. Food-at-home (grocery) prices are expected to rise 1.6% in 2025 (1.2% this year) and food-away-from-home (restaurant) costs are forecast to increase 3.1% (4.1% this year).
Beef prices are projected to rise 0.7% next year, down sharply from an expected 4.9% jump this year. Pork is forecast to increase 1.0% next year, down from a 1.5% increase this year.
Bessent brings stability to trump’s economic team... Markets are optimistic about Scott Bessent’s appointment as Treasury Secretary, viewing his Wall Street experience as a stabilizing force amid Trump’s unpredictable economic agenda. Bessent is expected to temper Trump’s campaign rhetoric, advocating for measured trade policies, deficit reduction and economic growth through deregulation and energy strategies.
In an interview with the Wall Street Journal, Bessent said his priority will be to enact Trump’s tax cuts, while also introducing tariffs and cutting spending. “Maintaining the status of the dollar as the world’s reserve currency” will also be a focus. While markets see him as a fiscal hawk focused on maintaining the dollar’s reserve currency status, Bessent faces challenges aligning Trump’s unconventional views with market expectations. His ability to balance these dynamics will be crucial in sustaining confidence.
Leadership shake-up looms on House Ag Committee ranking position... House Ag Committee Democrats are signaling openness to new leadership as Rep. Jim Costa (D-Calif.) mounts a challenge against current ranking member Rep. David Scott (D-Ga.), whose ability to lead a new farm bill has been questioned as concerns mount about his health. Meanwhile, reports surfaced last week that Rep. Angie Craig (D-Minn.) is also weighing a bid, alongside potential contenders like Rep. Jahana Hayes (D-Conn.). Costa’s move may pave the way for change, as lawmakers navigate the sensitive task of replacing Scott, the first Black congressional agriculture chair.
SNAP executive order could make it easier to pass new farm bill... President-elect Donal Trump may use executive orders to modify SNAP program, making it easier to ink a new farm bill next year. Trump has previously utilized executive orders to influence federal assistance programs, including the Supplemental Nutrition Assistance Program (SNAP). His administration emphasized state flexibility, which could allow states to implement specific measures without needing congressional approval.
Trump’s approach to SNAP and other welfare programs has been characterized by a push for stricter work requirements and greater state control. In 2018, he signed an executive order titled Reducing Poverty in America by Promoting Opportunity and Economic Mobility, which directed federal agencies to review and propose stronger work requirements for beneficiaries of means-tested assistance programs, including SNAP. This order mandated that all cabinet departments develop plans to impose work requirements on able-bodied recipients of federal aid, thereby increasing the administrative burden on states to comply with these new regulations.
An executive order could allow states to have more discretion in how they administer welfare programs. This flexibility could enable states to create pilot programs or modify existing SNAP rules without waiting for congressional legislation. For instance, states could decide whether to implement stricter work requirements or other measures aimed at reducing dependency on federal assistance. This aligns with Trump’s broader goal of promoting self-sufficiency among welfare recipients.
Under Trump’s first administration, USDA proposed changes that would tighten eligibility criteria for SNAP, including limiting waivers that allowed states to exempt certain populations from work requirements. These changes were intended to encourage employment among able-bodied adults without dependents.
The potential impact of such executive orders is significant:
- Increased work requirements: States could be compelled to enforce stricter work requirements for SNAP beneficiaries.
- Pilot programs: States may initiate pilot programs that test new approaches to welfare administration, potentially leading to broader reforms.
- Administrative burden: States might face increased pressure to demonstrate compliance with federal guidelines while managing their welfare programs.
Bottom line: Trump’s ability to bypass Congress through executive orders provides him with a powerful tool to reshape SNAP and other welfare programs. By emphasizing state flexibility, he could effectively allow states to experiment with different approaches to welfare administration, potentially leading to significant changes in how assistance is provided at the local level, government aid and promoting personal responsibility among beneficiaries.
Trump transition targets expansive energy reforms... Donald Trump’s transition team is crafting an ambitious energy agenda to be launched shortly after his inauguration, according to Reuters. The plan includes:
- Approving export permits for new LNG projects.
- Expanding oil drilling on federal lands and off U.S. coasts.
- Repealing climate-related policies such as EV tax credits and clean power plant standards.
Key priorities involve lifting President Biden’s freeze on LNG export permits, streamlining drilling approvals and revamping coastal drilling leases to offer more sales.
Canada’s strategy for U.S. trade negotiations, potentially excluding Mexico... Canadian Prime Minister Justin Trudeau has indicated a willingness to negotiate a trade agreement directly with the incoming Trump administration, potentially sidelining Mexico, the Wall Street Journal reported. As preparations intensify for the upcoming review of the U.S.-Mexico-Canada Agreement (USMCA) scheduled for next year, Trudeau and other Canadian officials have expressed concerns about Mexico’s role as a conduit for Chinese goods into North America, which could undermine trade interests in both Canada and the United States. Trudeau mentioned these issues in discussions with Mexican President Claudia Sheinbaum during the G-20 summit in Brazil.
Sheinbaum has downplayed Trudeau’s remarks, labeling them as political posturing ahead of Canada’s elections next year, where Trudeau’s approval ratings have recently declined. Mexican trade officials argue there is no substantial evidence supporting claims that China is using Mexico as a loophole to export goods tariff-free to the U.S. and Canada.
Luis Rosendo Gutiérrez, Mexico’s deputy trade minister, highlighted that Chinese foreign direct investment is significantly more substantial in the U.S. and Canada compared to Mexico, countering fears of a backdoor trade route.
Trudeau’s government appears to be aligning itself with Trump’s critical stance on Chinese investments in Mexico, aiming to strengthen ties with the new administration despite past tensions. The dynamics of this relationship are crucial, especially since Canada and Mexico rely heavily on the U.S. market for their exports.
The potential shift in Canada’s approach raises concerns among critics who warn that isolating Mexico could backfire, recalling past negotiations where cooperation among all three countries proved essential. As negotiations for the USMCA review approach, Mexican officials are advocating for a framework that addresses Chinese imports within North America.
Trudeau’s administration has already taken steps to align its policies with those of the U.S., including implementing tariffs on Chinese-made products. The auto industry remains a focal point in these discussions, given its intricate supply chain across the three nations.
Mexico bets big on trade with port expansion... Mexico is making a strategic push to boost its role in global trade with a significant expansion of the Port of Manzanillo, Bloomberg reports. Aiming to more than double its capacity, the Pacific coast port seeks to rank among the world’s top 20 container ports. The move reflects Mexico’s confidence in global trade growth, even amid U.S. tariff threats and concerns over trade ties with China.
President Claudia Sheinbaum has defended the strategy, emphasizing plans to reduce reliance on Chinese imports by promoting local manufacturing. Meanwhile, automaker Stellantis signaled readiness to adjust investments in Mexico should Trump impose new industry tariffs.
This development is part of a broader geopolitical narrative as countries brace for potential shifts in U.S. trade policy under Trump. Other global reactions include China strengthening ties in North Africa, Ireland prepping for economic shocks and concerns in Iran, the EU and beyond over renewed U.S. protectionism.