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Your Pro Farmer newsletter is now available... There wasn’t any shortage of market-moving news and events over the past week. Donald Trump won the presidential election, while Republicans took control of the Senate and appear as if they will retain a slight advantage in the House. Trump’s return to the White House could have far-reaching impacts, both for the U.S. and world. On the economic front, the Fed cut interest rates another 25 basis points as expected. But Fed Chair Jerome Powell gave no indication of future monetary policy moves, saying policymakers “don’t think it’s a good time to be doing a lot of forward guidance,” while noting the election will have no impact on the central bank’s decisions. USDA updated its corn and soybean crop forecasts on Friday, along with making changes to its 2024-25 balance sheets. USDA’s long-term baseline projections also provided some insight into what might be in store for the following marketing year. We cover all of these items and much more in this week’s newsletter, which you can access here.
Corn, soybean crop estimates, ending stocks cut more than expected... USDA lowered its corn and soybean crop estimates more than expected, which led to a bigger-than-anticipated drop in ending stocks. Still, ending stocks for both remain abundant. When ending stocks increased marginally from last month. Global carryover projections for corn, soybeans and wheat all declined from last month. Click here to view full report details.
Trump taps Wiles as first female White House chief of staff, Lighthizer as USTR... President-elect Donald Trump has appointed senior campaign adviser Susie Wiles as his White House chief of staff, marking the first woman to hold the position. Wiles, a key figure in Trump’s 2016, 2020 and 2024 campaigns, is credited with professionalizing his latest campaign. Despite her limited experience in Washington, Wiles, a veteran of Florida politics, will oversee White House operations and serve as a liaison with Congress and federal agencies. Trump praised Wiles for her strategic acumen and dedication, as she steps into a role historically marked by turbulence during Trump’s first term.
Robert Lighthizer, a firm believer in tariffs, has reportedly been asked to return as U.S. Trade Representative in President-elect Donald Trump’s second administration.
Trump is taking action to get his top team, including his Cabinet choices, announced far sooner than he did in his first term. A GOP-led Senate will most likely accelerate approval of Trump’s Cabinet choices.
Election analysts predict the GOP will end up with between 218 and 221 House seats when all of the races are finalized. Absences, illnesses or unexpected resignations could tip the balance of power. A slim margin will make Trump’s team cautious about tapping House members for administration positions. That lowers already low odds that Rep. Thomas Massey (R-Ky.) could be USDA Secretary.
Trump conducting his own transition... As the president-elect, Trump now has a 75-day transition period to prepare for taking office on Jan. 20, 2025. The transition process is a crucial part of the transfer of power in the United States government. Here are some key aspects of Trump’s transition:
Staffing the administration. Trump’s team is tasked with filling approximately 4,000 government positions with political appointees. This includes:
· High-level roles such as Cabinet secretaries
· Heads of various government agencies
· Part-time board and commission members
About 1,200 of these appointments will require Senate confirmation, which is expected to be easier now that Republicans control the Senate.
Trump’s transition is being managed by a group of close allies and family members, including:
· Robert Kennedy Jr., who has been tasked with “making America healthy again”
· Tulsi Gabbard
· Donald Trump Jr. and Eric Trump
· JD Vance, Trump’s running mate
· Howard Lutnick, CEO of Cantor Fitzgerald (co-chair)
· Linda McMahon, former head of the Small Business Administration (co-chair)
Differences from 2016. Trump’s team is emphasizing that this transition will be “as different as possible” from his 2016 effort. Key differences include:
· Prioritizing loyalty in appointments
· Selecting individuals more aligned with Trump’s ideological and professional style
· Avoiding the initial confusion that occurred in 2016 when Chris Christie was dismissed as transition leader
New transition guidelines. Due to issues that arose during the 2020 transition, new rules have been implemented: The Presidential Transition Improvement Act of 2022 mandates that the transition process begin five days after the election, even if the winner is disputed. This ensures that the General Services Administration’s (GSA) “affirmative ascertainment” is no longer needed for transition support services to begin.
Bottom line: As Trump prepares to return to the White House, his transition team is working to establish a new administration that will differ significantly from both his first term and the outgoing Biden administration.
Impact of Trump’s trade policy plan... Trump’s plan to impose a universal 10% to 20% tariff on imports and a 60% tariff on goods from China will raise prices on foreign-made products for American consumers. Pantheon Macroeconomics’ Samuel Tombs estimates that a 10% tariff would lift personal consumption expenditures by 0.8 percentage point, mostly in the first year.
Meanwhile, Bloomberg released an assessment of Trump’s likely trade policy, saying it has raised concerns about agricultural trade disruptions and their impact on food prices. Key topics:
· Potential Chinese response. Bloomberg Economics suggests Beijing’s retaliation might mirror its previous actions, targeting agricultural and energy exports from Republican-leaning states. Soybeans and other commodities are likely to be primary targets if China decides to restrict U.S. imports again.
· Shifting trade dynamics. Since Trump’s first term, Brazil has strengthened its position as China’s top soybean supplier and has become the largest source of corn imports. This shift has reduced U.S. market share in China, with U.S. soybean imports to China falling from over 40% in 2016 to less than 18% in the first nine months of this year.
· U.S. farmer support. Despite the initial negative impact of Trump’s trade policies on U.S. agricultural exports, many farmers continue to support him. This support is partly due to the $28 billion in aid provided to farmers during previous trade disputes and a desire for change in the face of a weakening farm economy.
· Potential beneficiaries. In the event of a major U.S./China trade dispute, South American suppliers, particularly in the beef sector, could benefit according to executives at Brazil’s Minerva.
· Short-term outlook. Despite concerns about future trade relations, Bloomberg says China will likely need to secure soybean supplies from the U.S. before Brazil’s harvest begins early next year.
· Food prices and inflation. Trump’s approach to food prices focuses on using import tariffs to lower costs. However, his proposed mass deportation of undocumented immigrants could have significant implications for the U.S. food system, according to the Bloomberg assessment. The potential deportation of 1.7 million undocumented workers who contribute to the U.S. food system could lead to increased grocery prices due to labor shortages in the agricultural sector.