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Your Pro Farmer newsletter is now available... Corn and soybean harvest continues to advance at a rapid clip given ongoing hot and dry conditions, which is putting pressure on those markets. But there are increased signs prices have dropped far enough to encourage active global end-user demand. The extended weather forecast from the U.S. Climate Prediction Center calls for warm, dry conditions across much of U.S. winter wheat areas through January, as a weak La Nina event is expected to develop. As a result, drought is expected to develop or persist over most HRW areas and across southern SRW locations through January, while it is expected to improve or be removed over most northern SRW areas. On the global front, China is trying to shore up its ailing economy with stimulus measures, though the plan is lacking specific details, which is discouraging to inventors. Our News page 4 feature this week looks at the diverging opinions between farmers and economists on whether Kamala Harris or Donald Trump would be better for agriculture. Trade, immigration and inflation will be key ag factors for the November elections. We cover all of these items and much more in this week’s newsletter, which you can access here.
Farmers, lawmakers focusing on disaster relief, economic aid and farm bill completion... Odds are improving for several farmer support programs.
Farmers are currently focusing on three major priorities:
1. Disaster relief for 2023 and 2024 losses, exacerbated by severe hurricanes in the Southeast.
2. Economic assistance for the 2024 crop year.
3. Completion of a new farm bill to provide greater certainty for the future.
The second priority is gaining momentum with the introduction of the “FARM Act” by Rep. Trent Kelly (R-Miss). The Farmer Assistance and Revenue Mitigation Act (FARM Act) aims to provide emergency assistance to producers of eligible commodities for the 2024 crop year. Key features include:
· Eligibility: Crops such as barley, corn, cotton, dry peas, grain sorghum, lentils, chickpeas, oats, peanuts, rice, soybeans, other oilseeds and wheat.
· Payment formula: (Projected Cost - Projected Returns) x Eligible Acres x 60% = Total Payment.
Administrative Provisions:
· Payment limitations based on income derived from farming, ranching, or forestry.
· $175,000 limit for those deriving less than 75% of income from these activities.
· $350,000 limit for those deriving 75% or more of income from these activities.
The FARM Act has garnered endorsements from various agricultural organizations, including the American Farm Bureau Federation and National Cotton Council. Rep. Kelly is currently seeking cosponsors for the measure, with a deadline of 9 a.m. ET, Friday, Oct. 25, for original co-sponsorship.
Lawmakers are also considering an ad hoc relief package for 2023 and 2024 production losses, aiming to improve upon the implementation of the Emergency Relief Program (ERP) for 2022. As for a new farm bill, despite challenges, there is still opportunity to pass a five-year omnibus bill that strengthens the farm safety net, particularly under the commodity title and crop insurance.
Big jump in Russian wheat export tax... Russia’s tax on wheat exports jumped to 2,121.2 rubles ($22) per metric ton for the week of Oct. 23-29, up from 1,872.0 rubles ($19.44) the previous week. The export tax has surged 59.7% the last two weeks and is 131% 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.
Russian grain exporters to sell directly to sovereign buyers... Russian grain exporters will sell directly to sovereign buyers, while non-Russian winners of international tenders will receive Russian grain only if they have long-term off-take agreements with Russian firms, the Grain Exporters Union said. The decision will apply to deals concluded after Oct. 11. Deals concluded before that date will be executed on agreed terms. The union said this will affect 13 countries, including Egypt, and other major buyers of Russian wheat such as Saudi Arabia, India, Iraq, Algeria and Morocco.
The union, which says it represents companies that export 80% of Russian grain, had earlier accused unspecified exporters of shipping excessive volumes at low prices.
USDA: Tainted meat recall affects schools but not lunch program... USDA released a preliminary list of around 200 schools impacted by BrucePac’s recall of nearly 12 million pounds of ready-to-eat meat and poultry products due to potential Listeria contamination. However, USDA’s Food Safety and Inspection Service (FSIS) clarified that the affected products were not distributed through the National School Lunch or Breakfast Programs. FSIS will continue updating the list of involved schools and retail products as more information becomes available.
Report: Trump’s tariff plan would hit Midwest and South the hardest... A new analysis by the Tax Policy Center reveals that Donald Trump’s proposed tariffs would disproportionately impact states in the Midwest and South, including Kentucky, Indiana, Tennessee, Mississippi and Michigan. These states, where Trump either leads or aims to regain ground lost in 2020, would feel the most economic pressure from a potential 60% tariff on Chinese goods and a 10% across-the-board duty. Trump has defended his tariff policy, calling tariffs “the most beautiful word in the dictionary,” though his exact plans remain unclear. Treasury Secretary Janet Yellen criticized the approach, warning that broad tariffs would raise consumer prices and hurt U.S. businesses’ competitiveness.
Canada pushes mediation to resolve Port of Montreal labor deadlock... Canada’s Labor Minister Steven MacKinnon is urging dockworkers and employers at the Port of Montreal to agree to mediation to end disruptions that have slowed shipments. MacKinnon set a Friday deadline for both sides to accept the offer, with a commitment to no strikes or lockouts during negotiations. Recent labor actions, including a three-day strike and overtime refusals, have prompted shippers to reroute cargo through Vancouver and Halifax. A spokeswoman for the Canadian Union of Public Employees local 375, which represents about 1,150 dockworkers at the Canadian port, said officials were still deliberating whether to accept the mediation offer. Dockworkers since last Thursday have been refusing to work overtime in the meantime, she said.
Sevens Report: Soft landing likely as economic data strengthens... The Hard Landing/Soft Landing Scoreboard indicates a soft landing remains the most probable outcome for the economy, driven by stronger economic data across multiple sectors, says the Sevens Report. It says this positive outlook has supported recent highs in the S&P 500, with solid data and aggressive Fed rate cuts keeping markets stable. While the risk of a hard landing still exists, current signals suggest no immediate threat. As economic conditions improve, markets may reduce expectations of further Fed easing, shifting toward a “no landing” scenario. However, barring a significant downturn in data, the market’s rally is expected to remain intact, the report concludes.