Evening Report | October 23, 2024

Top stories for Oct. 23, 2024

Pro Farmer's Evening Report
Pro Farmer’s Evening Report
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Livestock producers: Extend corn coverage... Corn futures are signaling a technical short-term bottom is in place and global end-users are indicating current prices are a value buy. We advise livestock producers to extend corn-for-feed coverage another month in the cash market through November.

Argentine rains a game-changer for crops... Strong rains this week in Argentina have given a huge boost to the farming sector after a tough period of drought, “turning the game around” for crops farmers, the Rosario Grain Exchange said. The exchange said 30 to 90 millimeters (1.2 to 3.5 inches) of rain fell in the last 24 hours across much of the agricultural core region of Argentina.

For 2024-25 wheat, the rains arrived at a “crucial” time in the last weeks of yield development, the exchange said. In the case of corn, the rains will allow farmers to resume plantings delayed by drought, while soybean planting would be able to get going “with greater intensity in the coming weeks” now that conditions had improved.

Argentine court deals setback to takeover of Vicentin... An Argentine court ruled that an agreement between soymeal giant Vicentin and its creditors is unconstitutional, a move that will hamper an attempted takeover of the bankrupt firm that has become stuck in an extended legal battle. The decision by the Supreme Court of Santa Fe province, where Vicentin is based, means the company will have to negotiate a new agreement with creditors before a proposed takeover by U.S. grains trader Bunge, Glencore-backed oilseed crusher Viterra and local group ACA could move ahead.

Draft dietary guidelines for 2025-2030 ‘alarming’ and ‘disappointing’ for meat industry... The Dietary Guidelines Advisory Committee (DGAC) is responsible for reviewing current nutrition science and providing recommendations for the Dietary Guidelines for Americans, which are updated every five years. The draft report for the 2025-2030 guidelines emphasizes several key dietary recommendations:

· The committee recommends increasing the intake of fruits, vegetables, legumes, whole grains, nuts and seafood. These foods are associated with numerous health benefits, including reduced risk of chronic diseases such as heart disease and diabetes.

· The draft guidelines suggest limiting the consumption of red and processed meats, refined grains, foods high in saturated fats and salty snacks. These dietary components are linked to negative health outcomes when consumed in excess.

The committee’s approach involves systematic reviews and food pattern modeling to assess the relationship between diet and health across different life stages. Additionally, a focus on health equity ensures that the guidelines are relevant to diverse populations, considering factors like socioeconomic status, race, ethnicity, and culture.

Julie Anna Potts, the president and CEO of the Meat Institute, expressed concerns about the draft recommendations. She described these recommendations as “alarming” and “disappointing,” arguing they contradict some of the Committee’s other findings regarding nutritional deficiencies. Potts’ criticism likely stems from the guidelines’ emphasis on reducing the consumption of red and processed meats, which she believes could lead to nutritional gaps if not properly addressed. The Meat Institute has historically advocated for the role of meat in a balanced diet, emphasizing its nutritional benefits. Potts’ comments reflect a broader industry concern that reducing meat consumption could overlook the importance of meat as a source of essential nutrients, such as protein, iron and B vitamins. The guidelines’ focus on plant-based foods and limiting red meat may be seen by industry representatives as potentially neglecting these nutritional aspects.

IRS announces several updated tax provisions for 2025... The IRS announced updates to several tax provisions for the year 2025, which will affect tax returns filed in 2026. Key changes include adjustments to income tax brackets, standard deductions and estate and gift tax exemptions.

IRS adjusted the income thresholds for each federal income tax bracket to account for inflation. The tax rates remain the same, ranging from 10% to 37%. For 2025, the top tax rate of 37% will apply to individuals with taxable income above $626,350 and married couples filing jointly with incomes over $751,600.

Standard deduction for 2025 will increase significantly, designed to provide some relief from inflation by reducing taxable income:

· Single filers: $15,000

· Married couples filing jointly: $30,000

Of note for farming operations: IRS also increased the thresholds for long-term capital gains tax brackets. These apply to assets held for more than one year. For the 2025 tax year, IRS adjusted the capital gains tax brackets to account for inflation. These adjustments reflect an approximate increase of 2.8% due to inflation, allowing taxpayers to potentially benefit from lower tax rates on their capital gains if their income remains constant or grows slower than inflation. Here are the updated thresholds for long-term capital gains taxes:

0% rate:

· Unmarried individuals: Up to $48,350

· Married individuals filing jointly: Up to $96,700

· Heads of households: Up to $64,750

15% rate:

· Unmarried individuals: Over $48,350

· Married individuals filing jointly: Over $96,700

· Heads of households: Over $64,750

20% rate:

· Unmarried individuals: Over $533,400

· Married individuals filing jointly: Over $600,050

· Heads of households: Over $566,700

Estate and gift tax exemptions have been raised to $13.99 million per person in 2025, up from $13.61 million in 2024. This change allows individuals to transfer more wealth tax-free during their lifetime or at death. These adjustments reflect IRS’s efforts to account for inflation and provide taxpayers with updated guidelines for financial planning.

Post-2025 changes: Unless new legislation is enacted, the exemption is set to decrease significantly on Jan. 1, 2026, reverting to approximately $5 million per person, adjusted for inflation. If Congress does nothing, the exemption will automatically revert to about $7 million for individuals (approximately $14 million for married couples), reflecting pre-TCJA levels adjusted for inflation. Some proposals suggest reducing the exemption even further to $3.5 million per person and introducing higher progressive tax rates ranging from 55% to 65%, with an additional surtax for estates over $1 billion. Another option could be setting a middle-ground exemption figure between the current and proposed lower levels, possibly coupled with a slight increase in tax rates.

ECB’s Lagarde defends fair trade amid tariff proposals... European Central Bank President Christine Lagarde has openly challenged former President Donald Trump’s campaign platform by emphasizing the critical role of international commerce. During meetings of the International Monetary Fund (IMF) and World Bank in Washington, Lagarde addressed Trump’s promises to increase tariffs, arguing against the notion that such measures would benefit the U.S. economy.

In an interview with Bloomberg Television’s Francine Lacqua, Lagarde stated, “Fair trade is a key boost for growth, for employment, for innovation, for productivity. It’s something that we should not throw away because in any period of time where this country, the United States, has thrived were periods of trade — not periods of ‘I’m going to retire behind my boundaries and play at home.’ No.”

Trump has proposed imposing tariffs of 60% on Chinese goods and up to 20% on imports from other countries. Economists warn that such actions could result in the most significant trade disruption since the Smoot-Hawley Act, which exacerbated the Great Depression in the 1930s.

IMF has recently lowered its global growth forecast for the upcoming year and cautioned about increasing risks from geopolitical conflicts and trade protectionism. Lagarde has previously highlighted the euro area’s economy is particularly susceptible to systemic shocks due to its global interconnectedness and potential supply chain disruptions.