USDA/White House/Dems Want to Take Millions of Farms Acres Out of Production
Jobless claims fall to pandemic low | Russia ends troop buildup near Ukraine
In Today’s Digital Newspaper
Market Focus:
• Jobless claims fall to pandemic low
• Biden starts two-day climate summit
• Pet owners spent over $95.7 billion on designer duds and trendy toys
• China plans to double energy storage capacity within five years
• Price of iron ore rose 17% over past month
• China’s big demand for iron ore roiling industrial markets and its trade
• Electric vehicle stocks jumped after latest climate change headlines
• Calif.’s Newsom launches effort to deal with drought; emergencies in two counties
• Reacting to severe drought in Western states, White House unveils working group
• Ag demand update
• Grain rallies to multiyear highs continue
• Exchange raises Argentine corn crop forecast
• Ukraine proposes tariff waiver on 120,000 MT of sugar imports
• Beef and pork stocks typically drawn down roughly 15 million lbs. during March
• Cattle futures tumble despite ongoing beef rally
• Lean hog markets looking ahead to key demand updates
Policy Focus:
• USDA to open enrollment in CRP with higher payment rates, new incentives
Biden Administration Personnel
• Vanita Gupta narrowly confirmed as associate attorney general
China Update:
• Exporters reports sales of 2021-22 U.S. wheat, sorghum to China…
• USDA shifts some old-crop corn to other destinations; some soybean sales were cancelled.
• U.S. ag attaché pegs 2020-21 China corn imports at 28 million tonnes
• U.S. report notes doubts on China hog herd rebuilding
• China makes a big French wheat buy
• Major Chinese hog producers warn a big drop in quarterly earnings coming
• A Belt and Road competitor
• China is world’s biggest producer of greenhouse gas emissions
• Senators urge USTR to restart China tariff exclusion process
• Australia cancels China infrastructure deal, citing national interest
• U.S. Senate committee advances sweeping China bill
Energy & Climate Change:
• Republicans react negatively to Biden climate change proposals
• Janet Yellen calls on corporate America to help U.S. reach climate goals
• EPA’s Regan commits he will not go back to Obama-era WOTUS rule
• Senators again push EPA to restore the ‘integrity’ of RFS
Food & Beverage Industry Update:
• Chipotle blew past Wall Street expectations for first quarter
• Tyson joins cattle traceability program
• Food safety, edible insects
Coronavirus Update:
• India reported world’s biggest one-day jump in new Covid-19 infections
• WHO warns on increasing infections in Argentina, Turkey and Brazil
• L.A. Dodgers offer ‘fully vaccinated’ sections
Politics & Elections:
• Senate GOP keeps earmarks
• House Ag panel chair sets year-end deadline to fix rural broadband
• Christie reportedly seriously considering 2024 presidential run
• Cunningham “strongly considering” South Carolina gubernatorial run
Other Items of Note:
• Putin issues warnings as protests continue
• Russia announces end to massive troop buildup near Ukraine
• U.S./Iran talks
• Farm Progress announces return to live events
MARKET FOCUS
Equities today: The Dow opened around 60 points lower and then broadened the retreat to over 100 points after a broadly positive session in Asia. Japan’s Nikkei rose 679.62 points, 2.38%, at 29,188.17. Hong Kong’s Hang Seng was up 133.42 points, 0.47%, at 28,755.34. European equities are registering gains ahead of the European Central Bank (ECB) meeting conclusion. The Stoxx 600 was up 0.5% with regional markets seeing gains of 0.1% to 0.9%.
U.S. equities yesterday: The Dow gained 316.01 points, 0.93%, at 34,127.31. The Nasdaq was up 163.95 points, 1.19%, at 13,950.22. The S&P 500 was up 38.48 points, 0.93%, at 4,173.42. Small caps are also in focus given the strength seen Wednesday, with the Russell 2000 ending the session up 2.4% to log its best day since March 1.
Stock caution ahead? "Significant stimulus, with more coming from the Biden administration, has driven economic forecasts up and might push overall EPS expectations from the $174 consensus projection currently to $180-$185," Citi's Tobias Levkovich said in a research note. “We think that equities are reflecting something closer to $190, which suggests that much is already priced in and that any shortfall could cause a meaningful pullback."
On tap today:
• Climate summit: President Biden, beginning at 8:00 a.m. ET, kicks off a two-day virtual climate summit aimed at jump-starting negotiations for a global deal to curb emissions world-wide. The U.S. has a new greenhouse gas emissions target: a cut of 50-52%, from 2005 levels, by 2030. Link to White House fact sheet. Biden’s national climate task force will outline a sector-by-sector strategy for paring planet-warming pollution later this year. (Former President Barack Obama had pledged a 26%-28% reduction by 2025 from 2005 levels.)
• European Central Bank releases a policy statement at 7:45 a.m. ET, and ECB President Christine Lagarde holds a press conference at 8:30 a.m. ET.
• U.S. jobless claims, due at 8:30 a.m. ET, are expected to rise to 603,000 in the week ending April 17 from 576,000 a week earlier. Update: Worker filings for jobless claims reached another Covid-19 low at 547,000 last week, the Labor Department said this morning. The decline is a sign the labor market is strengthening. Claims remain higher than the pre-pandemic levels — the weekly average in 2019 was about 218,000.
• USDA Weekly Export Sales report, 8:30 a.m. ET.
• U.S. existing home sales, due at 10 a.m. ET, are expected to fall to an annual pace of 6.11 million in March from 6.22 million a month earlier.
• Conference Board's leading economic index, at 10 a.m. ET, is expected to increase 1% from the prior month.
• Kansas City Fed's manufacturing survey, at 11 a.m. ET, is expected to tick up to 27 in April from 26 a month earlier.
• Japan's consumer price index for March is out at 7:30 p.m. ET
Pet owners spoiled their fur-kids rotten in 2020, spending over $95.7 billion on designer duds and trendy toys. But this group's latest retail-fixation is spurring one new sector to grow 26 times faster than the general pet retail market. And smart investors are paying attention.
Market perspectives:
• Outside markets: The U.S. dollar index is weaker, continuing in a near-term downtrend. Nymex crude oil prices are modestly lower and trading around $61.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.561%. Gold and silver futures are lower ahead of U.S. economic updates, with gold under $1,786 per troy ounce and silver under $26.45 per troy ounce.
• Crude oil prices are still under pressure ahead of the U.S. trading start, though losses for U.S. crude have been trimmed from overnight marks. U.S. crude is trading around $61 per barrel and Brent around $64.85 per barrel. Futures were lower in Asian trade, with U.S. crude down 50 cents at $60.85 per barrel and Brent was down 46 cents at $64.86 per barrel, building on losses registered in Wednesday trade.
• China plans to double energy storage capacity within five years, with a focus on boosting battery storage, proposals aim to use emerging technologies to add 35 GW to power banks by 2025. Link for details.
• Price of iron ore rose to $187.75 a metric ton on April 20, according to S&P Global Platts. It has risen 17% over the past month, extending a rally that began when prices were below $100 a ton less than a year ago.
• China’s big demand for iron ore is roiling industrial markets and the country’s own trade policies. China’s push for the commodity to feed its steel mills has driven the industry’s benchmark price to its highest level since February 2011, including 17% growth over just the past month. That is providing a revenue boost for Australia, which accounts for more than 50% of global iron-ore exports, as the country navigates a trade battle with China, the Wall Street Journal reports (link). Beijing exempted iron ore from a series of import restrictions and tariffs it imposed last year because the imports are critical to China’s steel and infrastructure program. China was the destination for 38.1 million tons, or more than 80%, of iron ore shipped in March from Australia’s Port Hedland, the world’s biggest iron-ore export hub, and Australia expects record earnings from iron-ore exports this year.
• Electric vehicle stocks jumped after the latest climate change headlines, as well as shares of solar companies. According to Bank of America, 90% of companies in the S&P 500 also now publish sustainability reports, up from 20% in 2011, suggesting the trend has gone mainstream. Meanwhile, more than 400 businesses and investors have signed an open letter that backed cutting U.S. greenhouse gas emissions by at least 50% below 2005 levels by 2030. Green investing advocate Ceres said the signatories employ a combined 6M American workers across all 50 states and represent more than $4 trillion in annual revenue.
• Newsom launches effort to deal with drought; emergencies declared in two counties. California Democratic Gov. Gavin Newsom, standing at a parched Lake Mendocino, declared a drought emergency in Sonoma and Mendocino counties. The governor has been under pressure from some to declare a statewide drought emergency but has balked at such a move, favoring a more targeted approach. It could be expanded in the future as needed. The emergency declaration, which comes amid a second consecutive very dry year in California, gives state officials the ability to take steps to preserve water, including potentially curtailing water rights. For now, Newsom said, he is not announcing any mandates. He’s also directing state agencies to prepare now for the likelihood that communities and businesses will face a third year of dry conditions. “We’re in a remarkable moment,” Newsom said, noting that he “should be standing 40 feet under water.” Lake Mendocino is sitting at about 43% capacity and Lake Sonoma is only about 62% full. The state has also seen some of the hottest years on record in recent decades and devastating, deadly fire seasons made worse by low moisture levels. Newsom acknowledged that water is a politically fractious issue in the Golden State but urged people not to resort to “old binaries” like north vs. south and urban vs. rural. “This is California,” he said. “We are Californians.” Still, even as he acknowledged that much of the state is plagued by drought conditions, Newsom said he plans for now to take a regional approach to declaring drought emergencies, targeting areas where water is particularly limited. Jay Lund, director of the Center for Watershed Sciences and a professor of civil and environmental engineering at UC Davis, said he is more concerned about drought conditions in some areas, including some agricultural areas and rural places with low groundwater levels. He’s concerned low water levels could affect some native species, including salmon.
• Reacting to the severe drought in the Western states, the White House announced an Interagency Working Group to support farmers, tribes, and communities impacted by ongoing water shortages. National Climate Adviser Gina McCarthy, chair of the National Climate Task Force, requested that USDA Sec. Tom Vilsack and Interior Secretary Deb Haaland form the working group, which the White House said “will explore opportunities to improve our nation’s resilience to droughts and other severe climate impacts that are upending Americans’ lives and economic livelihoods.”
• Ag demand: Ethiopia has received just one offer in its tender to buy 400,000 MT of milling wheat that closed Tuesday, as well as two participants in a separate tender to buy 30,000 MT of milling wheat. Japan purchased 59,510 MT of food-quality wheat from the U.S. and 25,600 MT of the grain from Canada.
Items in Pro Farmer's First Thing Today include:
• Grain rallies to multiyear highs continue
• Exchange raises Argentine corn crop forecast
• Ukraine proposes tariff waiver on 120,000 MT of sugar imports
• Beef and pork stocks typically drawn down roughly 15 million lbs. during March
• Cattle futures tumble despite ongoing beef rally
• Lean hog markets looking ahead to key demand updates
POLICY FOCUS
— As expected, and alerted last week, USDA will open enrollment in the Conservation Reserve Program (CRP) with higher payment rates, new incentives. USDA Secretary Tom Vilsack announced the plan in a meeting Wednesday (link) of the administration’s climate task force just ahead of today’s beginning of a two-day global climate summit. Vilsack will address the climate summit in the afternoon. The expansions would boost spending on the CRP by $300 million or more annually, said the White House (link). “Sometimes the best solutions are right in front of you,” said Vilsack. “We need to invest in [the CRP] and let it do what it does best: preserve topsoil, sequester carbon, and reduce the impacts of climate change.” Link to home page of the CRP.
Separately, Vilsack and Interior Secretary Deb Haaland were tapped with forming an inter-agency working group to address the needs of communities hurt by drought.
USDA is seeking to enroll another 4 million acres in the CRP and to do so is planning to raise rental payments and expand the number of incentivized environmental practices allowed under the program, including a new Climate-Smart Practice Initiative. Currently, there are 20.8 million acres in CRP, with the Fiscal Year (FY) 2021 acreage cap at 25 million. The CRP acreage cap rises to 25.5 million in FY 2022 and 27 million in FY 2023.
USDA said they will be “adjusting soil rental rates. This enables additional flexibility for rate adjustments, including a possible increase in rates where appropriate.” While USDA is apparently going to increase rental payments where they say it is “appropriate,” Congress in the 2018 Farm Bill set caps of 85% of the county average for the general CRP signups and 90% for land enrolled via the continuous signup.
USDA outlined the following increased incentives to be deployed to boost CRP enrollments:
- Increasing payments for Practice Incentives from 20% to 50%. This incentive for continuous CRP practices is based on the cost of establishment and is in addition to cost share payments.
- Increasing payments for water quality practices. Rates are increasing from 10% to 20% for certain water quality benefiting practices available through the CRP continuous signup, such as grassed waterways, riparian buffers, and filter strips.
- Establishing a CRP Grassland minimum rental rate. This benefits more than 1,300 counties with rates currently below the minimum.
New Climate-Smart Practice Incentive: USDA said it would put a new climate change-mitigation incentive in place — the Climate-Smart Practice Incentive, saying this would be available for general and continuous CRP enrollment and would provide an incentive for establishment of trees and permanent grasses, development of wildlife habitat, and wetland restoration. USDA said it would be an annual payment based on the benefits of each practice.
Comments: It didn’t take long for commodity traders to wonder if this is the first of several steps by Democrat-controlled USDA and the Biden administration to boost the idling of acres by a significant amount, despite tight carryovers of some key crops. The answer, according to contacts, is “yes.” This and other likely coming moves (likely as part of the controversial 30 x 30 executive action proposal) are seen as an end-around the prohibition of announcing set-aside programs relative to basic farm programs. USDA has been signaling they were looking at ways to boost CRP enrollments, announcing in early February that it would keep the general CRP open for an extended period. In making that announcement, USDA said, “Under the previous administration, incentives and rental payment rates were reduced resulting in an enrollment shortfall of over 4 million acres.”
Timing of acreage idling: While USDA’s goal of enrolling 4 million acres into the CRP will not likely bring the acreage level on Oct. 1, 2021 — the start of FY 2022 — to the acreage cap of either 25 million at the end of FY 2021 or the 25.5 million cap in place for FY 2022. Typically, contracts under general signups start Oct. 1 of the next fiscal year. USDA data currently shows contracts on 3 million acres will expire September 30, 2021. Farmers with expiring CRP contracts often opt to enroll at least 50% of those in a new CRP contract. Of the 5.38 million acres that expired Sept. 30, 2020, 2.72 million acres were re-enrolled in CRP and 2.66 million acres actually left the program.
It is murky as to how much of an incentive the new Climate-Smart Practice Incentive could total as USDA said it would depend on the benefits of each practice.
The higher rental rates USDA is seeking to deploy will likely raise some questions in Congress, especially since Congress — led by former House Ag Chairman Collin Peterson (D-Minn.) — put those caps on rates in place to counter the costs of increased CRP acres, but also because farmers were complaining that the CRP program — particularly the continuous enrollments — were competing against farmers, including beginning farmers.
BIDEN ADMINISTRATION PERSONNEL
— Vanita Gupta narrowly confirmed as associate attorney general, after a debate that invoked the national dialogue over police reform and civil rights in the aftermath of George Floyd’s killing. The 51-49 vote reflected weeks of debate over the selection of Gupta for a position that will be involved in civil rights policy and oversee antitrust enforcement. Politico reports Sen. Lisa Murkowski (R-AK) voted for Gupta, “blowing up her party’s effort to make Democrats solely own the confirmation.”
CHINA UPDATE
— Exporters report sales of 2021-22 wheat, sorghum to China but shifts old-crop corn to other destinations. Sales activity to China for the week ended April 15 included new-crop purchases of wheat and sorghum, but some old-crop corn business was shifted to other destinations and some soybean sales were cancelled.
For 2020-21, activity for China was reported as sales of 1,007 tonnes of wheat, net reductions of 123,865 tonnes of corn (including 138,000 tonnes shifted to other destinations), 130,012 tonnes of sorghum, net reductions of 51,215 tonnes of soybeans (including 53,400 tonnes cancelled), and net sales of 38,618 running bales of Upland Cotton.
Activity for 2021-22 was reported as 65,000 tonnes of wheat, 116,000 tonnes of sorghum, and 15,400 running bales of Upland Cotton.
For 2021, net sales of 3,114 tonnes of beef and 13,135 tonnes of pork.
— U.S. ag attaché pegs 2020-21 China corn imports at 28 million tonnes; notes doubts on China hog herd rebuilding. Chinese corn imports are forecast at 28 million tonnes by the U.S. ag attaché in Beijing (link), noting that level is higher than past estimates “due to continued feed demand and a supply deficit that supports restocking of reserves.” USDA’s official (World Board) forecast is 24 million tonnes.
For 2021-22, the attaché forecasts corn imports will fall to 15 million tonnes with feed and residual use forecast to increase by 17 million tonnes, up 6.7% from 2020-21. “Corn prices remain high and commercially held corn stocks are at levels not seen in 15 years,” the attaché said. “Record volumes of old rice and wheat stocks are entering feed mills and deep processing plants as substitutes for high-priced corn. Industry members forecast the corn supply-demand situation will not change until late calendar year 2021 or 2022 at the earliest.”
While China has signaled their hog inventory was nearing levels seen in 2017 before African Swine Fever (ASF), the attaché said, “significant industry doubt persists” due to a combination of higher feed prices and that “ASF and other swine disease outbreaks will moderate and delay recovery.”
China’s 2020 official corn imports were at 11.3 million tonnes, exceeding their WTO Tariff-Rate Quota (TRQ) for the first time in history. The report also noted the large purchases of U.S. corn by China early in 2021, but noted, “accumulated exports trail significantly behind this commitment.”
Other notes from the report: China has sold 17.33 million tonnes of wheat from reserves in six major producing provinces so far this year and incomplete data indicate there are still 57.8 million tonnes of government-owned wheat, with 2016, 2017 and 2019 making up most of the supplies. If stocks are drawn down too fast, the attaché said, “more tightening policies will be introduced.” China’s sorghum imports for 2020-21 are put at 7 million tonnes (USDA official forecast is 7.6 million) for both 2020-21 and 2021-22.
Comments: The attaché’s forecast is again higher than USDA’s World Board estimate for total China corn imports for 2020-21. As for the years ahead, it took USDA’s World Board several years to become comfortable that China was on an extended round of soybean imports. Not mentioned is a mandate from China that hog producers no longer feed up to 50% of the hog herd with swill (garbage). This alone should mean robust China corn imports, or alternative feedgrains, in the years ahead. The trajectory of China’s hog herd recovery could temper some of the advances, but it is clear higher grain-based feeding is ahead in China, despite USDA’s history of slow acceptance of such developments.
— China makes a big French wheat buy. Chinese buyers have reportedly bought at least 500,000 MT of new-crop French wheat for shipment between July and September, with some saying the purchase could be as high as 1 MMT. The news reminds of tight feed supplies within China. Some of this latest purchase is expected to go to China’s milling industry, but some is also expected to be used in feed. Yesterday, the country issued guidance encouraging a shift in feed away from corn and DDGs. Trade sources cited by Reuters say that much of the large purchase was made earlier this month, before the recent rally; others speculate the sales were stretched out over a long period. China has already purchased 1.6 MMT of French wheat for the 2020-21 season that ends June 20.
— Major Chinese hog producers warn a big drop in quarterly earnings coming. Chinese hog producer Wens Foodstuff Group yesterday reported a 71% dive in first quarter earnings, despite gains from the poultry side of its business. Meanwhile, the country’s No. 2 hog producer Jiangxi Zhengbang Technology Co. Ltd. and its No. 4 producer New Hope Liuhe issued profit warnings last week. Hog prices have fallen, feed costs are rising, sows are not performing well and African swine fever is again causing problems. During the first quarter of 2021, hog prices dived 40% as farmers rushed to liquidate herds as ASF spread and the government pledged to crack down on the disease. Pork demand during the Lunar New Year was also disappointing. New Hope is calling for 93% plunge in first quarter profits vs. year-ago and told investors ASF had a major impact in the north, reducing its sow herd by 90,000 pigs (7.5%) with precautions against the virus adding expense. Zhengbang said quarterly profits will likely slide 77% from year-ago, saying the slaughter of 350,000 low-efficiency sows during the quarter had a “relatively big impact.” It also slaughtered 450,000 sows in the fourth quarter of 2020.
— A Belt and Road competitor. The European Union and India plan to create their own infrastructure alliance in a direct challenge to China’s Belt and Road Initiative. The plan would see the two powers work together on projects within their states as well as in Asia and Africa. “The EU and its allies have a common interest here in presenting an alternative to the Belt and Road Initiative, rather than allowing Chinese investment to dominate,” one EU diplomat told the Financial Times (link). Terms of the deal are not yet finalized but should become clearer before the deal is unveiled at a May 8 summit.
— China is currently the world’s biggest producer of greenhouse gas emissions and the biggest consumer of the single-biggest source of emissions: coal. The New York Times reports (link) that China continues to build new coal plants at home and abroad, “part of a global trend that threatens to undermine the world’s chances of slowing down climate change.” In 2020, China added more coal capacity than the rest of the world retired. India and Southeast Asia are also expanding their coal fleets, though neither as fast as they were a few years ago. The International Energy Agency said on Tuesday that coal demand was set to soar this year.
— Senators urge USTR to restart China tariff exclusion process. U.S. Trade Representative Katherine Tai is being called on to restart the process where companies can request exclusions from tariffs imposed on China, a process that expired at the end of 2020. The bipartisan group of 40 lawmakers noted that efforts to challenge “inequities” on the U.S./China trade relationship are important as the use of industrial subsidies, state-owned enterprises (SOEs) and intellectual property theft have cost American jobs. But they also said there are some products only available from China that are “inputs for American manufacturers and small businesses” and that the tariff exclusion process to account for products like that expired December 31, 2020. Renewing the expired or expiring Section 301 exclusions “will give American businesses relief until a full exclusion process can be reinstated.” Restarting the exclusion process should also “acknowledge both the practical realities of global value chains and the broader aim of supply chain diversification.” Inequities in the U.S./China trade relationship can be addressed “without inhibiting the competitiveness and capacity of American businesses and manufacturers,” the lawmakers said. Sens. Rob Portman (R-Ohio) and Tom Carper (D-Del.) led the letter along with 38 colleagues. Link to letter.
— Australia cancels China infrastructure deal, citing national interest. The decision deepens diplomatic dispute; Beijing says Australian government has no sincerity to improve ties. Link for details via the WSJ.
— U.S. Senate committee advances sweeping China bill. The U.S. Senate Foreign Relations Committee on Wednesday backed sweeping legislation to push back against China on issues including human rights, economic competition and international influence, sending the measure for consideration by the full Senate. Link for details via Reuters.
ENERGY & CLIMATE CHANGE
— Republicans react negatively to Biden climate change proposals. “The American people don’t need arbitrary pledges or Democrats’ command-and-control approach that could cripple our economy without addressing the true problem that is global emissions,” Rep. Kevin McCarthy of California, the House Republican leader, said in a statement. Sen. John Barrasso, Republican of Wyoming, said that the president was “unilaterally committing America to a drastic and damaging emissions pledge” that would punish the U.S. economy while “America’s adversaries like China and Russia continue to increase emissions at will.”
— Janet Yellen calls on corporate America to help the U.S. reach its climate goals. The Treasury secretary said the private sector would bear much of the burden of greening the American economy and said the Biden administration was devising a financial reporting framework to make it easier to invest in assets like green bonds.
— EPA’s Regan commits he will not go back to Obama-era WOTUS rule. The Biden administration is seeking to tackle the issue of Clean Water Act regulations by “learning from the lessons of the past,” EPA administrator Michael Regan told members of the House Appropriations Interior-Environment Subcommittee. Specifically on the issue of the Waters of the U.S. (WOTUS) rule from the Obama administration and the Trump administration rule, Regan said: “We don't have any intention of going back to the original Obama Waters of the U.S. verbatim, and we don't necessarily agree with everything that was in the Trump administration's version as well. We've learned lessons from both. We've seen complexities in both, and we've determined that both rules did not necessarily listen to the will of the people.”
Regan said that he and USDA Secretary Tom Vilsack are “attached at the hip” on the issue and Regan said he has had discussions with agriculture company officials about WOTUS since he has been at EPA. “I’m interested in moving forward, not in a ping-pong way, but a way that we can provide some certainty to the ag industry, where we don't overburden the small farmer but we also balance the protection of our wetlands and our sounds and estuaries,” Regan said.
— Senators again push EPA to restore the ‘integrity’ of the RFS. EPA is being called on to set the 2021 and 2022 Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS) to require “conventional renewable fuel volumes of at least 15 billion gallons per year, as required by statute, along with the court-ordered 500 million gallons illegally waived from 2016 standards and increase biodiesel, advanced, and cellulosic volumes.”
The lawmakers told EPA Administrator Michael Regan in a letter (link) that “restoring the integrity of the RFS and expanding market opportunities for renewable fuels should remain a core part of our plans to assist in the economic recovery of rural America and further reduce emissions from the transportation sector.”
Lawmakers also called on EPA to update their modeling on greenhouse gas (GHG) emissions reductions.
Lawmakers also took issue with those refiners indicating they cannot comply with the RFS for 2021, noting the extension of the compliance deadlines for 2019 and 2020 and pointing out that action is in addition to the prior administration granting small refinery exemptions (SREs) that “undercut renewable fuels.”
They also sought to counter arguments that high prices for Renewable Identification Numbers (RINs) are threatening the viability of refiners, pointing out that there are many ways refiners can show compliance with the RFS. They called on EPA to “reject requests” to waive or reduce RVOs and continue the commitment to “support farmers and rural communities by upholding and restoring confidence in the RFS.”
The letter was signed by 12 bipartisan Midwest Senators, including Chuck Grassley (R-Iowa), Amy Klobuchar (D-Minn.), Debbie Stabenow (D-Mich.), and others.
FOOD & BEVERAGE INDUSTRY
— Chipotle, the Mexican-food chain, blew past Wall Street expectations for its first quarter, saying new menu items, ongoing strength for its online orders and a tailwind from stimulus checks pushed its sales more than 20% higher.
— Tyson joins cattle traceability program. Tyson Fresh Meats is now a member of the U.S. CattleTrace, a program formed by a number of state cattlemen’s organizations aimed at developing a national infrastructure for animal disease traceability in the U.S. cattle industry. The group uses ear tags with ultra-high frequency technologies to do so. Tyson is the first beef processor to invest in program membership. “Animal health and disease traceability are critical issues for the meat industry and we’re hopeful our involvement will help advance industry efforts to implement this program across the country,” said Shane Miller, group president, Tyson Fresh Meats. “We believe CattleTrace can help to reduce the risk that animal disease poses to the U.S. cattle supply, while also protecting our industry’s access to important export markets, which can quickly be compromised in the event of an animal health issue.”
— Food safety, edible insects. More than 2,000 insect species are consumed as food in 140 nations around the world, but their possible role as a larger source of food must be weighed against potential safety risks, said the FAO (link for details).
CORONAVIRUS UPDATE
— Summary: Global cases of Covid-19 are at 143,962,157 with 3,061,478 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 31,862,987 with 569,404 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 218,951,909 doses administered, 79,662,861 have been fully vaccinated, or 24.3% of the U.S. population.
— India reported the world’s biggest one-day jump in new Covid-19 infections. The South Asian nation now has 15.9 million Covid-19 cases in total since the start of the pandemic, second only to the U.S., according to data from Johns Hopkins University. India’s hospitals are running short on oxygen, beds and medical supplies.
Meanwhile, the World Health Organization warned on increasing infections in Argentina, Turkey and Brazil. A new law allowing the federal government in Germany to impose curfews and lockdowns was passed in the lower house of parliament there.
— Dodgers offer "fully vaccinated" sections. Fans 16 and older who show proof that two weeks have passed since a final vaccination dose can purchase tickets ($124 to $154) to sit in two "fully vaccinated sections" at the Dodgers-Padres game on Saturday, the L.A. Times reports (link). If Saturday’s test run goes well, the Dodgers will consider adding sections for vaccinated fans at other games.
POLITICS & ELECTIONS
— Senate GOP keeps earmark ban. Senate Republicans on Wednesday voted to keep a ban on earmarks in their caucus rules, a symbolic victory for conservatives. They also added language supporting the idea of spending cuts for raising the debt ceiling, in a call back to the fiscal-hawk priorities that helped fuel the Tea Party wave and swept Republicans to power in 2010. Still, top members of the caucus acknowledge the ban isn’t enforceable and that GOP senators who want to will be able to request and get earmarks.
Senate Appropriations Vice Chairman Richard Shelby (R-Ala.) said it’ll be up to individual members to decide if they want to participate. He said the new system of earmarks won’t get the bad reputation it had before it was banned in 2011. “If you don’t want an earmark don’t ask for one,” Shelby said of yesterday’s decision. “Even if you ask for one, you might not get one, because the old earmark days, they’re gone. They’re going to have to be meritorious, they’re going to have to be substantive in nature, and meaningful for us to really even consider it.”
Sen. Shelley Moore Capito (R-W.Va.), ranking member of the Senate Environment and Public Works Committee and of the Senate Appropriations Homeland Security Subcommittee, said she’ll consider possible earmarks. “I’m going to look seriously at earmarking,” Capito told reporters yesterday. “If I can make my voice heard and be specific on it, and mindful of the transparency, I don’t have a problem with it.”
Sen. Susan Collins (R-Maine), ranking member of the Senate Appropriations Transportation-HUD Subcommittee, also told reporters she plans to submit earmark requests.
— Ag panel chair sets year-end deadline to fix rural broadband. House Ag Chairman David Scott (D-Ga.) is pressing to expand by the end of the year high-speed internet access to all 24 million Americans without it. The deadline comes as bipartisan lawmakers and the broadband industry call for a permanent solution to internet access issues plaguing remote locales, instead of relying on pilot loan programs. It isn’t clear if such a plan can be included in a broader infrastructure package, tacked onto the next farm bill, or pushed through as stand-alone legislation. “
Perspective: One hundred years ago, if the electrification of America was done with the same piecemeal and silos that we experience today in our work with broadband, I fear that many communities would still be in the dark,” ranking member Glenn “GT” Thompson (R-Pa.) said. Lawmakers remain divided on issues of cost, technology, and the role of the private sector. Thompson said he plans to renew his request to the Appropriations Committee to move past the ReConnect pilot program and fund programs from the last farm bill, including around distance learning and telemedicine. “ReConnect has served its purpose as a pilot program, and now it’s time to deliver on policies and programs that we promised the American people two years ago,” he said.
President Joe Biden proposed $100 billion in his infrastructure plan for building out broadband internet for unserved and underserved populations primarily in rural America. The proposal would remove restrictions that prevent municipally owned or rural electric cooperatives from competing with the private sector in serving these communities. House Speaker Nancy Pelosi (D-Calif.) said in mid-April she wants her chamber to pass an infrastructure bill before July 4.
Agriculture Committee member Scott DesJarlais (R-Tenn.) pushed back against the details of Biden’s plan, arguing it could “undermine the system of private competition.” However, he said Congress could help lower broadband-related expenses, such as permitting costs.
— Christie reportedly seriously considering 2024 presidential run. Axios reports that former New Jersey Gov. Chris Christie (R) is “seriously considering running for president in 2024.” Axios cites “three people familiar with his thinking.” According to Axios, “While Christie isn’t saying anything publicly about his thinking — besides telling radio host Hugh Hewitt he’s not ruling it out — people close to him have an early sense of the rationale and outlines of a potential candidacy.”
— Cunningham “strongly considering” South Carolina gubernatorial run. The Columbia (SC) State reports (link) ex-Rep. Joe Cunningham (D-S.C.) has filed paperwork to raise funds for a South Carolina gubernatorial run, and “sounded like a candidate waiting in the wings” as he addressed a Democratic event this week. Asked “if he was laying the groundwork for a possible run for governor, Cunningham responded, ‘I’m strongly considering it.’”
OTHER ITEMS OF NOTE
— Putin issues warnings as protests continue. Russia President Vladimir Putin said Moscow would deliver a swift and harsh response to any foreign threat, a warning that comes amid a vast buildup of its military at the border with Ukraine and a growing protest movement at home — Russian police arrested over 1,400 protesters at rallies across the country organized by allies of jailed dissident Alexei Navalny.
— Russia announces end to massive troop buildup near Ukraine. Russia's defense minister said today that massive military exercises near the border with Ukraine had been completed, and that he had ordered troops to return to their permanent bases by May 1, according to state media. Russia conducted military drills in Crimea that involved more than 60 ships, over 10,000 troops, around 200 aircraft and about 1,200 military vehicles, the Associated Press reports, citing the Russian defense ministry. Defense Minister Sergei Shoigu said the goals of the military exercises "have been fully achieved" and that troops "demonstrated the ability to ensure reliable defense of the country," according to translated remarks. Some observers speculate the Russian buildup appears to have been engineered in part to gauge the response not only of Ukraine, but of the U.S. and Europe.
— U.S./Iran talks. The United States is open to relieving sanctions on Iran’s central bank and a number of key economic sectors, officials told the Wall Street Journal, as all sides concluded five days of talks in Vienna. One serious point of contention remains surrounding the Trump administration’s designation of Islamic Revolutionary Guard Corps (IRGC) as a terrorist organization, a label the Biden administration is loath to lift. Iranian President Hassan Rouhani has signaled cautious optimism over the indirect U.S. talks before they resume next week. “In some steps, we found them serious,” he said. “In some steps they speak equivocally. Now we should see.”
— Farm Progress announces a return to live events. Farm Progress will return to live events with two major farm shows: Farm Progress Show in Decatur, Illinois, Aug. 31 – Sept. 2, 2021 and Husker Harvest Days in Grand Island, Neb., Sept. 14-16, 2021. A survey conducted by Readex Research revealed growing confidence and positivity among prior attendees, indicating 84% of past show attendees will attend in-person or plan to attend if scheduling allows.