EU Studies Trading Houses
As part of its witch hunt for unfair market practices, the EU Parliament’s AGRI Committee requested a study of the major agricultural commodity trading companies and their impacts. The study may inform populists in the U.S. that also see consolidated industries as inherently harmful, but...
Cuban Pipedream
Some in the U.S. agriculture community have spent years trying to improve sales to Cuba, which have increased though from a very small base. Now there is even less reason to think they’ll succeed. Their pipedream has been a hungry population of around 11 million people just 60 miles off the Ame...
Trump’s Tariff Plan; Whither Europe; RTO Beats WFH
Trump’s Tariff PlanFew things attract more speculation than how President-Elect Donald Trump will model his plan to increase tariffs on imports. Some economists have taken his most exaggerated claims and predict they will cause slower economic growth and higher inflation. At least one advisor s...
Political Landscape Taking Shape
After the 2024 elections, the Republicans look to have taken control of Congress, along with a Trump victory, providing a Republican triple sweep. The Senate GOP majority is 53 to 47; and the House GOP majority is still TBD. However, as of today, the Republicans have secured 215 seats, and Demo...
Deep Bench to Fight RFK; China Market Risk; Thankless Job
Deep Bench to Fight RFKBeing the U.S. Secretary of Agriculture is usually a pretty good job. It involves doling out billions of dollars, the constituency is dominated by courteous country people, and controversies tend to be minor. The person serving the longest in any Cabinet position was Jame...
Rice as a Stable Crop
Last year, India restricted non-Basmati rice exports believing there would be a weather-related short supply. Production was ample and now the country faces record high inventories that will likely be dumped on the world market. The OECD calculates that Indian farmers are implicitly taxed $120...
Who Might Be the Next Ag Secretary?
As most Presidents-elect do, former President and President-elect Donald Trump has named his new White House Chief of Staff as his first appointment. It is Susi S. Wiles. Wiles was the co-manager of Trump’s 2024 campaign, and also was a key strategist focused on Florida in his 2016 and 2020 cam...
Transatlantic Trade War; Traders Beat Pollsters; Transatlantic Lesson
Transatlantic Trade WarU.S. equity markets rose yesterday on news of Donald Trump’s victory, while shares in Europe fell. The EU is America’s biggest trading partner and Trump promises tariffs. EU officials are strategizing on how to deal with a Trump presidency, with some urging cooperation, a...
The Day After
The political establishment in Washington is stunned following yesterday's rout by Donald Trump and the Republicans. The Democrats’ arch nemesis not only survived everything they threw at him, but he also took an increasing share of the minority voting block that they claimed as their own. It w...
WPI Preliminary 2025 Acreage Forecasts
The polling for the 2024 U.S. Presidential election had significant forecast errors and history will likely judge the numbers as “wrong”. While it’s hard to argue against such judgement when the results proved a historic sweep for Trump versus predictions of a tight race, the pre-election polls...
Tax Policy Outlook Post Election
After the votes are fully counted, as a new Administration forms, and Congress organizes, WPI will take a deeper look into the policy implications of today’s election. From today’s point of view, unless this election is an unexpected blowout (countering polling data that shows it neck and neck...
EU Confirmation Hearings; Japanese Independence; Lemonades out of Lemons; Border War
EU Confirmation HearingsIn a few months, it will be the turn of either Donald Trump or Kamala Harris’s cabinet nominees to seek confirmation by the legislature but this week it is Europe’s Commission designates confronting the hurdle of the European Parliament (EP). Maroš Šefčovič, Commissioner...
Transatlantic Inverse; Farm Bill Chances
Transatlantic InverseDepending on tomorrow’s election outcome, American businesses will either be saddled with more taxes, regulations, and attacks on consolidation, or be hit with higher import tariffs and maybe the goofy ideas of people like Robert F. Kennedy, Jr. By contrast, Europe has now...
State Directed Meat; Living Space
State Directed MeatUSDA has been issuing loans and grants to startup livestock businesses with the goal of diversifying the industry, providing producers with more options, and lowering the price of meat. Now Pure Prairie Poultry of Minnesota, a beneficiary of $38.7 million in loan guarantees a...
October Jobs Report Tepid
The Bureau of Labor Statistics (BLS) released the October jobs report this morning. Total nonfarm payroll employment was essentially unchanged in October (+12,000), and the unemployment rate was unchanged at 4.1 percent. The pre-report consensus was for an additional 100,000 payroll...
Misdirected Fire; Over-Capacity
Misdirected FireThe Kamala Harris campaign is frustrated that the economy is hot, inflation has dissipated to just 2.4 percent, and yet voters are not feeling it. Politicians learned long ago to never tell the voters they are wrong and have misperceptions. Consequently, she has been acknowledgi...
Interest Rate Outlook
The Fed meets next week, the day after the election. It looks likely there will be a rate cut again for the second time in as many meetings. The federal funds futures market is pricing in a 95.4 percent probability of a cut. At the September meeting, Fed members signaled another 50 basis point...
Post-Election Transatlantic
The EU’s dependency on the U.S. for both defense and economic well-being has focused discussions in Brussels on what the relationship will look like should Donald Trump win on 5 November. The Biden Administration initiated a Trade and Technology Council (TTC) in 2021 with designs to coordinate...
Newsom for President; Fake Meat Lacks Standing
Newsome for PresidentUntil this past Friday, U.S. ethanol producers feared that the California Air Resources Board (CARB) might make an effort to limit the marketing of their products in the Golden State. Now they are singing in the streets as California Governor Gavin Newsom instructed CARB to...
Food Price Outlook Improves
There are often lags in time between when consumers notice a change in the economy, they begin to voice concerns, politicians begin to echo those concerns, and ultimately policymakers take some form of action, if any. Food price inflation is a perfect example of that dynamic. Democratic preside...
RFK Jr Role in a Potential Trump Admin Worrying Aggies
With the election one week from tomorrow, many aggies are turning their attention to the probable role of Robert F. Kennedy Jr. in a Trump Administration should Trump win the election. Over the last week, this is literally the biggest topic of conversation among this analyst’s contacts and sour...
BRICS Grain Exchange; Transatlantic Gaslighting
BRICS Grain ExchangeVladmir Putin used his BRICS conference in Kazan, Russia to formally suggest the creation of a grain exchange by the bloc of countries. He said such an exchange could later be expanded to other products and that it would " contribute to the formation of fair and predictable...
Inflation Disconnect; Economic Opinions
Inflation DisconnectEconomists including those at the Federal Reserve use so-called core inflation when assessing the level of rising prices in the economy. Core inflation excludes food and energy prices since they are considered more volatile, and less directly impacted by the Fed’s monetary p...
TFP as Focus
The International Monetary Fund increased its forecast for U.S. GDP growth this year to 2.8 percent, versus 0.8 percent for the Euro Area and the 0.9 percent average for the non-U.S. G-7 countries. Competitiveness is said to be the primary term in Brussels these days, as it should be. The avera...
U.S. Dietary Guidelines: Booze and Junk Food
Every five years, the Dietary Guidelines for Americans, issued by USDA and the Department of Health and Human Services (HHS) are updated. The new guidelines will be issued next year for 2025-2030. This guidance provides advice on what to eat and drink to meet nutrient needs, promote health, and...
Policy Shortz
U.S. – EU Reset: The transatlantic relationship must be reset after the upcoming election. Brussels produced a state-by-state report on Europe’s trade and investment engagement to help set the environment. U.S. technology firms argue it is ludicrous for Europe to think it can be competitive in...
Biggest Monopoly; Aggies Challenge Trump; Food Safety Risks and Perceptions
Biggest MonopolyReflecting voter concerns about food inflation, both Harris and Trump are attacking the food system and implying concerns about monopoly power. But no industry is as monopolistic as politics where consumer choice is often limited to just two parties. Voters are near evenly split...
CFTC COT Report Analysis
Through 15 October, funds reversed their short covering trends and emerged as net sellers in the soybean, corn, and soymeal markets after the bearish October WASDE and shift towards wetter weather in South America. Funds doubled their short position in soybean futures and are now short a small...
Food Inflation and the Food Service Sector
September retail sales rose slightly more than expected and the underlying details of the report were solid. Sales rose 0.4 percent in September versus a consensus expected rise of 0.3 percent, while revisions to the prior months’ activity pushed the overall gain to 0.5 percent. The monthly inc...
State Control of Markets – Russia; State Control of Markets – U.S
State Control of MarketsRussia’s agriculture ministry recently “suggested” that grain exporters not sell wheat internationally below the minimum price of $250/MT FOB. The minimum price approach is less clumsy than export quotas but is a harder stop than Moscow’ use of export taxes to try and ma...
Asymmetric on Tariffs
Most economists are clear in describing tariffs as a border tax. Their impacts include increasing costs on consumers and reducing trade, and thus self-harming a nation’s economic well-being. Yet, it is difficult to identify a nation that doesn’t use tariffs, and most utilize them more than the...
Farm Subsidies on the March
Subsidies can increase output and there are many ways to subsidize an industry, but that doesn’t mean that countries should do it. Cost of Production: The EU badly wants to become self-sufficient in plant protein. More than four decades ago Europe lost a dispute settlement cas...
Policy Potpourri
Good Many Organisms: The Nobel Prize in Chemistry was awarded this week to scientists at Google DeepMind using AI to predict the structure of proteins and inventing new ones. Capitaslizing on the opportunities, Ginkgo Bioworks announced that it would make available to researchers its API that u...
War on Food Companies; Holding Back the Future
War on Food Companies Market skeptics like U.S. Senator Elizabeth Warren (D-Massachusetts) have stepped up their attack on food companies by accusing them of price gouging by “squeezing profits out of consumers” through shrinkflation and avoiding federal taxes. They charge that comp...
WPI Website Restored
Apologies to those that had trouble accessing WPI's website and analysis articles. Service has now been restored. Please advise if you are still having any issues and thank you for your patience during this technology glitch. ...
Ludditic Longshoremen; Symptom not Disease
Ludditic Longshoremen Labor strikes are always about money, working conditions and job protection but the latter is skyrocketing to the top. The U.S. East and Gulf Coast port workers’ strike is a prime example. Automation is threatening the number of longshoreman positions needed, and the...
Trade Policy Spin; Interstate Trade Barriers
Trade Policy Spin It is an election year, and the Biden Administration is claiming to have opened up $26.7 billion in overseas market access for American farmers. But that carries the same weight with farmers as grocery buyers hearing that food inflation has declined. They are still paying more...
East and Gulf Port Workers on Strike
A port worker strike in the U.S. East Coast and Gulf Ports started today affecting container shipments, while a strike in Vancouver, Canada affecting grain shipments came to an end on Saturday with the final ratification vote to come this Friday, 4 October. As WPI’s Matt Herrington...
Green for You, Grey for Me; Slaying National Champions
Green for You, Grey for Me Some say the EU has been vague about whether it will seek a delay in the December 30 implementation deadline for implementing the EU Deforestation Regulation (EUDR). Brussels told WTO members last week that delay would require a legislative change, which is not imposs...
Nudge versus Cudgel; New Japanese PM; Pesticide Restrictions
Nudge versus Cudgel The Biden Administration has achieved some market openings in various countries, the most recent being obtaining agreement from Chile to accept American cheese products marked with European origin names like gouda, cheddar, and provolone. Chief Agricultural Negotiator Doug M...
Industry Consolidation
U.S. antitrust law is complicated, but current efforts to block a merger between grocery retailers Albertsons and Kroger may not fit the bill. Current triggers under the law include: Market share of 70 percent or more, or less than 50 percent if barriers limit competition. Barriers to entry pr...
Tariff Spiral and WTO Failure; Nuclear Power and GMO’s
Tariff Spiral and WTO Failure Republican presidential nominee Donald Trump now says he will impose 200 percent tariffs on farm machinery from John Deere should the company move its manufacturing to Mexico. He said he would also provide incentives for foreign companies to move their operations t...
Hypocritical on Process Standards; Buy America Bust; Politics of the Port Strike
Hypocritical on Process Standards EU Commission President Ursula von der Leyen will make a decision this week on implementation of the EU Deforestation Regulation. It is set to take effect at the start of 2025 but both internal and external forces want the measure delayed and modified. That inc...
Too Bad for Ag, Tariff Impacts; Climate and Agriculture
Too Bad for Ag In a surprise from the Biden Administration, Deputy National Security Advisor Daleep Singh said that the U.S. should negotiate more sectoral specific trade agreements and outlined new incentives under the Indo-Pacific Economic Framework to entice more buy-in from other countries...
Weaker Consumer Finances Darken Economic Outlook, Despite Interest Rate Cuts
The past two weeks have seen the typical influx of macroeconomic data releases, most of which helped prompt the Federal Reserve to issue its 50-bps interest rate cut on Wednesday. While the interest rate cut was initially viewed as a positive signal (lower interest rates generally increase econ...
How Not to Resuscitate; Micromanagement
How Not to Resuscitate The European Parliament rejected the Commission’s proposal to allow tolerance levels for pesticide residues on some imported foods. Allowing a rat pack of politicians to directly decide scientific issues only contributes to domestic decline. Pesticides can be produc...
High Cost of Food; Sick Man in Europe
High Cost of Food Gallop’s annual Work and Education survey found that Americans have soured on the restaurant and grocery business. They still love farmers but have followed Democratic Presidential nominee Kamala Harris in faulting the food industry for inflation. Over the past year, fav...
More Food, and Fewer Children
Few philanthropists are as focused on hunger in Sub-Saharan Africa than Bill Gates. The Bill and Melinda Gates Foundation has spent billions of dollars on the problem. Activists do not like his promotion of GMO’s as a solution, but they are not as focused as he is on human suffering...
New EU Commission; America First Channels Sovereignty
New EU Commission European Commission President Ursula von der Leyen made known her nominees to run the government in Brussels and the trade and agriculture portfolios have interesting selections. As was speculated previously, Christophe Hansen from Luxembourg has been picked for the agricultur...
Future of EU Agriculture; Future of U.S. Agriculture
Future of EU Agriculture Mercosur: Newly appointed French Prime Minister Michel Barnier reiterated French opposition to a trade agreement with Mercosur at the upcoming G20 summit in Brazil, saying he is seeking coalition partners for a blocking minority. Meanwhile, Mercosur leaders receive...
Farm Bill Force; Black Sea Risks; Food Price Competition
Farm Bill Force A coalition of 300 agricultural groups sent a letter to Congressional leaders urging passage of a new farm bill. Some on Capitol Hill see it as unachievable and sought to add a one-year extension of current law onto a continuing resolution. Instead, there will be one more push d...
Agricultural Trade with Africa
Africa’s population is on a trajectory that could double its size by 2050 to 2.5 billion, or a quarter of the global populace. The West (U.S., EU, Japan) are in a competition with the Axis (China, Russia) for influence over Africa. One way to influence is to actively trade, including in a...
Tariffs are Popular
Tariffs were a hot topic in last night’s debate between the two U.S. presidential candidates. Trump first imposed tariffs, which Harris calls a sales tax, but her Administration keep most of them and she has not ruled out using them again. Trump added to his pro-tariff position by saying...
DEI and Trade; Barriers Against Real Emitters
DEI and Trade Today was Day 1 of the annual WTO Public Forum. The sessions were started many years ago as the institution's response to critics. Each year nongovernmental organizations with a dislike of international trade show up in Geneva to share their angst and demands for change. The agend...
Draghi versus Strategic Dialogue; Cooking the CVD Books
Draghi versus Strategic Dialogue Mario Draghi issued his long-awaited report on European competitiveness that had been requested by the European Commission. Its content stands in both contrast and conflict with U.S. goals and the Strategic Dialogue just completed on future support for European...
Jobs Report and How the Fed Will See It
Today’s jobs report was highly anticipated as a key benchmark before the Federal Open Market Committee (FOMC) meeting later this month and expected to be a factor in the Fed’s decision of whether to cut the federal funds rate by 25 basis points or 50 basis points. As it happens, tod...
Competitor Opportunities (Future of EU Agriculture Part II)
Yesterday, we took an initial and cursory look at the outcome of the EU’s Strategic Dialogue on farm support. Basically, it says move away from area payments and focus resources on small farmers not large operations. Today, we look at it in more detail, the current spin on its outcome ver...
Competitiveness versus Social Goals; Food to Energy
Competitiveness versus Social Goals The EU completed a strategic dialogue on the future of the Continent’s agriculture and despite the June elections whittling down the power of the Greens, they have won the debate on farm subsidies. The farmers protesting ahead of this year’s elect...
Business Economics on Ballot; Tariff Doublespeak
Business Economics on Ballot The American economy largely relies on large corporations for generating growth and wealth. That engine is under attack on numerous counts by politicians looking to stoke voter support by creating a scapegoat. Democrats have pledged to raise the corporate tax rate f...
Thinking About 2025 Post Election Economy
There has been a spate of favorable economic news. Orders for durable goods were up 9.9 percent in July, mostly on orders for new aircraft. This was the biggest increase since July 2020. Corporate profits rose 1.7 percent in the Q2 over Q1 and are up 8.0 percent from a year ago. GDP in Q2 was r...
No Right to Complain; Runaway Subsidies; Plastics and Cows
No Right to Complain Farmers in Nebraska, Iowa, Florida, and Alabama have no right to complain about Mexico’s attempt to ban GMO corn imports, nor GMO restrictions elsewhere in the world. These four states have all enacted various restrictions on lab-grown meat. Florida and Alabama have o...
Policy Adaptation; Policy Rejection
Policy Adaptation Europeans reacted to the regulatory over-prescriptiveness emanating out of Brussels by voting early this summer to reduce the number of Greens in the European Parliament. Conservatives won in the Netherlands, are about to take over in Austria and the central German state of Th...
U.S. Agriculture Recession
What do Germany and U.S. agriculture have in common? They may both be in recession. U.S. net cash farm income is in record decline, having fallen nearly 37 percent in two years. The Ag Economists’ Monthly Monitor survey of 70 economists shows just over half think the sector is in recessio...
Wheat 180; Thinking Small
Wheat 180 Concerned that wheat modified using biotech would cause the collapse of U.S. wheat’s overseas markets, growers wrote a policy in 2008 (later amended) that required approval of the trait in major wheat markets before domestic production could occur. It contained other burdensome...
Political Fallacies
He who smelt it, dealt it. This vulgar framing nonetheless holds an underlying truth. Politicians are concurrently demagoguing about high food prices and warning against the fake news espoused by others. It is altogether an odorous room. Politicians in Europe have no evidence that industr...
U.S. Agriculture’s Downfall; Mexican Threats
U.S. Agriculture’s Downfall Technically, Democratic presidential nominee Kamala Harris has no fingerprints on her Party’s Convention policy platform. It was produced before President Biden handed her the baton. But insiders say she is likely to continue the trade policy agenda set b...
China Developments; Canned or Uncanned
China Developments For a second day in a row, China bought U.S. soybeans now totaling nearly a half million tons early this week, not counting sales to unknown destinations. These sales come despite a U.S. industry concern that Beijing would ignore the economics favoring U.S. soybeans and purch...
Jackson Hole Fed Conference Setting Outlook for Monetary Policy
As WPI reported last week, inflation – particularly food inflation – has been ensconced in the 2024 election campaign. The USDA released its food inflation series today, showing a trend through the end of last year that mirrors what BLS data on the CPI showed for July. Retail food i...
Interconnected Biodiesel Mess; Food Fight over Inflation
Interconnected Biodiesel Mess Markets are globalized and so when the U.S. has border measures against Chinese steel or EVs, more get diverted to the European market. U.S. imports of renewable diesel during the first five months of this year were up 29 percent from a year ago. American producers...
Despite Market Volatility, U.S. Economic Outlook Remains Strong
As WPI readers know, the U.S. stock markets have recently seen heightened volatility due to surprising macroeconomic data and trends, including unemployment and interest rates. The data have been somewhat conflicting, with unemployment rates and inflation gauges offering different outlooks. WPI...
Third Time’s a Charm; California versus Iowa; State Run Economy
Third Time’s a Charm After losing appeals before the Ninth and Eleventh Courts of Appeal, Bayer won a unanimous decision from the Third Circuit Court that the company did not err by not labeling Roundup as a carcinogen. The Court ruled that primacy for labeling pesticides is the Federal I...
Vietnam FTA; Debt versus Efficiency; Gallows Humor
Vietnam FTA USDA’s Foreign Agricultural Service notes that the U.S. is the largest trading partner with Vietnam that lacks a free trade agreement. The result is that U.S. farm product exporters continue to lose market share, especially in higher valued goods. At the same time, Vietnam&rsq...
Leverage at all Cost; NZ Joins Modern Era
Leverage at all Cost Activists have asked the Biden Administration to end the use of economic sanctions against other countries, saying they amount to a collective punishment of civilians. They acknowledge that it is not going away. In fact, all governments use every tool of leverage they can o...
Balancing Offense and Defense; Border Measures; Economic Returns from Sport
Balancing Offense and Defense All growers of all crops are not necessarily competitive even in a large agriculture country. Major U.S. row crop growers have asked USTR to ensure that the Americas Partnership for Economic Prosperity (APEP) provide greater market access for their products. By con...
Politics and Trade; EU Livestock to Get Smaller
Politics and Trade Democratic Presidential candidate Kamala Harris picked Minnesota Governor Tim Walz to be her vice president nominee on the ticket and he reveals the divide on trade for politicians. Representing a Midwest agricultural state, Walz has been a supporter of expanding overseas mar...
RAPP versus Exchange Rate
USDA is making another $300 million available to U.S. agricultural export marketers under the Regional Agricultural Promotion Program (RAPP). The program was launched in 2023 with $1.2 billion from the Commodity Credit Corporation and is in addition to other cost-share export assistance efforts...
Ideas for Sustenance
Too long; didn’t read, so summarized here. Successful Farming: Farmers are trying new things. We are looking at the data from new harvest methods, changing plant spacings, row spacings, and populations. The fertility program gets pushed later and later. We rotate grazing and diversi...
Trade Influences
Although the Biden Administration is pushing quasi-trade agreements like APEP and IPEF, they are only expected to impact the movement of goods and services on the margin, if at all. Both President Biden and former President Donald Trump recognize that most Americans now believe that the U.S. lo...
Record Plunge in Farm Income
Tyne Morgan of the U.S. Farm Report points out that U.S. farm income is facing its largest drop in value in 2024 and its largest ever two year drop in real value when adding 2023 to the calculus. It is a $90 billion drop in two years and farmers appear to be holding on to their supplies in hope...
Activists Lose; AI Hurdles; Chevron and Biofuels
Activists Lose As of this week, there are 136 statewide ballot measures to be voted on this November in 39 different states. That is down more than 15 percent from the average for an even-numbered year election. Notably, there are no initiatives being considered that relate to activists’...
A Buffet of Thoughts
Summarized policy ideas under current debate. Technology Revolutions: The U.S. has not missed many (computers, space, nuclear power, semiconductors, solar, the internet, fracking, genetics, AI) but it has been late to the battery revolution. Economist Noah Smith Transatlantic Trade War: T...
GMO’s 50 Years On
More than 50 years after direct genetic modification was first identified, and nearly three decades after GMO crop production began in the U.S., it is still a controversial technology in many parts of the world. Opposition to GMO’s remains strong in Africa where just four countries have a...
FOMC Preview
The Federal Reserve starts its July meeting tomorrow and has now received the last key data. The Personal Consumption Expenditure (PCE) prices – the Fed’s preferred inflation measure – rose 0.1 percent in June and is up 2.5 percent in the past year compared to a 3.2 percent ga...
Friday Shorts
Non-Meat: In a first, a Europe-based company has sought EU approval to market lab-grown meat, in this case fake foie gras. Some member states have already banned such products. While lab-grown meat remains expensive, and plant-based meat substitutes have faced declining popularity, the increase...
Trump versus Harris Trade Policy; Africa Shines; Trade and the Environment
Trump versus Harris Trade Policy While trade policy analysts assess the future of their vocation under either a Trump or Harris presidency, there is not a lot of uncertainty. Mr. Trump has already advertised his intentions to raise tariffs. He views the U.S. trade deficit as the barometer of ho...
U.S. Policy Battle; WTO Policy Battle; EU Policy Battle
U.S. Policy Battle The two major parties are past the battle over President Biden’s age and should move on to the policy differences. Democrats will try to take their own problem of Biden’s age and apply it to Trump but it is likely to have less salience. Instead, the election will...
Weekend Reading Insights
Because the information superhighway is tl;dr, we did the work for you and summarized the most relevant. Economic Growth: It is not just the result of building tangible things but making use of new ideas. It is relentless technological progress. Economist Daniel Susskind Trade Flows: Water foll...
Doubling Down on Protectionism; Conflicting CAP Goals
Doubling Down on Protectionism Typically, the party platforms crafted every four years by Republicans and Democrats are equally meaningless. Some of their policy prescriptions become codified but many do not. But speakers at this week’s Republican Convention are leaving no doubt that &ldq...
No Olive Branch; Farm Price Charade
No Olive Branch In 2018, the U.S. began imposing 30-44 percent antidumping and countervailing duties on ripe olives originating in Spain. The EU was aghast since it implied that farm payments could be countervailed. Brussels challenged the duties in the WTO dispute settlement process and won. T...
Food Security Angst; More Trade Agreements; Ag Regains EU Power
Food Security Angst Norway announced that it would spend $6 million a year for five years to build up a 60–75-thousand-ton grain reserve, or a three-month supply. The head of the Olam agricultural trading warned of a potential future food war. Supply chains are fragile, countries are erec...
Farm Bill Reassessment; Von der Leyen Threads Needle; Trade Agreements are Dead
Farm Bill Reassessment The chance of reauthorizing the farm bill this year was already looking unlikely but now it has shifted that way for new reasons. A House Agriculture Committee approved bill pleased farm groups but faced a gauntlet from food assistance groups and others on the political l...
PRC GMO in USA; Food Aid Dependency; CFTC Musical Chairs
PRC GMO in USA Members of Congress on the House Select Committee on China are furious at USDA for moving forward with approval of a biotech soybean developed by China’s QiBiodesign. China has refused to approve for domestic planting GMO’s that have been develop by Western companies...
U.S. Talk Representative; EUDR Expansion; Hungary Tanks Innovation; Russia Bolsters CAP
U.S. Talk Representative The Generalized System of Preferences (GSP) that grants duty free access to products from poorer countries expired almost four years ago. The African Growth and Opportunity Act (AGOA), which provides similar nonreciprocal preferential access to the U.S. market but aimed...
Trade Barriers or Facilitation; Ag Rises in EU; Biden Regs
Trade Barriers or Facilitiation The WTO reported that its monitoring of various countries evidences that members are introducing more trade-facilitating policies than they are trade-restrictive measures. It only seems unreal because the trade restrictive practices receive more media attention...
Capital Investment and Productivity
While much of the focus on Europe relates to political instability in the EU, and threats from Russia, there are ample economic issues that also need to be addressed. This is true in both industrial production and agricultural output. European farms continue to lag their American counterparts i...
Transatlantic Monopsonists; Ex-Im Battle Continues
Transatlantic Monopsonists The three coalition partners (EPP, S&D, Renew) set to continue running the EU cannot agree on a sustainability agenda since the Greens got trounced in recent elections but they do agree on farmers. Specifically, they agree that farmers do not get “fair&rdquo...
Corn for Cars; Squeezed Between Two Labors
Corn for Cars Incoming Mexican agriculture minister Julio Berdegue said his country’s new government will not reduce imports of (GMO) yellow corn, but will make self-sufficiency in white corn a priority. Others suggested GMO white corn will continue to be restricted no matter the verdict...
Summary of Weekend Reads
Back by popular demand. Hang on to your seat, this is a whirlwind review of this past summer weekend’s beach reads. Taxes: One of former President Donald Trump’s signature accomplishments was the 2017 Tax Cuts and Jobs Act (TCJA), which his opponents derided for cutting the taxes of...
Technology Ignores Regulators; Two Records in One Year
Technology Ignores Regulators Perhaps as expected, EU member states failed to agree to the latest compromise language on allowing the development of new genomic techniques. Meanwhile, researchers at the University of Sydney have developed a gene editing tool, seekRNA, that could provide higher...
Mixed Action for U.S. Exporters; Attacking American Citizens
Mixed Action for U.S. Exporters The Biden Administration announced an initiative to boost U.S. business opportunities abroad. The effort will be led by the State Department, USTR, and the Commerce Department. No USDA. American industry has long run trade deficits but now agriculture has slipped...
NGT Test this Week; New Mexican Authorities
NGT Test this Week The Belgian presidency of the EU will make its last effort to obtain approval of a regulatory proposal for new genomic techniques. If it fails, the effort will be passed along to the Hungarian presidency that begins in July. Chances are, it will fail despite being watered dow...
Poor Feed for the Golden Goose; Disingenuous Argument
Poor Feed for the Golden Goose Most people understand basic economics, but not all the subtleties of its principles. Competition makes sense, unless someone says it’s unfair. Some politicians trying to lead America out of its muddle, which is to say the octogenarian “leadership,&rdq...
Tight Margins Prevent Disruption; Hungary Isn’t Hungry; Two-Tiered Pricing
Tight Margins Prevent Disruption While populist politicians complain about corporate greed, the businesses with long term success in agriculture achieve their success via tight margins. Bloomberg notes that upstarts in the “agrifoodtech” space like Farmers Edge Inc. and Gro Intellig...
Cutting Food Waste; Conflicting Approaches
Cutting Food Waste USDA issued a national strategy yesterday that aims to cut food waste by 50 percent by 2030. According to the agency, food waste in the U.S. involves a third of the supply. There are many reasons why this is concerning and USDA has proposed many remediation steps along the su...
Farm Bill Prospects; Transatlantic Reverberations; Trade Policy Disconnect
Farm Bill Prospects Although the odds are long, there are some political dynamics that benefit the completion of a farm bill. Republicans barely control the House, but they have the potential to complete passage of a bill in that body. Democrats barely control the Senate, but there are Democrat...
Food as National Security; Food Policy and Climate Change
Food as National Security Journalists like Greg Ip and Noah Smith have identified the West’s trifecta of tools to counter China: industrial policy, export controls, and tariffs. They note another needed factor, unified western economics, but acknowledge it is difficult to achieve. Other f...
Immigration Tariffs?
At a campaign event in Arizona, former President Trump floated the idea of using tariffs on countries who don’t cooperate with the U.S. on illegal immigration, and specifically, those countries taking back citizens who illegally immigrate into the U.S. While most illegal immigration...
Goodbye Green Deal/F2F; Unfarming California
Goodbye Green Deal/F2F The EU’s ruling elites are still assessing the impacts of yesterday’s victories by conservative parties that they had derisively called “far right,” anti-democratic, and anti-EU ahead of the election. The results and especially the loss by the Gree...
Mixed Jobs Report, Higher Manufacturing, and Next Week’s Fed Meeting
Today’s jobs report indicated that total non-farm payrolls rose 272,000 in May, easily beating the consensus pre-report expectation of 180,000. Total hours worked in May rose 0.2 percent and are up 1.3 percent from a year ago. Average hourly earnings increased 0.4 percent and are up 4.1 p...
Silly International Bureaucrat
UN Secretary General António Guterres has called fossil fuel firms the “grandfathers of climate chaos” and argues that advertising limits like those imposed on tobacco should be applied to the fossil fuel industry as well. Unlike tobacco, energy is a demand inelastic necessit...
Farm Bill Prognosis; Reciprocity with Canada
Farm Bill Prognosis A recent survey of economists indicated most do not believe a new U.S. farm bill will be enacted this year. Some speculated it would be 2025, and still others thought 2026. The 2018 Farm Bill is currently on extensions that expire later this year. The Senate Agriculture Comm...
U.S. – Brazil Dialogue; Tone Deaf in Europe
U.S. – Brazil Dialogue The 22nd Plenary of the U.S. – Brazil Commercial Dialogue will be held in September to discuss reducing non-tariff barriers. However, some of the larger issues between the two countries should include tariffs and foreign policy. Brazil maintains an 18 percent...
From Weekend Reading
In addition to attacking China, populist politicians on both the American right and left are finding audience encouragement when they attack big companies. Business is going to have to spend more on politics if they are to avoid getting slaughtered. Farm subsidies will not be disciplined...
Friday Policy Roundup
Brussels versus Beijing: Beijing may launch an investigation into whether the EU is dumping pork into China. Brussels opened an anti-dumping probe on vanillin from China. France, Germany, and the Netherlands want an enforcement mechanism to ensure that used cooking oil imported from China for b...
Whither U.S. Trade Policy
May is World Trade Month and President Biden declared last week World Trade Week. USDA described it as the perfect opportunity to highlight the importance of trade to the farm sector and to the nation. However, most of the private sector free trade wonks spent the time reading former WTO offici...
Food Price Improvements
USDA’s Economic Research Service issued its updated forecast for food-related inflation in 2024 and for the most part it involves good news. Year-to-date consumer food price inflation is below the 20-year historical average (2004-2023) and is likely to stay that way. Meat and poultry pric...
Friday Policy Shorts
Standards not Tariffs: The complaint against China and some other countries is that production practices are more highly distorted by government policies than in the West. The Biden Administration and former President Donald Trump look to tariffs to solve the problem. By contrast, the EU erects...
Senate Would Reject Obama; Europe Lives on Crisps
Trade and Commerce Divide; Genetic Divide
Trade and Commerce Divide Populist Congresswoman Rosa DeLauro (D-Connecticut) wants her Democratic colleagues to undermine corporate America by disrupting trade negotiations and removing investor state protections. The Biden Administration has already mostly stalled industry’s desire for...
Breaking Eggs with Poor Math
Activists have been pressuring the Biden Administration to take more action against Big Ag. The latest is an attack on egg production. Opponents are blaming the spread of avian influenza (AI) and the high cost of eggs on what they claim is 110 billion eggs produced on just 347 farms. They asser...
Status of Global Ag
USDA’s Economic Research Service has produced an expansive study entitled, World Agricultural Production, Resource Use, and Productivity, 1961–2020. Its authors examined the period and despite activists calling the food system broken, the researchers emphasized some key successes:&n...
Ultra-Processed Dog Food; Antidumping is Legal
Ultra-Processed Dog Food The number of pets spiked during COVID but the overall trend has been more domestic animals and fewer human babies. Pets are lower cost than children but the pet industry knows there is still a lot of disposable income to be made off the furry members of the family. Whi...
China Retaliation?; WTO Dispute System Not Urgent
China Retaliation? The assumption is that China will retaliate against U.S. agriculture for any new tariffs applied to Chinese goods by President Biden under Section 301. But at least one American expert on China doesn’t think that is a given. Under this construct, Beijing views the new t...
Transatlantic Glue
China understandably responded harshly to the Biden Administration’s sharp increase in tariffs on EV’s and components. However, there is not much that Beijing can do about it except retaliate. The EU already shared Washington’s angst about China undermining Western industries...
Tariff Man’s Competitor; Europe Correctly Fears Trump
Tariff Man’s Competitor Former President Donald Trump prided himself on his use of tariffs, which candidate Biden criticized but now President Biden fully embraces. In fact, he is proclaiming his own new tariffs on $18 billion worth of Chinese goods and calling them “historic.&rdquo...
Atmanirbhar Bharat Abhiyan
U.S. agriculture representatives returning from a trade mission to India are all excited about their prospects for boosting sales to the world’s most populous country. They are likely suffering from what the great psychologist and behavioral economist Daniel Kahneman called focusing illus...
Psychobiotic Nonsense; SPS/TBT and Poultry
Psychobiotic Nonsense One component of a book called The Psychobiotic Revolution is scientifically reasonable – that the human gut biome contains trillions of beneficial microbes. And that disturbing that biome can have adverse effects on physical and mental health. One more reasonable th...
Grossly Modified Opinion; BRICS Grain Exchange
Grossly Modified Opinion While the European Parliament’s plan for regulating New Genomic Traits (NGT’s) provides a lighter regulatory treatment for NTG-1 products, its associated labeling requirements will be exploited by the anti-GMO crowd. U.S. regulatory agencies are planning to...
Flimsy Arguments; Bien SUR Pesticides
Flimsy Arguments Certain Americans are taking sides with Hamas in Gaza, arguing that it is Israel to blame. In a similar fashion, progressive groups focused on agriculture are calling on Washington to cease its bullying of Mexico on GMO corn. They defend Mexico City for pursuing “food sov...
Remake Agriculture for the Climate; Counter-Notifying India; Plurilateral Path
Remake Agriculture for the Climate The World Bank has issued a report on achieving net zero emissions in the agrifood system (Recipe for a Livable Planet) that cites the sector for being a big emitter, but also one that can achieve reductions at a relatively low-cost. It makes the usual recomme...
Having Cake and Eat it Too; Philippine Opportunity
Having Cake and Eat it Too The U.S. is a major food exporter and its sales to India are relatively small and steady due to the border measures it encounters. By contrast, India demands the right to high border measures due to it being a poor country with food insecurity, despite the fact it exp...
Geographic Food Price Differences
Eastern European countries were upset a few years ago when it was discovered that food marketers were retailing lower quality foods in their region of Europe versus countries in the west. Price was not discussed but that differentiation would have followed willingness to pay and the fact that m...
EU Studies Trading Houses
As part of its witch hunt for unfair market practices, the EU Parliament’s AGRI Committee requested a study of the major agricultural commodity trading companies and their impacts. The study may inform populists in the U.S. that also see consolidated industries as inherently harmful, but...
Cuban Pipedream
Some in the U.S. agriculture community have spent years trying to improve sales to Cuba, which have increased though from a very small base. Now there is even less reason to think they’ll succeed. Their pipedream has been a hungry population of around 11 million people just 60 miles off the Ame...
Trump’s Tariff Plan; Whither Europe; RTO Beats WFH
Trump’s Tariff PlanFew things attract more speculation than how President-Elect Donald Trump will model his plan to increase tariffs on imports. Some economists have taken his most exaggerated claims and predict they will cause slower economic growth and higher inflation. At least one advisor s...
Political Landscape Taking Shape
After the 2024 elections, the Republicans look to have taken control of Congress, along with a Trump victory, providing a Republican triple sweep. The Senate GOP majority is 53 to 47; and the House GOP majority is still TBD. However, as of today, the Republicans have secured 215 seats, and Demo...
Deep Bench to Fight RFK; China Market Risk; Thankless Job
Deep Bench to Fight RFKBeing the U.S. Secretary of Agriculture is usually a pretty good job. It involves doling out billions of dollars, the constituency is dominated by courteous country people, and controversies tend to be minor. The person serving the longest in any Cabinet position was Jame...
Rice as a Stable Crop
Last year, India restricted non-Basmati rice exports believing there would be a weather-related short supply. Production was ample and now the country faces record high inventories that will likely be dumped on the world market. The OECD calculates that Indian farmers are implicitly taxed $120...
Who Might Be the Next Ag Secretary?
As most Presidents-elect do, former President and President-elect Donald Trump has named his new White House Chief of Staff as his first appointment. It is Susi S. Wiles. Wiles was the co-manager of Trump’s 2024 campaign, and also was a key strategist focused on Florida in his 2016 and 2020 cam...
Transatlantic Trade War; Traders Beat Pollsters; Transatlantic Lesson
Transatlantic Trade WarU.S. equity markets rose yesterday on news of Donald Trump’s victory, while shares in Europe fell. The EU is America’s biggest trading partner and Trump promises tariffs. EU officials are strategizing on how to deal with a Trump presidency, with some urging cooperation, a...
The Day After
The political establishment in Washington is stunned following yesterday's rout by Donald Trump and the Republicans. The Democrats’ arch nemesis not only survived everything they threw at him, but he also took an increasing share of the minority voting block that they claimed as their own. It w...
WPI Preliminary 2025 Acreage Forecasts
The polling for the 2024 U.S. Presidential election had significant forecast errors and history will likely judge the numbers as “wrong”. While it’s hard to argue against such judgement when the results proved a historic sweep for Trump versus predictions of a tight race, the pre-election polls...
Tax Policy Outlook Post Election
After the votes are fully counted, as a new Administration forms, and Congress organizes, WPI will take a deeper look into the policy implications of today’s election. From today’s point of view, unless this election is an unexpected blowout (countering polling data that shows it neck and neck...
EU Confirmation Hearings; Japanese Independence; Lemonades out of Lemons; Border War
EU Confirmation HearingsIn a few months, it will be the turn of either Donald Trump or Kamala Harris’s cabinet nominees to seek confirmation by the legislature but this week it is Europe’s Commission designates confronting the hurdle of the European Parliament (EP). Maroš Šefčovič, Commissioner...
Transatlantic Inverse; Farm Bill Chances
Transatlantic InverseDepending on tomorrow’s election outcome, American businesses will either be saddled with more taxes, regulations, and attacks on consolidation, or be hit with higher import tariffs and maybe the goofy ideas of people like Robert F. Kennedy, Jr. By contrast, Europe has now...
State Directed Meat; Living Space
State Directed MeatUSDA has been issuing loans and grants to startup livestock businesses with the goal of diversifying the industry, providing producers with more options, and lowering the price of meat. Now Pure Prairie Poultry of Minnesota, a beneficiary of $38.7 million in loan guarantees a...
October Jobs Report Tepid
The Bureau of Labor Statistics (BLS) released the October jobs report this morning. Total nonfarm payroll employment was essentially unchanged in October (+12,000), and the unemployment rate was unchanged at 4.1 percent. The pre-report consensus was for an additional 100,000 payroll...
Misdirected Fire; Over-Capacity
Misdirected FireThe Kamala Harris campaign is frustrated that the economy is hot, inflation has dissipated to just 2.4 percent, and yet voters are not feeling it. Politicians learned long ago to never tell the voters they are wrong and have misperceptions. Consequently, she has been acknowledgi...
Interest Rate Outlook
The Fed meets next week, the day after the election. It looks likely there will be a rate cut again for the second time in as many meetings. The federal funds futures market is pricing in a 95.4 percent probability of a cut. At the September meeting, Fed members signaled another 50 basis point...
Post-Election Transatlantic
The EU’s dependency on the U.S. for both defense and economic well-being has focused discussions in Brussels on what the relationship will look like should Donald Trump win on 5 November. The Biden Administration initiated a Trade and Technology Council (TTC) in 2021 with designs to coordinate...
Newsom for President; Fake Meat Lacks Standing
Newsome for PresidentUntil this past Friday, U.S. ethanol producers feared that the California Air Resources Board (CARB) might make an effort to limit the marketing of their products in the Golden State. Now they are singing in the streets as California Governor Gavin Newsom instructed CARB to...
Food Price Outlook Improves
There are often lags in time between when consumers notice a change in the economy, they begin to voice concerns, politicians begin to echo those concerns, and ultimately policymakers take some form of action, if any. Food price inflation is a perfect example of that dynamic. Democratic preside...
RFK Jr Role in a Potential Trump Admin Worrying Aggies
With the election one week from tomorrow, many aggies are turning their attention to the probable role of Robert F. Kennedy Jr. in a Trump Administration should Trump win the election. Over the last week, this is literally the biggest topic of conversation among this analyst’s contacts and sour...
BRICS Grain Exchange; Transatlantic Gaslighting
BRICS Grain ExchangeVladmir Putin used his BRICS conference in Kazan, Russia to formally suggest the creation of a grain exchange by the bloc of countries. He said such an exchange could later be expanded to other products and that it would " contribute to the formation of fair and predictable...
Inflation Disconnect; Economic Opinions
Inflation DisconnectEconomists including those at the Federal Reserve use so-called core inflation when assessing the level of rising prices in the economy. Core inflation excludes food and energy prices since they are considered more volatile, and less directly impacted by the Fed’s monetary p...
TFP as Focus
The International Monetary Fund increased its forecast for U.S. GDP growth this year to 2.8 percent, versus 0.8 percent for the Euro Area and the 0.9 percent average for the non-U.S. G-7 countries. Competitiveness is said to be the primary term in Brussels these days, as it should be. The avera...
U.S. Dietary Guidelines: Booze and Junk Food
Every five years, the Dietary Guidelines for Americans, issued by USDA and the Department of Health and Human Services (HHS) are updated. The new guidelines will be issued next year for 2025-2030. This guidance provides advice on what to eat and drink to meet nutrient needs, promote health, and...
Policy Shortz
U.S. – EU Reset: The transatlantic relationship must be reset after the upcoming election. Brussels produced a state-by-state report on Europe’s trade and investment engagement to help set the environment. U.S. technology firms argue it is ludicrous for Europe to think it can be competitive in...
Biggest Monopoly; Aggies Challenge Trump; Food Safety Risks and Perceptions
Biggest MonopolyReflecting voter concerns about food inflation, both Harris and Trump are attacking the food system and implying concerns about monopoly power. But no industry is as monopolistic as politics where consumer choice is often limited to just two parties. Voters are near evenly split...
CFTC COT Report Analysis
Through 15 October, funds reversed their short covering trends and emerged as net sellers in the soybean, corn, and soymeal markets after the bearish October WASDE and shift towards wetter weather in South America. Funds doubled their short position in soybean futures and are now short a small...
Food Inflation and the Food Service Sector
September retail sales rose slightly more than expected and the underlying details of the report were solid. Sales rose 0.4 percent in September versus a consensus expected rise of 0.3 percent, while revisions to the prior months’ activity pushed the overall gain to 0.5 percent. The monthly inc...
State Control of Markets – Russia; State Control of Markets – U.S
State Control of MarketsRussia’s agriculture ministry recently “suggested” that grain exporters not sell wheat internationally below the minimum price of $250/MT FOB. The minimum price approach is less clumsy than export quotas but is a harder stop than Moscow’ use of export taxes to try and ma...
Asymmetric on Tariffs
Most economists are clear in describing tariffs as a border tax. Their impacts include increasing costs on consumers and reducing trade, and thus self-harming a nation’s economic well-being. Yet, it is difficult to identify a nation that doesn’t use tariffs, and most utilize them more than the...
Farm Subsidies on the March
Subsidies can increase output and there are many ways to subsidize an industry, but that doesn’t mean that countries should do it. Cost of Production: The EU badly wants to become self-sufficient in plant protein. More than four decades ago Europe lost a dispute settlement cas...
Policy Potpourri
Good Many Organisms: The Nobel Prize in Chemistry was awarded this week to scientists at Google DeepMind using AI to predict the structure of proteins and inventing new ones. Capitaslizing on the opportunities, Ginkgo Bioworks announced that it would make available to researchers its API that u...
War on Food Companies; Holding Back the Future
War on Food Companies Market skeptics like U.S. Senator Elizabeth Warren (D-Massachusetts) have stepped up their attack on food companies by accusing them of price gouging by “squeezing profits out of consumers” through shrinkflation and avoiding federal taxes. They charge that comp...
WPI Website Restored
Apologies to those that had trouble accessing WPI's website and analysis articles. Service has now been restored. Please advise if you are still having any issues and thank you for your patience during this technology glitch. ...
Ludditic Longshoremen; Symptom not Disease
Ludditic Longshoremen Labor strikes are always about money, working conditions and job protection but the latter is skyrocketing to the top. The U.S. East and Gulf Coast port workers’ strike is a prime example. Automation is threatening the number of longshoreman positions needed, and the...
Trade Policy Spin; Interstate Trade Barriers
Trade Policy Spin It is an election year, and the Biden Administration is claiming to have opened up $26.7 billion in overseas market access for American farmers. But that carries the same weight with farmers as grocery buyers hearing that food inflation has declined. They are still paying more...
East and Gulf Port Workers on Strike
A port worker strike in the U.S. East Coast and Gulf Ports started today affecting container shipments, while a strike in Vancouver, Canada affecting grain shipments came to an end on Saturday with the final ratification vote to come this Friday, 4 October. As WPI’s Matt Herrington...
Green for You, Grey for Me; Slaying National Champions
Green for You, Grey for Me Some say the EU has been vague about whether it will seek a delay in the December 30 implementation deadline for implementing the EU Deforestation Regulation (EUDR). Brussels told WTO members last week that delay would require a legislative change, which is not imposs...
Nudge versus Cudgel; New Japanese PM; Pesticide Restrictions
Nudge versus Cudgel The Biden Administration has achieved some market openings in various countries, the most recent being obtaining agreement from Chile to accept American cheese products marked with European origin names like gouda, cheddar, and provolone. Chief Agricultural Negotiator Doug M...
Industry Consolidation
U.S. antitrust law is complicated, but current efforts to block a merger between grocery retailers Albertsons and Kroger may not fit the bill. Current triggers under the law include: Market share of 70 percent or more, or less than 50 percent if barriers limit competition. Barriers to entry pr...
Tariff Spiral and WTO Failure; Nuclear Power and GMO’s
Tariff Spiral and WTO Failure Republican presidential nominee Donald Trump now says he will impose 200 percent tariffs on farm machinery from John Deere should the company move its manufacturing to Mexico. He said he would also provide incentives for foreign companies to move their operations t...
Hypocritical on Process Standards; Buy America Bust; Politics of the Port Strike
Hypocritical on Process Standards EU Commission President Ursula von der Leyen will make a decision this week on implementation of the EU Deforestation Regulation. It is set to take effect at the start of 2025 but both internal and external forces want the measure delayed and modified. That inc...
Too Bad for Ag, Tariff Impacts; Climate and Agriculture
Too Bad for Ag In a surprise from the Biden Administration, Deputy National Security Advisor Daleep Singh said that the U.S. should negotiate more sectoral specific trade agreements and outlined new incentives under the Indo-Pacific Economic Framework to entice more buy-in from other countries...
Weaker Consumer Finances Darken Economic Outlook, Despite Interest Rate Cuts
The past two weeks have seen the typical influx of macroeconomic data releases, most of which helped prompt the Federal Reserve to issue its 50-bps interest rate cut on Wednesday. While the interest rate cut was initially viewed as a positive signal (lower interest rates generally increase econ...
How Not to Resuscitate; Micromanagement
How Not to Resuscitate The European Parliament rejected the Commission’s proposal to allow tolerance levels for pesticide residues on some imported foods. Allowing a rat pack of politicians to directly decide scientific issues only contributes to domestic decline. Pesticides can be produc...
High Cost of Food; Sick Man in Europe
High Cost of Food Gallop’s annual Work and Education survey found that Americans have soured on the restaurant and grocery business. They still love farmers but have followed Democratic Presidential nominee Kamala Harris in faulting the food industry for inflation. Over the past year, fav...
More Food, and Fewer Children
Few philanthropists are as focused on hunger in Sub-Saharan Africa than Bill Gates. The Bill and Melinda Gates Foundation has spent billions of dollars on the problem. Activists do not like his promotion of GMO’s as a solution, but they are not as focused as he is on human suffering...
New EU Commission; America First Channels Sovereignty
New EU Commission European Commission President Ursula von der Leyen made known her nominees to run the government in Brussels and the trade and agriculture portfolios have interesting selections. As was speculated previously, Christophe Hansen from Luxembourg has been picked for the agricultur...
Future of EU Agriculture; Future of U.S. Agriculture
Future of EU Agriculture Mercosur: Newly appointed French Prime Minister Michel Barnier reiterated French opposition to a trade agreement with Mercosur at the upcoming G20 summit in Brazil, saying he is seeking coalition partners for a blocking minority. Meanwhile, Mercosur leaders receive...
Farm Bill Force; Black Sea Risks; Food Price Competition
Farm Bill Force A coalition of 300 agricultural groups sent a letter to Congressional leaders urging passage of a new farm bill. Some on Capitol Hill see it as unachievable and sought to add a one-year extension of current law onto a continuing resolution. Instead, there will be one more push d...
Agricultural Trade with Africa
Africa’s population is on a trajectory that could double its size by 2050 to 2.5 billion, or a quarter of the global populace. The West (U.S., EU, Japan) are in a competition with the Axis (China, Russia) for influence over Africa. One way to influence is to actively trade, including in a...
Tariffs are Popular
Tariffs were a hot topic in last night’s debate between the two U.S. presidential candidates. Trump first imposed tariffs, which Harris calls a sales tax, but her Administration keep most of them and she has not ruled out using them again. Trump added to his pro-tariff position by saying...
DEI and Trade; Barriers Against Real Emitters
DEI and Trade Today was Day 1 of the annual WTO Public Forum. The sessions were started many years ago as the institution's response to critics. Each year nongovernmental organizations with a dislike of international trade show up in Geneva to share their angst and demands for change. The agend...
Draghi versus Strategic Dialogue; Cooking the CVD Books
Draghi versus Strategic Dialogue Mario Draghi issued his long-awaited report on European competitiveness that had been requested by the European Commission. Its content stands in both contrast and conflict with U.S. goals and the Strategic Dialogue just completed on future support for European...
Jobs Report and How the Fed Will See It
Today’s jobs report was highly anticipated as a key benchmark before the Federal Open Market Committee (FOMC) meeting later this month and expected to be a factor in the Fed’s decision of whether to cut the federal funds rate by 25 basis points or 50 basis points. As it happens, tod...
Competitor Opportunities (Future of EU Agriculture Part II)
Yesterday, we took an initial and cursory look at the outcome of the EU’s Strategic Dialogue on farm support. Basically, it says move away from area payments and focus resources on small farmers not large operations. Today, we look at it in more detail, the current spin on its outcome ver...
Competitiveness versus Social Goals; Food to Energy
Competitiveness versus Social Goals The EU completed a strategic dialogue on the future of the Continent’s agriculture and despite the June elections whittling down the power of the Greens, they have won the debate on farm subsidies. The farmers protesting ahead of this year’s elect...
Business Economics on Ballot; Tariff Doublespeak
Business Economics on Ballot The American economy largely relies on large corporations for generating growth and wealth. That engine is under attack on numerous counts by politicians looking to stoke voter support by creating a scapegoat. Democrats have pledged to raise the corporate tax rate f...
Thinking About 2025 Post Election Economy
There has been a spate of favorable economic news. Orders for durable goods were up 9.9 percent in July, mostly on orders for new aircraft. This was the biggest increase since July 2020. Corporate profits rose 1.7 percent in the Q2 over Q1 and are up 8.0 percent from a year ago. GDP in Q2 was r...
No Right to Complain; Runaway Subsidies; Plastics and Cows
No Right to Complain Farmers in Nebraska, Iowa, Florida, and Alabama have no right to complain about Mexico’s attempt to ban GMO corn imports, nor GMO restrictions elsewhere in the world. These four states have all enacted various restrictions on lab-grown meat. Florida and Alabama have o...
Policy Adaptation; Policy Rejection
Policy Adaptation Europeans reacted to the regulatory over-prescriptiveness emanating out of Brussels by voting early this summer to reduce the number of Greens in the European Parliament. Conservatives won in the Netherlands, are about to take over in Austria and the central German state of Th...
U.S. Agriculture Recession
What do Germany and U.S. agriculture have in common? They may both be in recession. U.S. net cash farm income is in record decline, having fallen nearly 37 percent in two years. The Ag Economists’ Monthly Monitor survey of 70 economists shows just over half think the sector is in recessio...
Wheat 180; Thinking Small
Wheat 180 Concerned that wheat modified using biotech would cause the collapse of U.S. wheat’s overseas markets, growers wrote a policy in 2008 (later amended) that required approval of the trait in major wheat markets before domestic production could occur. It contained other burdensome...
Political Fallacies
He who smelt it, dealt it. This vulgar framing nonetheless holds an underlying truth. Politicians are concurrently demagoguing about high food prices and warning against the fake news espoused by others. It is altogether an odorous room. Politicians in Europe have no evidence that industr...
U.S. Agriculture’s Downfall; Mexican Threats
U.S. Agriculture’s Downfall Technically, Democratic presidential nominee Kamala Harris has no fingerprints on her Party’s Convention policy platform. It was produced before President Biden handed her the baton. But insiders say she is likely to continue the trade policy agenda set b...
China Developments; Canned or Uncanned
China Developments For a second day in a row, China bought U.S. soybeans now totaling nearly a half million tons early this week, not counting sales to unknown destinations. These sales come despite a U.S. industry concern that Beijing would ignore the economics favoring U.S. soybeans and purch...
Jackson Hole Fed Conference Setting Outlook for Monetary Policy
As WPI reported last week, inflation – particularly food inflation – has been ensconced in the 2024 election campaign. The USDA released its food inflation series today, showing a trend through the end of last year that mirrors what BLS data on the CPI showed for July. Retail food i...
Interconnected Biodiesel Mess; Food Fight over Inflation
Interconnected Biodiesel Mess Markets are globalized and so when the U.S. has border measures against Chinese steel or EVs, more get diverted to the European market. U.S. imports of renewable diesel during the first five months of this year were up 29 percent from a year ago. American producers...
Despite Market Volatility, U.S. Economic Outlook Remains Strong
As WPI readers know, the U.S. stock markets have recently seen heightened volatility due to surprising macroeconomic data and trends, including unemployment and interest rates. The data have been somewhat conflicting, with unemployment rates and inflation gauges offering different outlooks. WPI...
Third Time’s a Charm; California versus Iowa; State Run Economy
Third Time’s a Charm After losing appeals before the Ninth and Eleventh Courts of Appeal, Bayer won a unanimous decision from the Third Circuit Court that the company did not err by not labeling Roundup as a carcinogen. The Court ruled that primacy for labeling pesticides is the Federal I...
Vietnam FTA; Debt versus Efficiency; Gallows Humor
Vietnam FTA USDA’s Foreign Agricultural Service notes that the U.S. is the largest trading partner with Vietnam that lacks a free trade agreement. The result is that U.S. farm product exporters continue to lose market share, especially in higher valued goods. At the same time, Vietnam&rsq...
Leverage at all Cost; NZ Joins Modern Era
Leverage at all Cost Activists have asked the Biden Administration to end the use of economic sanctions against other countries, saying they amount to a collective punishment of civilians. They acknowledge that it is not going away. In fact, all governments use every tool of leverage they can o...
Balancing Offense and Defense; Border Measures; Economic Returns from Sport
Balancing Offense and Defense All growers of all crops are not necessarily competitive even in a large agriculture country. Major U.S. row crop growers have asked USTR to ensure that the Americas Partnership for Economic Prosperity (APEP) provide greater market access for their products. By con...
Politics and Trade; EU Livestock to Get Smaller
Politics and Trade Democratic Presidential candidate Kamala Harris picked Minnesota Governor Tim Walz to be her vice president nominee on the ticket and he reveals the divide on trade for politicians. Representing a Midwest agricultural state, Walz has been a supporter of expanding overseas mar...
RAPP versus Exchange Rate
USDA is making another $300 million available to U.S. agricultural export marketers under the Regional Agricultural Promotion Program (RAPP). The program was launched in 2023 with $1.2 billion from the Commodity Credit Corporation and is in addition to other cost-share export assistance efforts...
Ideas for Sustenance
Too long; didn’t read, so summarized here. Successful Farming: Farmers are trying new things. We are looking at the data from new harvest methods, changing plant spacings, row spacings, and populations. The fertility program gets pushed later and later. We rotate grazing and diversi...
Trade Influences
Although the Biden Administration is pushing quasi-trade agreements like APEP and IPEF, they are only expected to impact the movement of goods and services on the margin, if at all. Both President Biden and former President Donald Trump recognize that most Americans now believe that the U.S. lo...
Record Plunge in Farm Income
Tyne Morgan of the U.S. Farm Report points out that U.S. farm income is facing its largest drop in value in 2024 and its largest ever two year drop in real value when adding 2023 to the calculus. It is a $90 billion drop in two years and farmers appear to be holding on to their supplies in hope...
Activists Lose; AI Hurdles; Chevron and Biofuels
Activists Lose As of this week, there are 136 statewide ballot measures to be voted on this November in 39 different states. That is down more than 15 percent from the average for an even-numbered year election. Notably, there are no initiatives being considered that relate to activists’...
A Buffet of Thoughts
Summarized policy ideas under current debate. Technology Revolutions: The U.S. has not missed many (computers, space, nuclear power, semiconductors, solar, the internet, fracking, genetics, AI) but it has been late to the battery revolution. Economist Noah Smith Transatlantic Trade War: T...
GMO’s 50 Years On
More than 50 years after direct genetic modification was first identified, and nearly three decades after GMO crop production began in the U.S., it is still a controversial technology in many parts of the world. Opposition to GMO’s remains strong in Africa where just four countries have a...
FOMC Preview
The Federal Reserve starts its July meeting tomorrow and has now received the last key data. The Personal Consumption Expenditure (PCE) prices – the Fed’s preferred inflation measure – rose 0.1 percent in June and is up 2.5 percent in the past year compared to a 3.2 percent ga...
Friday Shorts
Non-Meat: In a first, a Europe-based company has sought EU approval to market lab-grown meat, in this case fake foie gras. Some member states have already banned such products. While lab-grown meat remains expensive, and plant-based meat substitutes have faced declining popularity, the increase...
Trump versus Harris Trade Policy; Africa Shines; Trade and the Environment
Trump versus Harris Trade Policy While trade policy analysts assess the future of their vocation under either a Trump or Harris presidency, there is not a lot of uncertainty. Mr. Trump has already advertised his intentions to raise tariffs. He views the U.S. trade deficit as the barometer of ho...
U.S. Policy Battle; WTO Policy Battle; EU Policy Battle
U.S. Policy Battle The two major parties are past the battle over President Biden’s age and should move on to the policy differences. Democrats will try to take their own problem of Biden’s age and apply it to Trump but it is likely to have less salience. Instead, the election will...
Weekend Reading Insights
Because the information superhighway is tl;dr, we did the work for you and summarized the most relevant. Economic Growth: It is not just the result of building tangible things but making use of new ideas. It is relentless technological progress. Economist Daniel Susskind Trade Flows: Water foll...
Doubling Down on Protectionism; Conflicting CAP Goals
Doubling Down on Protectionism Typically, the party platforms crafted every four years by Republicans and Democrats are equally meaningless. Some of their policy prescriptions become codified but many do not. But speakers at this week’s Republican Convention are leaving no doubt that &ldq...
No Olive Branch; Farm Price Charade
No Olive Branch In 2018, the U.S. began imposing 30-44 percent antidumping and countervailing duties on ripe olives originating in Spain. The EU was aghast since it implied that farm payments could be countervailed. Brussels challenged the duties in the WTO dispute settlement process and won. T...
Food Security Angst; More Trade Agreements; Ag Regains EU Power
Food Security Angst Norway announced that it would spend $6 million a year for five years to build up a 60–75-thousand-ton grain reserve, or a three-month supply. The head of the Olam agricultural trading warned of a potential future food war. Supply chains are fragile, countries are erec...
Farm Bill Reassessment; Von der Leyen Threads Needle; Trade Agreements are Dead
Farm Bill Reassessment The chance of reauthorizing the farm bill this year was already looking unlikely but now it has shifted that way for new reasons. A House Agriculture Committee approved bill pleased farm groups but faced a gauntlet from food assistance groups and others on the political l...
PRC GMO in USA; Food Aid Dependency; CFTC Musical Chairs
PRC GMO in USA Members of Congress on the House Select Committee on China are furious at USDA for moving forward with approval of a biotech soybean developed by China’s QiBiodesign. China has refused to approve for domestic planting GMO’s that have been develop by Western companies...
U.S. Talk Representative; EUDR Expansion; Hungary Tanks Innovation; Russia Bolsters CAP
U.S. Talk Representative The Generalized System of Preferences (GSP) that grants duty free access to products from poorer countries expired almost four years ago. The African Growth and Opportunity Act (AGOA), which provides similar nonreciprocal preferential access to the U.S. market but aimed...
Trade Barriers or Facilitation; Ag Rises in EU; Biden Regs
Trade Barriers or Facilitiation The WTO reported that its monitoring of various countries evidences that members are introducing more trade-facilitating policies than they are trade-restrictive measures. It only seems unreal because the trade restrictive practices receive more media attention...
Capital Investment and Productivity
While much of the focus on Europe relates to political instability in the EU, and threats from Russia, there are ample economic issues that also need to be addressed. This is true in both industrial production and agricultural output. European farms continue to lag their American counterparts i...
Transatlantic Monopsonists; Ex-Im Battle Continues
Transatlantic Monopsonists The three coalition partners (EPP, S&D, Renew) set to continue running the EU cannot agree on a sustainability agenda since the Greens got trounced in recent elections but they do agree on farmers. Specifically, they agree that farmers do not get “fair&rdquo...
Corn for Cars; Squeezed Between Two Labors
Corn for Cars Incoming Mexican agriculture minister Julio Berdegue said his country’s new government will not reduce imports of (GMO) yellow corn, but will make self-sufficiency in white corn a priority. Others suggested GMO white corn will continue to be restricted no matter the verdict...
Summary of Weekend Reads
Back by popular demand. Hang on to your seat, this is a whirlwind review of this past summer weekend’s beach reads. Taxes: One of former President Donald Trump’s signature accomplishments was the 2017 Tax Cuts and Jobs Act (TCJA), which his opponents derided for cutting the taxes of...
Technology Ignores Regulators; Two Records in One Year
Technology Ignores Regulators Perhaps as expected, EU member states failed to agree to the latest compromise language on allowing the development of new genomic techniques. Meanwhile, researchers at the University of Sydney have developed a gene editing tool, seekRNA, that could provide higher...
Mixed Action for U.S. Exporters; Attacking American Citizens
Mixed Action for U.S. Exporters The Biden Administration announced an initiative to boost U.S. business opportunities abroad. The effort will be led by the State Department, USTR, and the Commerce Department. No USDA. American industry has long run trade deficits but now agriculture has slipped...
NGT Test this Week; New Mexican Authorities
NGT Test this Week The Belgian presidency of the EU will make its last effort to obtain approval of a regulatory proposal for new genomic techniques. If it fails, the effort will be passed along to the Hungarian presidency that begins in July. Chances are, it will fail despite being watered dow...
Poor Feed for the Golden Goose; Disingenuous Argument
Poor Feed for the Golden Goose Most people understand basic economics, but not all the subtleties of its principles. Competition makes sense, unless someone says it’s unfair. Some politicians trying to lead America out of its muddle, which is to say the octogenarian “leadership,&rdq...
Tight Margins Prevent Disruption; Hungary Isn’t Hungry; Two-Tiered Pricing
Tight Margins Prevent Disruption While populist politicians complain about corporate greed, the businesses with long term success in agriculture achieve their success via tight margins. Bloomberg notes that upstarts in the “agrifoodtech” space like Farmers Edge Inc. and Gro Intellig...
Cutting Food Waste; Conflicting Approaches
Cutting Food Waste USDA issued a national strategy yesterday that aims to cut food waste by 50 percent by 2030. According to the agency, food waste in the U.S. involves a third of the supply. There are many reasons why this is concerning and USDA has proposed many remediation steps along the su...
Farm Bill Prospects; Transatlantic Reverberations; Trade Policy Disconnect
Farm Bill Prospects Although the odds are long, there are some political dynamics that benefit the completion of a farm bill. Republicans barely control the House, but they have the potential to complete passage of a bill in that body. Democrats barely control the Senate, but there are Democrat...
Food as National Security; Food Policy and Climate Change
Food as National Security Journalists like Greg Ip and Noah Smith have identified the West’s trifecta of tools to counter China: industrial policy, export controls, and tariffs. They note another needed factor, unified western economics, but acknowledge it is difficult to achieve. Other f...
Immigration Tariffs?
At a campaign event in Arizona, former President Trump floated the idea of using tariffs on countries who don’t cooperate with the U.S. on illegal immigration, and specifically, those countries taking back citizens who illegally immigrate into the U.S. While most illegal immigration...
Goodbye Green Deal/F2F; Unfarming California
Goodbye Green Deal/F2F The EU’s ruling elites are still assessing the impacts of yesterday’s victories by conservative parties that they had derisively called “far right,” anti-democratic, and anti-EU ahead of the election. The results and especially the loss by the Gree...
Mixed Jobs Report, Higher Manufacturing, and Next Week’s Fed Meeting
Today’s jobs report indicated that total non-farm payrolls rose 272,000 in May, easily beating the consensus pre-report expectation of 180,000. Total hours worked in May rose 0.2 percent and are up 1.3 percent from a year ago. Average hourly earnings increased 0.4 percent and are up 4.1 p...
Silly International Bureaucrat
UN Secretary General António Guterres has called fossil fuel firms the “grandfathers of climate chaos” and argues that advertising limits like those imposed on tobacco should be applied to the fossil fuel industry as well. Unlike tobacco, energy is a demand inelastic necessit...
Farm Bill Prognosis; Reciprocity with Canada
Farm Bill Prognosis A recent survey of economists indicated most do not believe a new U.S. farm bill will be enacted this year. Some speculated it would be 2025, and still others thought 2026. The 2018 Farm Bill is currently on extensions that expire later this year. The Senate Agriculture Comm...
U.S. – Brazil Dialogue; Tone Deaf in Europe
U.S. – Brazil Dialogue The 22nd Plenary of the U.S. – Brazil Commercial Dialogue will be held in September to discuss reducing non-tariff barriers. However, some of the larger issues between the two countries should include tariffs and foreign policy. Brazil maintains an 18 percent...
From Weekend Reading
In addition to attacking China, populist politicians on both the American right and left are finding audience encouragement when they attack big companies. Business is going to have to spend more on politics if they are to avoid getting slaughtered. Farm subsidies will not be disciplined...
Friday Policy Roundup
Brussels versus Beijing: Beijing may launch an investigation into whether the EU is dumping pork into China. Brussels opened an anti-dumping probe on vanillin from China. France, Germany, and the Netherlands want an enforcement mechanism to ensure that used cooking oil imported from China for b...
Whither U.S. Trade Policy
May is World Trade Month and President Biden declared last week World Trade Week. USDA described it as the perfect opportunity to highlight the importance of trade to the farm sector and to the nation. However, most of the private sector free trade wonks spent the time reading former WTO offici...
Food Price Improvements
USDA’s Economic Research Service issued its updated forecast for food-related inflation in 2024 and for the most part it involves good news. Year-to-date consumer food price inflation is below the 20-year historical average (2004-2023) and is likely to stay that way. Meat and poultry pric...
Friday Policy Shorts
Standards not Tariffs: The complaint against China and some other countries is that production practices are more highly distorted by government policies than in the West. The Biden Administration and former President Donald Trump look to tariffs to solve the problem. By contrast, the EU erects...
Senate Would Reject Obama; Europe Lives on Crisps
Trade and Commerce Divide; Genetic Divide
Trade and Commerce Divide Populist Congresswoman Rosa DeLauro (D-Connecticut) wants her Democratic colleagues to undermine corporate America by disrupting trade negotiations and removing investor state protections. The Biden Administration has already mostly stalled industry’s desire for...
Breaking Eggs with Poor Math
Activists have been pressuring the Biden Administration to take more action against Big Ag. The latest is an attack on egg production. Opponents are blaming the spread of avian influenza (AI) and the high cost of eggs on what they claim is 110 billion eggs produced on just 347 farms. They asser...
Status of Global Ag
USDA’s Economic Research Service has produced an expansive study entitled, World Agricultural Production, Resource Use, and Productivity, 1961–2020. Its authors examined the period and despite activists calling the food system broken, the researchers emphasized some key successes:&n...
Ultra-Processed Dog Food; Antidumping is Legal
Ultra-Processed Dog Food The number of pets spiked during COVID but the overall trend has been more domestic animals and fewer human babies. Pets are lower cost than children but the pet industry knows there is still a lot of disposable income to be made off the furry members of the family. Whi...
China Retaliation?; WTO Dispute System Not Urgent
China Retaliation? The assumption is that China will retaliate against U.S. agriculture for any new tariffs applied to Chinese goods by President Biden under Section 301. But at least one American expert on China doesn’t think that is a given. Under this construct, Beijing views the new t...
Transatlantic Glue
China understandably responded harshly to the Biden Administration’s sharp increase in tariffs on EV’s and components. However, there is not much that Beijing can do about it except retaliate. The EU already shared Washington’s angst about China undermining Western industries...
Tariff Man’s Competitor; Europe Correctly Fears Trump
Tariff Man’s Competitor Former President Donald Trump prided himself on his use of tariffs, which candidate Biden criticized but now President Biden fully embraces. In fact, he is proclaiming his own new tariffs on $18 billion worth of Chinese goods and calling them “historic.&rdquo...
Atmanirbhar Bharat Abhiyan
U.S. agriculture representatives returning from a trade mission to India are all excited about their prospects for boosting sales to the world’s most populous country. They are likely suffering from what the great psychologist and behavioral economist Daniel Kahneman called focusing illus...
Psychobiotic Nonsense; SPS/TBT and Poultry
Psychobiotic Nonsense One component of a book called The Psychobiotic Revolution is scientifically reasonable – that the human gut biome contains trillions of beneficial microbes. And that disturbing that biome can have adverse effects on physical and mental health. One more reasonable th...
Grossly Modified Opinion; BRICS Grain Exchange
Grossly Modified Opinion While the European Parliament’s plan for regulating New Genomic Traits (NGT’s) provides a lighter regulatory treatment for NTG-1 products, its associated labeling requirements will be exploited by the anti-GMO crowd. U.S. regulatory agencies are planning to...
Flimsy Arguments; Bien SUR Pesticides
Flimsy Arguments Certain Americans are taking sides with Hamas in Gaza, arguing that it is Israel to blame. In a similar fashion, progressive groups focused on agriculture are calling on Washington to cease its bullying of Mexico on GMO corn. They defend Mexico City for pursuing “food sov...
Remake Agriculture for the Climate; Counter-Notifying India; Plurilateral Path
Remake Agriculture for the Climate The World Bank has issued a report on achieving net zero emissions in the agrifood system (Recipe for a Livable Planet) that cites the sector for being a big emitter, but also one that can achieve reductions at a relatively low-cost. It makes the usual recomme...
Having Cake and Eat it Too; Philippine Opportunity
Having Cake and Eat it Too The U.S. is a major food exporter and its sales to India are relatively small and steady due to the border measures it encounters. By contrast, India demands the right to high border measures due to it being a poor country with food insecurity, despite the fact it exp...
Geographic Food Price Differences
Eastern European countries were upset a few years ago when it was discovered that food marketers were retailing lower quality foods in their region of Europe versus countries in the west. Price was not discussed but that differentiation would have followed willingness to pay and the fact that m...