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...
Circling the Corral; Un-deglobalizing
Circling the Corral Florida now bans the marketing of cultivated meat. Florida Governor Ron DeSantis said lab-grown meat was a threat to the state’s beef cattle industry, the ninth largest in the country. The National Cattlemen’s Beef Association has limited its demands to just have...
Food is First Victim; Energy Confusion
Food is First Victim Food comprises just 6 percent of all U.S. exports, but it is the first to receive retaliation in trade disputes. The latest example is Israel’s war with Hamas, though it is American food brands that are taking it on the chin. KFC has had to close 100 outlets in Malays...
Egyptian Food Inflation
Bread is a critical basic food in Egypt and Russia has been a prime supplier. But Russian wheat prices have been rising, and now two shiploads of the commodity are delayed departing for Egypt. President Abdel Fattah al-Sisi has a tight grip over the military and the government, but war on the b...
Policy Shorts
Fertilizer Supplies: The U.S. Department of Commerce is recommending reduced tariffs on fertilizer imported from Russia, but increased duties on supplies from Morocco. U.S. farmers have been asking for relaxing supply constraints from Russia. The U.S. imports about 20 percent of its fertilizer...
Carbon Wars; Teeing up Taiwan
Carbon Wars The EU is moving forward with its plans for a Carbon Border Adjustment Mechanism (CBAM), and with its EU Deforestation Regulation. Despite claims to handling domestic and imported products equally as required under the WTO’s national treatment obligation, there will be plenty...
Q1 GDP Comes in Low, Interest Rate Expected to Stay High
The Q1 2024 GDP was 1.6 percent, well below the pre-report consensus expectation of 2.4 percent, and down from 3.1 percent in Q1 2023 and 3.4 percent in Q4 2023. That rate was the slowest in almost two years, dating back to Q2 2022. Recall that in the 2 February Ag Perspectives report on...
U.S. Consumer Spending, Financial Health Supports 2024 Economic Outlook
As WPI readers likely well know by now, U.S. gross domestic product (GDP) grew at an inflation- and seasonally-adjusted 1.6 percent rate in Q1 2024, which missed economist’s 2.4 percent expectations. The data sent shockwaves through U.S. financial markets with U.S. stocks and bonds openin...
Most Apparent Solution; Future is Biotech
Most Apparent Solution The EU’s organic sector wants the bloc’s officials to take more action to ensure they achieve the target of 25 percent of agricultural output being organic by 2030. Specifically, they want a campaign to increase consumer demand for organic food so that organic...
Reigniting a Transatlantic Deal; Indian Powerhouse; “Barons” is Bombastic
Reigniting a Transatlantic Deal Former Italian prime minister Enrico Letta is something of a policy rock star after authoring a report on the future strategy for the EU. Most of the 146-page report focuses on strengthening the EU’s internal Single Market but, buried at the end of th...
Hecho en Mexico; Radical for Small; Impeach Tai?
Hecho en Mexico While outgoing Mexican president and populist AMLO tries to shutdown American farmers, the U.S. government just keeps giving to Mexico. The de minimis duty is about to go away. The personal free import allowance is complex. Most American citizens reentering the country think of...
Trading Waste; Ottawa versus Manila; Politician’s Lag
Trading Waste Rich Westerners consumed so much plastic that even though landfills take much of it, their export of plastic waste now overwhelms Asia. Then Western policymakers gave yellow grease (used cooking oil) a very low carbon score for use as energy since it is a form of recycling. With h...
Transatlantic GI’ing Consumers; Political Expediency, Oh My
Transatlantic GI’ing Consumers Politicians on both sides of the Atlantic protest big business and their sacrilegious capitalism. Yet sometimes it is government screwing the consumer to boost private profits. Parmigiano Reggiano was a prized and premium priced cheese before obtaining the E...
Biden-Trump on Trade Policy
A Washington International Trade Association discussion on trade policy with former officials from both the Trump and Biden administrations reinforced the bipartisan agreement on some trade policies. A day after House GOP representatives slammed USTR Katherine Tai for the Biden Administration&r...
Supply Chain Diversity; Clean Hands?; Bipolar Politics
Supply Chain Diversity EU policy experts have assembled a tome on the “State of Food Security in the EU.” The biannual report focuses on how to ensure food security in times of crisis. The authors highlight the growing concerns about extreme adverse weather events in the EU. They lo...
Sparks to Fly; Selective Competitiveness; Fixing India
Sparks to Fly U.S. Trade Representative Katherine Tai appears before House and Senate committees this week to testify on the Biden Administration’s 2024 trade policy. Over the past three years, the Office of U.S. Trade Representative has slow walked trade policy changes, focusing on labor...
Higher Interest Rates to Stay
This week’s inflation reports have added some turbulence to the Federal Reserve’s approach to bringing the economy in for a soft landing. The Fed started an unprecedented set of rate hikes to the federal funds rate in Q2 2022 that helped tame inflation through Q3 2024. T...
Wrong at the Top; Happy Talk
Wrong at the Top We admit as private policy analysts that sometimes we add 1+1 and get three. It turns out top government officials can make the same mistake. USDA Secretary Tom Vilsack had mused aloud that China could be buying Brazilian corn and not U.S. corn in retaliation for state-level re...
Commodity Trading Earns
Last year, the value of oil, energy, and agricultural commodities all fell. This caused reduced earnings at some large trading firms but, according to McKinsey, overall earnings in the sector rise at an average 1.5 percent per year and reached $104 billion last year. The value was sufficient to...
Food and IT Arrogance; Intentional Trade Policy
Food and IT Arrogance The EU was supposed to issue an updated “protein strategy” early this year but it has been postponed until perhaps late this summer. Its political leaders are flustered that two-thirds of the Continent’s high-quality protein and most of its soybeans are i...
Outcomes Not Competition; Fair, Individually Sustainable
Outcomes Not Competition Darwin’s “survival of the fittest” and Ricardo’s “comparative advantage” are so century before last. Instead of a dog-eat-dog world, the Biden Administration’s diversity, equity and inclusion approach is coming after anyth...
Job Data from March
The March labor market report was released last week, and both the report and the revisions for prior months were positive news on the employment front. However, those holding out for a cut in interest rates may have to be more patient after the strong jobs numbers. Nonfarm payrolls rose...
Non-Trade Representative; FDI Environment
Non-Trade Representative U.S. Trade Representative Katherine Tai is a lawyer by training, not an economist – and it shows. She is blaming globalization and the competition that entails for forcing “harmful” consolidation of businesses in the U.S. and abroad. Economists would n...
AI and Ag; Currency Concerns
AI and Ag Public policy on artificial intelligence is a tricky topic. On the one hand, policymakers are trying to avoid their worst fears about its potential impacts, at the same time there is a geopolitical Cold War level race for data dominance. An overly precautionary approach would kill the...
Debt Burden Impacts
Equities closed mixed for the day with gold up another 1.5 percent, the dollar down, oil and corn ended higher. Some large market players are concerned that going into this year’s U.S. elections, both major political parties are ignoring the rising national debt. Treasury Secretary Janet...
Trade Negotiation Calendar; NTE Concerns
Trade Negotiation Calendar This week will include U.S. and EU officials gathering in Brussels for the sixth, and potentially last session of the Trade and Technology Council. There will reportedly be agreements on AI, 6G and the microchip supply chain. Meanwhile, U.S. and Kenyan officials hold...
Divergent Perspectives
China doesn’t offer the best business environment for American companies and FDI has plummeted. But Xi Jinping told CEO’s that his country will continue building a “first class business environment.” Meanwhile, Joe Biden tells American companies that they are monopolies...
BRICS Grain Exchange; EU Policy Foibles; Yen Implosion
BRICS Grain Exchange Russia is reportedly pushing other BRICS members to use the bloc as a grain exchange in competition with the West. The assertion is that these countries already control 42 percent of the grain trade. Add the new members like Egypt, Saudi Arabia, Iran and the UAE, plus other...
Factless Nostalgia; Cash is King
Factless Nostalgia There is yet another crusader against the modern agrifood system. This time it is Austin Frerick, who claims authenticity due to his Iowa roots but he is just another Ivy League university (Yale) pontificator hollering from the ivory tower. His book, “Barons,” com...
Revising Down the Economy
We’ve now had a couple of months in 2024 where economic report revisions have come in, and they have been significant. This has changed the outlook on the economy from bullish during the last part of 2023 and January, to now being more uncertain. First, the February payroll report s...
Fixing the WTO; The Winner is Ag
Fixing the WTO The 13th Ministerial Conference last month in Abu Dhabi was yet another failure by the WTO. Now Singapore has proposed a retreat to discuss fundamental fixes needed to stop the long string of failures. Ultimately, the structural problems of the WTO involve one country, one vote a...
Fake Meat Fight; Transatlantic Mutuality; Biofuel Instead of Food
Fake Meat Fight Some western state U.S. Senate Democrats are in tough reelection positions and need to show their distance from President Biden. Following SPS protocols, President Biden recently approved imports of beef from Paraguay. Today the Senate passed a resolution overturning the Preside...
Policy Shorts
India Paradox: A new report using the Modified Mixed Recall Period shows that over the past decade, India matched China’s success in the decade before in eliminating extreme poverty. It has not experienced the same growth in GDP, but its programs and policies made progress. At the same ti...
Trade Negotiation Calculation; UTP = You and Me; Real and Imagined
Trade Negotiation Calculation The WTO’s dispute settlement system and new multilateral trade negotiations fail from the perspective of Donald Trump and now Joe Biden because they put all parties on equal footing. This means the U.S. loses its asymmetric advantage of being an economic and...
Cahiers Redux – Politicians Recoil
The Cahiers de doléances [or kaje for short] were the pre-French revolution (1789) lists of societal complaints. The collective disappointments of the clergy, the nobility, and the rest of society too. Nothing has changed. Documents of the time cite the criticisms as: government waste, i...
Big is Bad; Big is Uncertain; Texas is Big
Big is Bad President Joe Biden has a popular proposal, increase taxes on less than 800 billionaires in the U.S. If some people worry about politics for sale, it still takes votes. Sometimes that happens within a class. Divide and conquer. The EU’s proposed relaxation of GAEC production ob...
Squeaky Wheel; EATS Ugly
Squeaky Wheels Farmers in Europe have been on a rampage for months and it is good that EU political leaders are responding to the complaints. Squeaky wheels get the grease because they are high-pitched and shrill, but sometimes grease is not the cure and instead it requires a whole new set of b...
China’s Veiled Data; Unveiled Livestock Emissions
China’s Veiled Data Some agricultural analysts in the West have noted that Chinese data reporting in the sector can go missing, fail to be consistent, or be even outright false in order to better comport with Beijing’s policy mandates. Now the Financial Times notes that the problem...
Bogus Problem; Radicalism Backlash
Bogus Problem Reinforcing the problem asserted by USDA’s political leadership, the Economic Research Service highlighted Census of Agriculture data showing that most losses of farms over the past decade have been small operations, while there was an increase in the largest sized farms. Se...
Biden Dictates Prices; Dictating Standards; Dictating to Meat
Biden Dictates Prices President Joe Biden tried to position himself in last night’s State of the Union address as the bulwark against the rising tide of threats to democracy. Then he dictated to the banking industry how much they can charge for credit card late fees, threatened action aga...
Food Wins; Stating the Obvious
Food Wins Commercial food workers hate fast line speeds at meat processors because it makes them work harder and reduces the required number of workers. Animal rights activists hate faster line speeds at meat packers because more animals get slaughtered. The Biden Administration is certainly su...
Katy Bar the Door; Pursuing Food Sovereignty; USMCA Expansion
Katy Bar the Door Malaysia had filed a WTO dispute settlement case against the EU’s Renewable Energy Directive, arguing it is prejudicil in limiting the amount of imported palm oil that could qualify under the scheme. Brussels has pursued other ways to limit imports of palm oil from South...
White House Hypocrisy; Support for Thailand; Green Protectionism; The Real Foe
White House Hypocrisy The economy, and specifically inflation, is one of four top issues dogging President Biden’s reelection campaign and the White House has a solution. It is forming a multiagency “strike force” to curb “unfair and illegal” pricing. Most sellers...
MC13 Unsurprisingly Disappoints
USTR is spinning that progress was made at the WTO’s ministerial in Abu Dhabi that ended over the weekend, claiming progress on revitalizing the dispute settlement process, though arriving at no conclusion. There was an extension of the duty-free provision on ecommerce, though even that h...
Europe’s Mantel; Trade-less Trade Advisor
Europe’s Mantel Sans Viande: In three months, France will ban the use of “meat” when referring to meat alternative products. Since profits are in the adjective, meaning consumers will pay a premium for claims-based products such as geographic indicators, farmers in France have...
“Healthy” Food Slows Ag Approps
Last Friday, WPI reported on the status of the appropriations process; Congress has until Friday of this week to pass four appropriations bills, including the one funding agriculture and other agencies. If funding lapses, agencies like USDA will be unable to open on Monday 4 March. House Speake...
Data versus Rhetoric
Politico reports that President Biden wants to attack the U.S. food industry in his 7 March State of the Union address to Congress. He believes his Super Bowl attack on food companies for “shrinkflation” struck a chord with voters for its deceptive nature. Rather than raise prices,...
Market Commentary: Higher CBOT and Corn Reversal Deny Long-Run Bearish Outlook
The CBOT turned mostly higher to start the week amid some bullish fundamental developments and funds covering shorts after the market’s recent and wildly profitable plunge lower. Corn was the upside leader with the May contract posting a bullish key reversal on the chart as export inspect...
Market Commentary: CBOT Decline Continues while Stocks Rally; EPA Confirms Summer E15 Sales
The CBOT was mostly lower again on Thursday with funds retaining their bearish grip on the markets and driving futures into the red. Despite adjustments to South American crop expectations, corn and soybean markets are reacting to overall favorable production conditions and the looming crops th...
Cost of Deception; Trade and Politics; Political Constituencies
Cost of Deception President Joe Biden like other politicians thought he made a clever calculation when he recent;ly blamed food processors for inflation in the sector. As he scorned, “The American public is tired of being played for suckers…I’ve had enough of what they call s...
German Broken Window Theory; Mixed Ethanol Policies; Future of Food
German Broken Window Theory At this past weekend’s Munich Security Conference, German Defense Minister Boris Pistorius said U.S. defense contractors and the American economy would benefit from spending more money helping Ukraine defend itself against Russia. Biden economic adviser Lael Br...
International Agency Capture; Running Out of Crap; Vilsack Shines
International Agency Capture Regulatory capture occurs when a policymaker or regulator is co-opted to serve the interests of a minor constituency. That capture has now occurred to two international agencies, the WTO and the IEA. The WTO is dysfunctional because it has been recast as a developme...
More Subsidies for Scale; APEP Trade; African Humor
More Subsidies for Scale The Biden Administration blames large meat packers for higher consumer prices. Its solution has been to subsidize the startup of small meat packers with grants (Value-Added Producer Grants) and loans. The program has been a smashing success. Over the past year the avera...
Census of Ag Summary – Same Trends Continue
USDA released the latest Census of Agriculture today. Typically, the release is every five years, so this is the 2022 census, updated from 2017. The response rate to the 2022 census was 61 percent; in 2017 it was 72 percent. Total farm sales in 2022, a year of record farm income, were $54...
Farm Bill Lacks Gravitas; Paying for Change
Farm Bill Lacks Gravitas Farmer protests appear to be exploding everywhere. Of course, in Europe where it is part of the profession. But in India as well where farmers are demanding higher minimum support process. Farmers in the U.S. also want higher guarantees for farm income. Commodity prices...
Farmer/Green Divide
The recent policy reversal in Europe on environmental obligations for farmers is not being welcomed by everyone. Greenpeace warns that excluding farms from emission reductions will ultimately hurt farmers as their crops fail under the burden of climate change. They are also warning that farmers...
The Ashes of EU’s Greens; Redefining Consensus
The Ashes of EU’s Greens There is a lot of finger-pointing in Brussels over responsibility for originally drafting the Green Deal/Farm to Fork debacle, and now its withdrawal. The political nature of the whole exercise was illustrated by EU President Ursula von der Leyen’s rationale...
EU Sobers Up
The EU’s political leaders have made dramatic policy reversals in recent days that reflect a more reasoned approach than in the past. As noted previously, they have scrapped some of the Green Deal/Farm to Fork requirements like quitting pesticides, and today the EU Parliament (EP) approve...
Tariffs are Coming; EU Politicians Cave; Unbridgeable Differences; Flawed Science Bias
Tariffs are Coming While U.S. presidential candidate Donald Trump has promised more tariffs if he is elected, border measures against China are likely regardless of this year’s winner of the White House. China has ramped up bank credits to producers of EV’s, batteries, solar, and mi...
Fed Holds Rates: Looking for Confidence Moving Forward
The Federal Reserve left the federal funds rate unchanged this week at the latest meeting of the Federal Open Market Committee (FOMC). As WPI reported on 23 January, … the Federal Funds futures market was pricing in a more than 97 percent chance of the Fed leaving rates uncha...
Bidenomics Analysis; Dollar versus Yuan
Bidenomics Analysis Inflation has helped make President Joe Biden unpopular and he’s fighting back with the accusation of “price gouging” by the grocery business. Food inflation remains stubbornly high but not because of grocery store greed. Grocery store operating profits are...
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...
Circling the Corral; Un-deglobalizing
Circling the Corral Florida now bans the marketing of cultivated meat. Florida Governor Ron DeSantis said lab-grown meat was a threat to the state’s beef cattle industry, the ninth largest in the country. The National Cattlemen’s Beef Association has limited its demands to just have...
Food is First Victim; Energy Confusion
Food is First Victim Food comprises just 6 percent of all U.S. exports, but it is the first to receive retaliation in trade disputes. The latest example is Israel’s war with Hamas, though it is American food brands that are taking it on the chin. KFC has had to close 100 outlets in Malays...
Egyptian Food Inflation
Bread is a critical basic food in Egypt and Russia has been a prime supplier. But Russian wheat prices have been rising, and now two shiploads of the commodity are delayed departing for Egypt. President Abdel Fattah al-Sisi has a tight grip over the military and the government, but war on the b...
Policy Shorts
Fertilizer Supplies: The U.S. Department of Commerce is recommending reduced tariffs on fertilizer imported from Russia, but increased duties on supplies from Morocco. U.S. farmers have been asking for relaxing supply constraints from Russia. The U.S. imports about 20 percent of its fertilizer...
Carbon Wars; Teeing up Taiwan
Carbon Wars The EU is moving forward with its plans for a Carbon Border Adjustment Mechanism (CBAM), and with its EU Deforestation Regulation. Despite claims to handling domestic and imported products equally as required under the WTO’s national treatment obligation, there will be plenty...
Q1 GDP Comes in Low, Interest Rate Expected to Stay High
The Q1 2024 GDP was 1.6 percent, well below the pre-report consensus expectation of 2.4 percent, and down from 3.1 percent in Q1 2023 and 3.4 percent in Q4 2023. That rate was the slowest in almost two years, dating back to Q2 2022. Recall that in the 2 February Ag Perspectives report on...
U.S. Consumer Spending, Financial Health Supports 2024 Economic Outlook
As WPI readers likely well know by now, U.S. gross domestic product (GDP) grew at an inflation- and seasonally-adjusted 1.6 percent rate in Q1 2024, which missed economist’s 2.4 percent expectations. The data sent shockwaves through U.S. financial markets with U.S. stocks and bonds openin...
Most Apparent Solution; Future is Biotech
Most Apparent Solution The EU’s organic sector wants the bloc’s officials to take more action to ensure they achieve the target of 25 percent of agricultural output being organic by 2030. Specifically, they want a campaign to increase consumer demand for organic food so that organic...
Reigniting a Transatlantic Deal; Indian Powerhouse; “Barons” is Bombastic
Reigniting a Transatlantic Deal Former Italian prime minister Enrico Letta is something of a policy rock star after authoring a report on the future strategy for the EU. Most of the 146-page report focuses on strengthening the EU’s internal Single Market but, buried at the end of th...
Hecho en Mexico; Radical for Small; Impeach Tai?
Hecho en Mexico While outgoing Mexican president and populist AMLO tries to shutdown American farmers, the U.S. government just keeps giving to Mexico. The de minimis duty is about to go away. The personal free import allowance is complex. Most American citizens reentering the country think of...
Trading Waste; Ottawa versus Manila; Politician’s Lag
Trading Waste Rich Westerners consumed so much plastic that even though landfills take much of it, their export of plastic waste now overwhelms Asia. Then Western policymakers gave yellow grease (used cooking oil) a very low carbon score for use as energy since it is a form of recycling. With h...
Transatlantic GI’ing Consumers; Political Expediency, Oh My
Transatlantic GI’ing Consumers Politicians on both sides of the Atlantic protest big business and their sacrilegious capitalism. Yet sometimes it is government screwing the consumer to boost private profits. Parmigiano Reggiano was a prized and premium priced cheese before obtaining the E...
Biden-Trump on Trade Policy
A Washington International Trade Association discussion on trade policy with former officials from both the Trump and Biden administrations reinforced the bipartisan agreement on some trade policies. A day after House GOP representatives slammed USTR Katherine Tai for the Biden Administration&r...
Supply Chain Diversity; Clean Hands?; Bipolar Politics
Supply Chain Diversity EU policy experts have assembled a tome on the “State of Food Security in the EU.” The biannual report focuses on how to ensure food security in times of crisis. The authors highlight the growing concerns about extreme adverse weather events in the EU. They lo...
Sparks to Fly; Selective Competitiveness; Fixing India
Sparks to Fly U.S. Trade Representative Katherine Tai appears before House and Senate committees this week to testify on the Biden Administration’s 2024 trade policy. Over the past three years, the Office of U.S. Trade Representative has slow walked trade policy changes, focusing on labor...
Higher Interest Rates to Stay
This week’s inflation reports have added some turbulence to the Federal Reserve’s approach to bringing the economy in for a soft landing. The Fed started an unprecedented set of rate hikes to the federal funds rate in Q2 2022 that helped tame inflation through Q3 2024. T...
Wrong at the Top; Happy Talk
Wrong at the Top We admit as private policy analysts that sometimes we add 1+1 and get three. It turns out top government officials can make the same mistake. USDA Secretary Tom Vilsack had mused aloud that China could be buying Brazilian corn and not U.S. corn in retaliation for state-level re...
Commodity Trading Earns
Last year, the value of oil, energy, and agricultural commodities all fell. This caused reduced earnings at some large trading firms but, according to McKinsey, overall earnings in the sector rise at an average 1.5 percent per year and reached $104 billion last year. The value was sufficient to...
Food and IT Arrogance; Intentional Trade Policy
Food and IT Arrogance The EU was supposed to issue an updated “protein strategy” early this year but it has been postponed until perhaps late this summer. Its political leaders are flustered that two-thirds of the Continent’s high-quality protein and most of its soybeans are i...
Outcomes Not Competition; Fair, Individually Sustainable
Outcomes Not Competition Darwin’s “survival of the fittest” and Ricardo’s “comparative advantage” are so century before last. Instead of a dog-eat-dog world, the Biden Administration’s diversity, equity and inclusion approach is coming after anyth...
Job Data from March
The March labor market report was released last week, and both the report and the revisions for prior months were positive news on the employment front. However, those holding out for a cut in interest rates may have to be more patient after the strong jobs numbers. Nonfarm payrolls rose...
Non-Trade Representative; FDI Environment
Non-Trade Representative U.S. Trade Representative Katherine Tai is a lawyer by training, not an economist – and it shows. She is blaming globalization and the competition that entails for forcing “harmful” consolidation of businesses in the U.S. and abroad. Economists would n...
AI and Ag; Currency Concerns
AI and Ag Public policy on artificial intelligence is a tricky topic. On the one hand, policymakers are trying to avoid their worst fears about its potential impacts, at the same time there is a geopolitical Cold War level race for data dominance. An overly precautionary approach would kill the...
Debt Burden Impacts
Equities closed mixed for the day with gold up another 1.5 percent, the dollar down, oil and corn ended higher. Some large market players are concerned that going into this year’s U.S. elections, both major political parties are ignoring the rising national debt. Treasury Secretary Janet...
Trade Negotiation Calendar; NTE Concerns
Trade Negotiation Calendar This week will include U.S. and EU officials gathering in Brussels for the sixth, and potentially last session of the Trade and Technology Council. There will reportedly be agreements on AI, 6G and the microchip supply chain. Meanwhile, U.S. and Kenyan officials hold...
Divergent Perspectives
China doesn’t offer the best business environment for American companies and FDI has plummeted. But Xi Jinping told CEO’s that his country will continue building a “first class business environment.” Meanwhile, Joe Biden tells American companies that they are monopolies...
BRICS Grain Exchange; EU Policy Foibles; Yen Implosion
BRICS Grain Exchange Russia is reportedly pushing other BRICS members to use the bloc as a grain exchange in competition with the West. The assertion is that these countries already control 42 percent of the grain trade. Add the new members like Egypt, Saudi Arabia, Iran and the UAE, plus other...
Factless Nostalgia; Cash is King
Factless Nostalgia There is yet another crusader against the modern agrifood system. This time it is Austin Frerick, who claims authenticity due to his Iowa roots but he is just another Ivy League university (Yale) pontificator hollering from the ivory tower. His book, “Barons,” com...
Revising Down the Economy
We’ve now had a couple of months in 2024 where economic report revisions have come in, and they have been significant. This has changed the outlook on the economy from bullish during the last part of 2023 and January, to now being more uncertain. First, the February payroll report s...
Fixing the WTO; The Winner is Ag
Fixing the WTO The 13th Ministerial Conference last month in Abu Dhabi was yet another failure by the WTO. Now Singapore has proposed a retreat to discuss fundamental fixes needed to stop the long string of failures. Ultimately, the structural problems of the WTO involve one country, one vote a...
Fake Meat Fight; Transatlantic Mutuality; Biofuel Instead of Food
Fake Meat Fight Some western state U.S. Senate Democrats are in tough reelection positions and need to show their distance from President Biden. Following SPS protocols, President Biden recently approved imports of beef from Paraguay. Today the Senate passed a resolution overturning the Preside...
Policy Shorts
India Paradox: A new report using the Modified Mixed Recall Period shows that over the past decade, India matched China’s success in the decade before in eliminating extreme poverty. It has not experienced the same growth in GDP, but its programs and policies made progress. At the same ti...
Trade Negotiation Calculation; UTP = You and Me; Real and Imagined
Trade Negotiation Calculation The WTO’s dispute settlement system and new multilateral trade negotiations fail from the perspective of Donald Trump and now Joe Biden because they put all parties on equal footing. This means the U.S. loses its asymmetric advantage of being an economic and...
Cahiers Redux – Politicians Recoil
The Cahiers de doléances [or kaje for short] were the pre-French revolution (1789) lists of societal complaints. The collective disappointments of the clergy, the nobility, and the rest of society too. Nothing has changed. Documents of the time cite the criticisms as: government waste, i...
Big is Bad; Big is Uncertain; Texas is Big
Big is Bad President Joe Biden has a popular proposal, increase taxes on less than 800 billionaires in the U.S. If some people worry about politics for sale, it still takes votes. Sometimes that happens within a class. Divide and conquer. The EU’s proposed relaxation of GAEC production ob...
Squeaky Wheel; EATS Ugly
Squeaky Wheels Farmers in Europe have been on a rampage for months and it is good that EU political leaders are responding to the complaints. Squeaky wheels get the grease because they are high-pitched and shrill, but sometimes grease is not the cure and instead it requires a whole new set of b...
China’s Veiled Data; Unveiled Livestock Emissions
China’s Veiled Data Some agricultural analysts in the West have noted that Chinese data reporting in the sector can go missing, fail to be consistent, or be even outright false in order to better comport with Beijing’s policy mandates. Now the Financial Times notes that the problem...
Bogus Problem; Radicalism Backlash
Bogus Problem Reinforcing the problem asserted by USDA’s political leadership, the Economic Research Service highlighted Census of Agriculture data showing that most losses of farms over the past decade have been small operations, while there was an increase in the largest sized farms. Se...
Biden Dictates Prices; Dictating Standards; Dictating to Meat
Biden Dictates Prices President Joe Biden tried to position himself in last night’s State of the Union address as the bulwark against the rising tide of threats to democracy. Then he dictated to the banking industry how much they can charge for credit card late fees, threatened action aga...
Food Wins; Stating the Obvious
Food Wins Commercial food workers hate fast line speeds at meat processors because it makes them work harder and reduces the required number of workers. Animal rights activists hate faster line speeds at meat packers because more animals get slaughtered. The Biden Administration is certainly su...
Katy Bar the Door; Pursuing Food Sovereignty; USMCA Expansion
Katy Bar the Door Malaysia had filed a WTO dispute settlement case against the EU’s Renewable Energy Directive, arguing it is prejudicil in limiting the amount of imported palm oil that could qualify under the scheme. Brussels has pursued other ways to limit imports of palm oil from South...
White House Hypocrisy; Support for Thailand; Green Protectionism; The Real Foe
White House Hypocrisy The economy, and specifically inflation, is one of four top issues dogging President Biden’s reelection campaign and the White House has a solution. It is forming a multiagency “strike force” to curb “unfair and illegal” pricing. Most sellers...
MC13 Unsurprisingly Disappoints
USTR is spinning that progress was made at the WTO’s ministerial in Abu Dhabi that ended over the weekend, claiming progress on revitalizing the dispute settlement process, though arriving at no conclusion. There was an extension of the duty-free provision on ecommerce, though even that h...
Europe’s Mantel; Trade-less Trade Advisor
Europe’s Mantel Sans Viande: In three months, France will ban the use of “meat” when referring to meat alternative products. Since profits are in the adjective, meaning consumers will pay a premium for claims-based products such as geographic indicators, farmers in France have...
“Healthy” Food Slows Ag Approps
Last Friday, WPI reported on the status of the appropriations process; Congress has until Friday of this week to pass four appropriations bills, including the one funding agriculture and other agencies. If funding lapses, agencies like USDA will be unable to open on Monday 4 March. House Speake...
Data versus Rhetoric
Politico reports that President Biden wants to attack the U.S. food industry in his 7 March State of the Union address to Congress. He believes his Super Bowl attack on food companies for “shrinkflation” struck a chord with voters for its deceptive nature. Rather than raise prices,...
Market Commentary: Higher CBOT and Corn Reversal Deny Long-Run Bearish Outlook
The CBOT turned mostly higher to start the week amid some bullish fundamental developments and funds covering shorts after the market’s recent and wildly profitable plunge lower. Corn was the upside leader with the May contract posting a bullish key reversal on the chart as export inspect...
Market Commentary: CBOT Decline Continues while Stocks Rally; EPA Confirms Summer E15 Sales
The CBOT was mostly lower again on Thursday with funds retaining their bearish grip on the markets and driving futures into the red. Despite adjustments to South American crop expectations, corn and soybean markets are reacting to overall favorable production conditions and the looming crops th...
Cost of Deception; Trade and Politics; Political Constituencies
Cost of Deception President Joe Biden like other politicians thought he made a clever calculation when he recent;ly blamed food processors for inflation in the sector. As he scorned, “The American public is tired of being played for suckers…I’ve had enough of what they call s...
German Broken Window Theory; Mixed Ethanol Policies; Future of Food
German Broken Window Theory At this past weekend’s Munich Security Conference, German Defense Minister Boris Pistorius said U.S. defense contractors and the American economy would benefit from spending more money helping Ukraine defend itself against Russia. Biden economic adviser Lael Br...
International Agency Capture; Running Out of Crap; Vilsack Shines
International Agency Capture Regulatory capture occurs when a policymaker or regulator is co-opted to serve the interests of a minor constituency. That capture has now occurred to two international agencies, the WTO and the IEA. The WTO is dysfunctional because it has been recast as a developme...
More Subsidies for Scale; APEP Trade; African Humor
More Subsidies for Scale The Biden Administration blames large meat packers for higher consumer prices. Its solution has been to subsidize the startup of small meat packers with grants (Value-Added Producer Grants) and loans. The program has been a smashing success. Over the past year the avera...
Census of Ag Summary – Same Trends Continue
USDA released the latest Census of Agriculture today. Typically, the release is every five years, so this is the 2022 census, updated from 2017. The response rate to the 2022 census was 61 percent; in 2017 it was 72 percent. Total farm sales in 2022, a year of record farm income, were $54...
Farm Bill Lacks Gravitas; Paying for Change
Farm Bill Lacks Gravitas Farmer protests appear to be exploding everywhere. Of course, in Europe where it is part of the profession. But in India as well where farmers are demanding higher minimum support process. Farmers in the U.S. also want higher guarantees for farm income. Commodity prices...
Farmer/Green Divide
The recent policy reversal in Europe on environmental obligations for farmers is not being welcomed by everyone. Greenpeace warns that excluding farms from emission reductions will ultimately hurt farmers as their crops fail under the burden of climate change. They are also warning that farmers...
The Ashes of EU’s Greens; Redefining Consensus
The Ashes of EU’s Greens There is a lot of finger-pointing in Brussels over responsibility for originally drafting the Green Deal/Farm to Fork debacle, and now its withdrawal. The political nature of the whole exercise was illustrated by EU President Ursula von der Leyen’s rationale...
EU Sobers Up
The EU’s political leaders have made dramatic policy reversals in recent days that reflect a more reasoned approach than in the past. As noted previously, they have scrapped some of the Green Deal/Farm to Fork requirements like quitting pesticides, and today the EU Parliament (EP) approve...
Tariffs are Coming; EU Politicians Cave; Unbridgeable Differences; Flawed Science Bias
Tariffs are Coming While U.S. presidential candidate Donald Trump has promised more tariffs if he is elected, border measures against China are likely regardless of this year’s winner of the White House. China has ramped up bank credits to producers of EV’s, batteries, solar, and mi...
Fed Holds Rates: Looking for Confidence Moving Forward
The Federal Reserve left the federal funds rate unchanged this week at the latest meeting of the Federal Open Market Committee (FOMC). As WPI reported on 23 January, … the Federal Funds futures market was pricing in a more than 97 percent chance of the Fed leaving rates uncha...
Bidenomics Analysis; Dollar versus Yuan
Bidenomics Analysis Inflation has helped make President Joe Biden unpopular and he’s fighting back with the accusation of “price gouging” by the grocery business. Food inflation remains stubbornly high but not because of grocery store greed. Grocery store operating profits are...