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...
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...
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...
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...
Innovate, Replicate or Regulate; Trade Policy Bias
Innovate, Replicate or Regulate U.S. Big Tech companies should take a lesson from their Big Ag counterparts – Europe is not your friend. Looking at artificial intelligence, EU Executive Vice President Margrethe Vestager says the "The choice should not be American or American.” Yet t...
Uncertainties Abound
Newly installed Argentine President Javier Milei told elites in Davos last week that they need to rally around capitalism because socialism has never improved the lives of people. His speech was welcomed by some in the audience but not by all back in Argentina. He now faces large protests in Ar...
NGT Controversy
Environmentalists in Europe are reportedly furious over the European Parliament’s Environment Committee approving the use of some new genomic techniques (NGTs) in an unregulated manner. One framing is that the conservative members of the Committee pushed it through, but conservatives comp...
EU Policy Developments; India PSH and MC-13; EPA Regulating Livestock
EU Policy Developments Farmer protests in Europe have increased and some credit the movement with softening Brussels’ views toward Ukrainian grain threatening producers in eastern Europe. However, farmers have also been protesting the Green Deal/Farm to Fork and efforts to change the way...
Changes in U.S. Agricultural Trade
The export of surplus U.S. agricultural production remains hugely important to some crops, especially for cotton and sorghum where over half of output is traded internationally, as well as for soybeans, wheat, and rice. From the 1980’s through 2017, U.S. trade policy was focused on expand...
People In, Pork Out; Prop 12 Int’l Problem; Ceding the Advantage
People In, Pork Out Earlier this year, the U.S. Supreme Court ruled that California could stop pork from Iowa from coming into the state if it was not produced according to the dictates of Sacramento. This week, the same court ruled that Austin cannot prevent migrants from coming into the state...
Whither Trade
Analysts are intensely studying the changes in trade flows and their composition following the reversal from free trade by the Trump Administration, the concerns about supply chains due to COVID, and now the de-risking of the West from China. Supply chains have gotten slightly shorter. Overall...
Tradition Tackles Progress; Data Confusion
Tradition Tackles Progress At least twelve EU member states are trying to block the introduction of lab-grown meat. The pretense is that such a product “raises ethical, economic, social, and public health questions” but the underlying rationale is that “These practices represe...
Not Magnanimous; Transatlantic Tech Divide; Advice for Europe
Not Magnanimous An AgriPulse poll of geographically dispersed farmers from across the U.S. with at least $100,000 in gross annual income reflects some greed but low compassion. As commodity values decline, farmers want higher reference prices to ensure income support from the government. They w...
Winter Gives Biofuel Boost
A record 1.2 million electric vehicles (EVs) were sold in the U.S. in 2023. EVs hit a record 8.1 percent market share in the fourth quarter. However, also growing fast and having larger sales are hybrid, using a combination of battery and typically fossil fuels. For agricultural producers, rule...
Transatlantic Commonality; Argentina’s NTB’s
Transatlantic Commonality Politico’s senior foreign correspondent Nahal Toosi noted that ambassadors in Washington are warning that U.S. power and influence in the world is declining due to the nation’s intense partisan political divide. But it is not exactly glory days in Europe. F...
Value of Scale Recognized
Agriculture ministers from five EU countries (Bulgaria, Poland, Romania, Hungary, and Slovakia) are asking the European Commission to come up with a solution to the harm they say is being caused by imports of grain from Ukraine. One option is to impose tariffs on Ukraine. However, it is their a...
Greens Whiff; State Aid Impacts
Greens Whiff Farmers in Europe are upset with their policymakers. The French farmers union has just announced it backs the protests being made by German farm groups. Taking a page out of the Biden White House playbook, German Greens are blaming supermarkets for the troubles being faced by farme...
Quackery Has its Limits; Cockroach Amnesia; Identity Budgeting
Quackery Has its Limits The USMCA panel opining on the Mexican ban on GMO corn has decided it will not accept comments from Canadian NGO groups wanting to support the Mexican position. First, the Canadian’s position in the case is largely amicus curae. Canada is a minor producer of...
Chips War; Domino Effect
Chips War China complained that Washington’s export restrictions on semiconductors and on Chinese telecommunications companies violate WTO principles. There are larger worries than that. China has just taken over the number one position as a global automobile exporter and Washington worri...
Trade Deficit Down, Job Creation Up: A Look Under the Hood
Two recent economic reports have generated attention: the November balance of payments trade deficit and the December payroll report. There are tea leaves to be read for both. First, the trade deficit for all goods and services in November was down 2 percent, to $63.2 billion. The...
Eyes Open on India
USDA is leading a trade mission to India, noting that it is 1.4 billion people or 18 percent of the global population but accounts for less than one percent of U.S. agricultural exports. Average tariff rates tend to be higher in developing countries and lower in developed countries. But India&r...
Bright Belgian Light; SSA Riddle
Bright Belgian Light According to Euractiv, Belgian Federal Minister David Clarinval said he would emphasize food sovereignty as he assumes the Presidency of the EU’s Agriculture Council for the next six months. He said, “we must provide farmers with the tools to produce sufficient...
PepsiCo, Carrefour and GI’s; ChatGPT Goes Harvard
PepsiCo, Carrefour and GI’s A major story this week is major French retailer Carrefour saying it is dropping PepsiCo products because its prices are too high. It is not unusual for American companies to face attacks from the French but inflation is not a problem that PepsiCo has manifeste...
Russian Agriculture Enigma; Imbalanced Analysis
Russian Agriculture Enigma Among the many elections this year is Russia’s during 15-17 March. Vladimir Putin will be overwhelmingly elected. He has been effectively in control of the country for 23 years. Andrei Kolesnikov at the Carnegie Endowment for International Peace says that Russia...
Trade is Dead, So is Ag; Siloed America
Trade is Dead, So is Ag The U.S. agricultural trade balance has reversed, going from positive to negative. Industry leaders are arguing that the solution is more trade agreements but that is unlikely. President Biden has pulled back from his pursuit of minimalist trade objectives in the IPEF ta...
2024 Food Industry; Continued Multipolarity; AI Restrictions Emerging
2024 Food Industry Politico says the Biden Administration will crank up its anti-big business efforts for this election year. A long list of anti-trust investigations are coming to fore, including against Big Ag. Targets include the merger of grocery retailers Kroger and Albertsons and stopping...
Old President, Old Allegiances
President Biden sided with the steel workers union and will put Nippon Steel’s purchase of US Steel through the “serious scrutiny” of the Administration’s own Committee on Foreign Investment in the United States (CFIUS). As noted previously (Blatant Nationalism), Nippon...
Bitter Problem; Blatant Nationalism
Bitter Problem The U.S. sugar program is an protectionist abomination emanating from a political deal in the 1981 farm bill. Unlike other crops that are subsidized directly by the government, sugar erects restrictive import quotas and then forces American consumers to pay 2-3 times the world pr...
232 Confusion; Green Border Measures
232 Confusion WTO dispute settlement rulings are arcane, highly legalistic, but sometimes contradictory to the layman’s eye. The latest case is a ruling against Turkiye for its retaliation against U.S. Section 232 tariffs against steel and aluminum imports from the Turks. A year ago, a pa...
Ag Exports Not the Panacea
According to the FAO agricultural trade index, Africa has experienced the relatively largest jump in the past decade, followed by North and South America. Yet the share of global GDP for both Africa and South America remains low. Despite the boom in agricultural exports where it is now dominati...
Not Walking the Talk; Music Protectionism; North-South Divide
Not Walking the Talk The European Environmental Agency has assessed the EU’s commitments and concludes that the goal of reducing emissions 55 percent from 1990 levels by 2030 can be achieved. However, most others will not. One of the farthest from progress is designed to address land use...
Policy Shorts
Jones Act: The EU is correctly arguing that the Jones Act, an American law restricting intra-U.S. shipping be restricted to domestically built and operated ships is trade distorting. Washington argues its original purpose, to ensure the supply of domestic ships for national security, remains a...
Fed Crosses Finish Line
The Federal Reserve held interest rates steady on Thursday, indicating that it considers it has crossed the finish line in its effort to rein in inflation. The federal funds rate was held at an effective 5.375, the midpoint between 5.25 and 5.5 percent. Earlier this week, the November inf...
EU Reveals Export Future; Swiss Choose Expensive Food
EU Reveals Export Future The fundamental debate in Geneva between agricultural exporting countries and developing countries is domestic support versus market access. The perfect quid pro quo is rich countries reduce support and developing countries grant market access. Developing countries cann...
Market Commentary: Policy Front and Center for Commodity Trade
Macroeconomic and commodity market policy factors were front and center for the CBOT’s trade on Wednesday, following the devaluation of the Argentine peso and the Federal Reserve’s interest rate decision. Both policy decisions came in as expected with the Fed holding rates unchanged...
Wishful Thinking on China Retaliation; Wishful Thinking on NGT’s
Wishful Thinking on China Retaliation The U.S. House Select Committee on the Strategic Competition Between the United States and the Chinese Communist has recommended tariffs to equilibrate the trading terms between the two countries. The Panel recognizes that China is likely to retaliate, and...
Aggies See China Pain; SUR Revival; Meat and Oil
Aggies See China Pain China has been the top market for U.S. agriculture since 2020 and its share in some products is overwhelming. For this reason, a coalition of agriculture groups wrote to the Congress’ U.S. Select Committee on the Chinese Communist Party asking that the Middle Kingdom...
GI’s for EV’s; Policy Roundup
GI’s for EV’s Europe’s leaders’ real concern when meeting with their Chinese counterparts last week was not the growing trade deficit generally, but specifically the flood of imported Chinese built electric vehicles. China provides subsidies for their manufacture, and th...
Mercosur Regional Analysis
Argentina’s Policy and Macroeconomic Situation Argentina’s trading last week was shortened due to a national holiday on Friday. At the same time, it was the week before the newly elected President took office on Sunday, and expectations of a dramatically different approach to...
Farm Financials Going into 2024
USDA’s 30 November farm income forecast shows net farm income at $151.1 billion for CY 2023, a decrease of $31.8 billion, or 17.4 percent, relative to 2022 in nominal dollars. In inflation adjusted dollars, net farm income is forecast to drop $37.9 billion, or 20 percent from 2022. This i...
Looking at the GDP Revision
Back in October, the initial, or advanced, Q3 GDP report showed the U.S. economy grew 4.9 percent; and on 29 November the GDP estimate was revised up to 5.2 percent, which made Q3 the fastest growing GDP since 2021. The Bureau of Economic Analysis (BEA) regularly calculates and reports GD...
Political Risk to Agribusiness
The Biden Administration and others have already shown their animosity toward Big Ag. Heading into 2024 the hate may grow larger. The President’s reelection campaign, and that of the Democratic Party, is threatened by voter dissatisfaction with the economy. Specifically, they are upset ab...
Hobbling AI; Chinese Spin; F2F Setback
Hobbling AI The EU has neared agreement on doing what it does best, regulating. This time its target is artificial intelligence. France and Germany were reluctant participants because they have their own startup AI companies and didn’t want to hobble them. Regulatory hobbling from Brussel...
NGT Optimism; New Old Threat to Trade
NGT Optimism EU Parliament rapporteur for the Commission’s proposed new policy on new genomic techniques (NGT’s) is Jessica Polfjärd and she is expressing optimism that she can get the portfolio approved in January. She told Euractiv that otherwise it may “take potentiall...
EU-Mercosur Deal Smooshed
The multi-year effort to negotiate a trade agreement between the EU and Mercosur appears to have run into too many hurdles on both sides of the Atlantic. France is a key blocker in Europe, with claims that the environmental provisions are not tough enough on South America. Argentina said it was...
Decoupling or Redirected; Take, Don’t Give
Decoupling or Redirected There is much academic debate over whether U.S.- China trade has been decoupled, or merely redirected with Chinese goods diverted through other countries such as Mexico and Thailand. Part of the problem is using correlation to assume causation. Researchers at Penn State...
Tautological Rabbit Hole; Buy Small and Stay Home
Tautological Rabbit Hole The COP28 meeting in Dubai came to an agreement on a loss and damage fund whereby rich countries help poor countries weather the adverse impacts of climate change. Funding will be voluntary and it will be run by the World Bank, presumably with the controls necessary to...
Atlantic Risks; Mixed Reviews of Asks; Rural Anarchists
Atlantic Risks EU Trade Commissioner Valdis Dombrovkis is a serious and competent politician. He is now signaling that reaching a conceptual deal with the U.S. on the trade in steel and aluminum is stalled and without prospect. Meanwhile, the Biden Administration appears unable to make concessi...
Green and Brown Collide
Last week’s win in the Netherlands by Gert Wilders was a stunning refutation of the Green Deal. The policy’s former protagonist in the EU Commission, Frans Timmermans, was relegated to a minority role with just seventeen seats. He had left his Commission position with the idea of ru...
Rebalancing Global Meat; Unintended Water Consequences
Rebalancing Global Meat The UN’s Food and Agriculture Organization will present a plan at next week’s COP28 meeting in Dubai that calls for rich countries to eat less meat, while instructing developing countries to boost their livestock production to improve animal protein in their...
Major Dairy Defeat; Boomers’ Promise to the Future
Major Dairy Defeat In a major policy defeat for U.S. dairy, a USMCA dispute settlement panel ruled that Canada’s dairy quotas do not limit U.S. access. U.S. dairy exports to Canada have risen but at less than the level expected when Canada promised to make changes to its regime. Ottawa pu...
Farm Financials Ending 2023, Entering 2024
The Federal Reserve raised the federal funds rate four times in 2023 for a cumulative rate hike of 100 basis points, though it left rates unchanged in September and November. Higher borrowing and carrying costs have been the new normal in agriculture, a shift that will linger to some degree for...
De-Risking and Food
The Biden Administration went through a rapid succession of descriptors for its trade policy toward China before settling on de-risking. It initially called for decoupling but switched to re-shoring. This upset allies and so next it tried friend-shoring. It has stuck with de-risking for a while...
African Farming; European Farming
African Farming This is said to be the African Century. Over half the world’s population growth to 2050 will come from that region of the world. Yet its agriculture is woefully unable to feed the current population, let alone where it is headed. The average yield for maize this year in Af...
Cultivated versus Uncouth; All or Nothing; Genetic Enforcement
Cultivated versus Uncouth The Italian Chamber of Deputies passed a law banning the sale of cultivated meat. The law will prevent the production and sale of food or feed "from cell cultures or tissues derived from vertebrate animals." Apparently, you can only eat animals in Italy. But they&rsquo...
Inflation Rates Now Flat, but Prices Permanently Up
The Federal Reserve left interest rates unchanged at their 1 November meeting; Chairman Powell noted that this was a pause to let the 100-basis point increase in rates over the past year take full effect. This week, an initial sign that progress was being made was the October Consumer Price Ind...
Inclusive Trade; Transatlantic Imbalance
Inclusive Trade Diversity, Equity, and Inclusion (DEI) is framework embraced by the Democratic Party in the U.S. to remedy past discrimination, particularly against “historically” underrepresented classes of people. The Biden Administration decided to throw the inclusion concept int...
DE&I Comes to Trade; Green Deal Equals Deforestation
DE&I Comes to Trade It is busy this week on the U.S. West Coast. Asian leaders are negotiating with their American hosts on APEC, IPEF, and U.S. – China bilateral relations. The latter is supposed to become less prickly as Joe Biden and Xi Jinping meet for the first time in a year, bu...
Over-greening Bees; China versus Labor; Farm Policy
Over-greening Bees In 2018 we were all warned that a third or more of our food supply was being threatened by the struggles facing bees. Europe focused on insect pollinator health, including banning (with exceptions of course) neonicotinoid pesticides as a threat to pollinators. American resear...
China Teed Up; Reality in the House; Farmers Win in EU
China Teed Up President Biden meets with Chinese leader Xi Jinping next week outside the APEC meeting. Bloomberg suggests there could be a quid pro quo with China giving Washington assistance on defense issues, stopping the flow of fentanyl, and increasing transparency. In exchange, the U.S. wo...
Biotech for Environment; Transatlantic Negotiating Mandate; Indonesian Heat
Biotech for Environment Greens and others in the European Parliament reportedly reacted badly to rapporteur Jessica Polfjärd's initiative that would broaden the EU Commission’s proposal for lessening regulation of new genomic techniques. Yet it is genetic modification technologies th...
Trade Policy Developments; Dutch Politics
Trade Policy Developments The Biden Administration is making several adjustments to its major trade policy initiatives. First, while hosting a meeting last week of the Americas’ Partnership for Economic Prosperity, President Biden was forced to expand the agenda to include trade and move...
The Non-Sucralose-Coated Sugar-High; Ports are Princely; Future of Ag
The Non-Sucralose-Coated Sugar-High A recent poll indicating President Biden is in some reelection trouble even against Donald Trump doesn’t change the fundamental context for U.S. trade policy. Both politicians have now embraced protectionism on behalf of manufacturing labor. While Mr. B...
AI versus GMO; Self-Immolation; Too Hot to Handle
AI versus GMO Political leaders gathered in Bletchley Park at the invitation of UK Prime Minister Rishi Sunak and agreed to a global dialogue on regulating artificial intelligence. There was a similar meeting in Hong Kong. They want AI businesses to include responsibility in their models, and a...
PPE Your Meat; Speaking Truth to Food
PPE Your Meat President Biden’s Midwest tour included a Christmas tree of presents to rural America. He echoed USDA Secretary Vilsack’s concerns about industry concentration and said the government would spend money to create small meat packing companies and other populist ideals. H...
Biden Rural Approach; AI Feint
Biden Rural Outreach A politician going into the geography of the opposition is usually connoted as a sign of strength. Nothing in the Biden presidency polling suggests strength but the President’s foray into rural America this week connotes a strategy of at least reducing the opposition...
Coercion Beholder; Down Under’s Demands
Coercion Beholder U.S. Supreme Court Justice Potter Stewart famously said in a 1964 case that he could not define hard core pornography “But I know it when I see it.” The G-7 called for an end to boycotts of purchasing Japanese farm products, calling it a form of coercion. Meanwhile...
Economic Coercion; Good for the Goose; No Surprise
Economic Coercion Australia’s trade minister is in China where a rapprochement in relations is underway. Beijing had earlier sought to punish Australia for Canberra demanding more information on the origins of COVID. Australia subsequently found other markets for the productions China int...
Farm Bill Schedule; Digital Protectionism
Farm Bill Schedule Congressman Mike Johnson (R-Louisiana) appears poised to capture the position of House Speaker. If successful, he will prove the axiom that it is not the best candidate that wins a position, but rather the least disliked. He also heard and responded to complaints from the Hou...
Wide Divide Ahead of MC 13; Value of NGT’s; Polish Politics
Wide Divide Ahead of MC 13 All sides remain far apart at a WTO senior officials meeting looking for deliverables at the coming MC12 meeting in Abu Dhabi in February. The Biden Administration is mimicking Trump policies that ignore the majority developing countries’ demands. The 90-plus de...
USMCA GMO Corn Panelists; Maritime Order
USMCA GMO Corn Panelists The U.S. and Mexico have agreed on the three jurists that will decide on Washington’s complaint about AMLO’s GMO corn ban. Hugo Perezcano Díaz is a former general counsel for international trade in Mexico’s Ministry of Economy. His work on inves...
Incongruous Economics
There are many similarities between the U.S. and EU, but many differences as well. When the common currency euro was introduced in 1999, it was valued at the equivalent of $1.16. It hit a peak of €/$1.58 in 2008 but has since slid back and is currently at €/$1.07. The forecast has it...
Elbow for an Eye; Eye for an Eye
Elbow for an Eye Legislation aimed at China has been introduced in the U.S. Congress to restrict foreign ownership of farmland. However, it is more nimble state legislators who are increasing restrictions on China in their jurisdictions. Arkansas has just ordered Syngenta to sell 160 acres of f...
Right View, Wrong Solution
Speaking at the World Dairy Summit, USDA Secretary Vilsack repeated his concern about the declining number of farms and farmers in America, and in a related dynamic the increasing concentration of income among larger farmers. As previously noted, a economic argument can be made for economic sca...
Elections and Policy; Appeal of Non-reciprocals
Elections and Policy Congressman Jim Jordan came up 20 votes short in his first-round effort to secure the Speakership of the U.S. House. Some farm state Republicans were seeking assurances from him that the farm bill will have a chance at passage this year. Historically, he has voted against f...
Technology Battle Ahead; Prosperity Rebuffed as Benefit
Technology Battle Ahead This year’s release of various AI models has prompted some political leaders to call on the Biden Administration to begin negotiating global rules on digital technology and trade. The fear is that other nationas will begin erecting barriers, some of which will be h...
Vilsack’s Baiting Rhetoric
USDA Secretary Tom Vilsack reportedly is asking farm groups how many farmers and how much farmland have gone away since 1981. He then cites the number of farmers lost as 437,100 and farmland as 141 million acres. He’s asking farm leaders if they are “okay” with those losses? F...
Biden’s Food Burden
There were mixed reactions to today’s CPI report for September, though it pushed Wall Street into its first sell-off in four days. U.S. core inflation, stripping out food and energy, dropped slightly last month, though the overall rate stayed steady at an annualized 3.7 percent. That is s...
Godwin’s Law and Food; Mother Nature’s Trade Barrier; Reciprocal Nonreciprocals
Godwin’s Law and Food Attorney and author Mike Godwin noted that the longer a discussion grows on social media, the increased likelihood someone will use the term Nazis or mention Hitler. The observation is that when it reaches the point of invoking a most despicable aspect in human histo...
Report: Ag Productivity Not on Trend to Meet Needs in 25 Years
A new report out of Virginia Tech University concludes that increasing agricultural productivity is not enough to meet demand for global ag production by 2050. Specifically, the report says that, … since 2011, average annual agricultural total factor productivity (TFP) growth...
Political Hacks on Prices; Seeing RED Herring; AMLO’s Short-term Vision
Political Hacks on Prices Food price inflation continues to torment consumers and ignoring its monetary policy-based roots, agribusiness remains a convenient scapegoat by politicians. Canada’s Justin Trudeau knows who to blame. To stabilize food prices, he wants credit for twisting...
Consumers’ Food Purchasing: Politics Matters
As the farm bill plays out – eventually - an interesting consumer survey was released last month by Purdue University’s Center for Food Demand Analysis and Sustainability. It reports on consumers’ food perceptions broken down by political ideology based on 20-months of monthly...
Ukraine Blows up CAP; Watered Down Trade Policy; Experts Have Value
Ukraine Blows Up CAP Some are worried about the impact of Ukraine joining the EU and specifically if it becomes part of the Common Agricultural Policy. Ukraine would produce 18 percent of the EU’s wheat and 57 percent of its sunflower seeds. Its production area is relatively huge and coul...
UK-U.S. FTA Unlikely
UK Secretary of Business and Trade Kemi Badenoch is correct when she says there is a “zero” chance of a trade deal with the U.S. She pins blame on Joe Biden’s marriage to labor unions, which oppose just about any kind of trade liberalization. Her analysis arrives amid rumors t...
Food Service Spending within Total Consumer Spending
Last week the personal income data for August was released; income in August was up 0.4 percent and on the year is up 4.8 percent. The driver was private sector wages, which were up 0.5 percent on the month and 5.6 percent on the year. That’s good news, compared to the COVID era when gove...
Green Machinations; Export Gamble
Green Machinations EU leaders are in a bind. Their candidate to assume the Green Deal portfolio, Marčos Šefčovič, is being pressed by EU Parliamentarians for commitments to enact all of the green promises. As a candidate and not yet a Commission official, all he can do is give vague assu...
Transatlantic Future; Redundant Legislation; Ineffective Opposition
Transatlantic Future A U.S.-EU meeting occurs in a few weeks and the number of topics is growing. Steel and aluminum tariffs are the only large trade issue, largely because Brussels doesn’t want to talk about agriculture, unless its about Spanish olives. Meanwhile, Europe is concerned abo...
No Government Shutdown for at Least 45 Days
The federal government is open this morning due to some unexpected and quick moving maneuvers on Saturday, the last day of FY 2023. A 45-day short-term continuing resolution (CR) was passed by the House and the Senate; that gives both chambers more time to work out a full year funding plan for...
Shutdown Exports; Killing the Messenger; Checking Out
Shutdown Exports The U.S. government will likely shut down this weekend because some Republicans are trying to leverage more budget discipline and other goals. The overall impact on the economy of a government shutdown is less than the clickbait media is trying to convey, but it does have odd i...
Green Tipping Point; Scale of Corruption
Green Tipping Point The media only covers the two extremes: climate deniers and climate alarmists. The climate alarmists have been winning but now it is the middle having their way. Those in the middle have been quite willing to make some sacrifices on behalf of slowing climate change. But they...
Farm Bill Delays; Small Farmers’ Big Complaint; Schöpferische Zerstörung
Farm Bill Delays The prospects for passing a farm bill this year are characterized from being very cloudy to increasingly getting worse. One academic said it is the worse political conditions for a farm bill that he has ever seen. The old farm bill coalition is in disarray and outside forces ar...
WTO Outlook; Food Safety Evolution; Subpar Eco Schemes
WTO Outlook USTR Katherine Tai last week described the WTO’s 13th Ministerial Conference scheduled for next February to be the first “reform ministerial.” However, she recognizes that U.S. ambitions such as increasing transparency, addressing non-market economies and fixing di...
Economic Growth: Is It Strong or Fragile?
Last week, the Fed’s FOMC left interest rates unchanged, as was widely expected, but the future outlook is less certain. According to Federal Reserve Chairman Jerome Powell, “The fact that we decided to maintain the policy rate at this meeting doesn’t mean that we’...
Responding to China
EU Trade Minister Valdis Dombrovskis is headed to China, reportedly with the message to sign onto some form of trade agreement giving Europe assurances of a more balanced relationship, or risk things getting worse. It doesn’t help when Beijing’s rhetoric is over-wrought. The EU has...
Africa Rising; Farm Bill Split; Bulgaria as Exporter
Africa Rising Notably, the Africa Group at the WTO has asked for policy space to develop its industrial sector. Historically, the focus has been on agriculture. This redirection conforms with the development that has occurred elsewhere, with the industrial sector rising and reducing the need to...
Glyphosate Wars; Biodiesel Boondoggle; Ethanol Future Play
Glyphosate Wars Objections to more toxic herbicides with drift issues has been more understandable than the attack on relatively benign glyphosate. But glyphosate became the poster child for the anti-chemistry green activists largely because of its low adverse impacts combined with effectivenes...
Targeting Big Ag; Milking the Cow
Targeting Big Ag Today signaled the end to a 60-day public comment period on the Biden Administration’s proposed regulatory guidance on antitrust issues. No doubt there were many negative comments, but its impact could still be huge on American agribusiness. In a simplistic “big is...
IPEF to Nowhere; Scale and Regulation
IPEF to Nowhere The Biden Administration continues to push its Indo-Pacific Economic Framework (IPEF) but at least two developments raise questions as to its utility. The first is Chief Agriculture Negotiator Doug McKalip announcing that agreement on an agriculture chapter is “really clos...
Chinese Energy Imports: Crude Oil at Record Levels
There has been much attention to, and discussion of, China’s declining two-way trade volumes. China is a trade dependent economy, with imports of many commodities and goods fueling its manufacturing and processing sectors and exports bringing in hard currency. China’s trade flows, h...
Skewing Farm Output; Pausing Farm to Fork
Skewing Farm Output The activist group Farm Action is usually slaying mythical creatures like Big Ag or the $750 million checkoff programs used by farm organizations to promote research and marketing. Their typical paean is the small farmer, but their latest focus is farm program structure and...
CBAMing Meat; Ukraine Grain on the Brink
CBAMing Meat The EU is scheduled to soon publish a revised animal welfare directive that could impact suppliers in other countries. Much the way Brussels fussing over phone charging cords forced a USB-C standard globally, the impending animal welfare standards may have less to do with science t...
Mexico’s Transition; Just Because
Mexico’s Transition The U.S. effort at near-shoring has demand for Mexican warehouses and industrial parks surging. However, one deficit may be energy as the government’s control of the energy sector causes deficiencies in output. In fact, a Bloomberg analysis reveals an underlying...
India’s Curious G20 Outcome; Turkey’s Motives; U.S. Hopes in Mexico
India’s Curious G20 Outcome The GATT was derided for being the General Agreement to Talk and Talk and former U.S. ambassador to India Ken Galbraith said that, “Meetings are indispensable when you don’t want to do anything.” The G20 hosted by India accomplished something,...
Diminishing Chances of a September Interest Rate Hike
The Federal Open Market Committee (FOMC) will meet this month to discuss the next step in monetary policy. As it stands now, the Federal Fund Futures market is pricing in only a 7 percent chance of an increase in the federal funds rate above its current 5.25 to 5.50 percent target rate. This is...
Industrial Planning Issues; Playing the Oil Market
Industrial Planning Issues The U.S. and EU are reportedly working on a plan to jointly impose tariffs on excess steel production from China. Hopefully it goes better than the sanctions placed on Russia. Container traffic through St. Petersburg and other Russian ports is said to be “surgin...
India’s Day in the Sun; Rapporteur Inflation
India’s Day in the Sun The G20 meeting occurs this coming weekend in the New Delhi convention center and India is making the most of its central role in the event. Although Russian President Vladmir Putin and Chinese President Xi Jinping will be skipping the event, they may not be missing...
Worker-Centric Comments; North American Colossus
Worker-Centric Comments The Biden Administration complains that U.S. trade policy has historically focused on increasing transactions and lowering consumer costs. Instead, it wants to use trade policy to boost the outcome for workers and to “advance racial and gender equity and support fo...
Net Export Capacity
To feed the world, countries need to have more arable land than is needed to feed the domestic population and have a higher yield or crop output per unit of land. Even that may not be enough. Australia has both the land and the output but suffers from inconsistent moisture. Kazakhstan is in a s...
Trade Policy Pivot Rationalized
U.S. Trade Representative Katherine Tai is pushing back at critics of the Biden Administration’s withdrawal from decades of trade liberalization. She continued the populist rhetoric that the Administration’s position is a defense of workers, that the U.S. position reflects a global...
Return of the Recession Worriers
lt seemed good as inflation dropped from 9.1 percent in June 2022 to 3 percent in July 2023. Some politicians credited the Inflation Reduction Act, at least in name. Those that had earlier said a recession was inevitable if inflation is to be tamed were eating crow. Last week, Federal Reserve C...
Farmer Sympathies with Albania
Euractiv reports that 30 percent of the agricultural exporters in Albania have gone bankrupt. The cause? The rapid appreciation of the national currency, the lev versus the euro zone where much of the production is sold. U.S. agricultural exporters understand the pain. The U.S. dollar appreciat...
Bent, Not Broken
The recent BRICS+ meeting in South Africa highlighted some of the animosity toward a world order long dominated by countries comprising just a minority of the world’s population. However, the Western model is difficult to undo for many reasons. From the standpoint of its architects, it pr...
Following the Stars under Cloudy Skies
Federal Reserve Chairman Jerome Powell delivered his address to the Federal Reserve’s annual policy conference in Jackson Hole, Wyoming on Friday. Last year, Powell was short, direct, cautionary, and hawkish. The equities market tumbled afterwards. This year he was a little mo...
Food Inflation Forecast: Highs and Lows
USDA released its August food CPI forecast today; the expectation for the rest of the year is range bound with a mid-point of 5.9 percent. The most interesting part of the forecast was the wide range of projections for 2024 – from a drop of 2 percent in the low case scenario to an additio...
His Excellency Hyperbole; Expanding USMCA
His Excellency Hyperbole In group dynamics, all manner of threats are used to try and compel action. These include setting deadlines, threatening adverse consequences, or promising rewards. At this week’s G20 meeting hosted by India, most of the effort was getting past conflict over Russi...
More BRICS, Same Problems
The BRICS Group, a club of nations with the goal of tilting the international order away from the West, has invited six countries to join and make it an unhappy family of eleven. We previously noted the shortcomings of the original BRICS and the new cousins have similar genetic defects: A...
BRICS Differ; EU Agriculture Policy Update
BRICS Differ In the adjacent article on BRICS Dominate, it is noted how the five key countries (Brazil, Russia, India, China, South Africa) meeting this week in South Africa stand out in terms of global agriculture. However, they are also different from a policy standpoint. Researchers at the U...
Rejecting Progress; Trump Out-Protections; EATS Failure
Rejecting Progress Two decades ago, the WTO held its Fifth Ministerial in Cancún, Mexico. At the time, Mexico’s campesinos or peasant farmers protested that free trade was ruinous to their lifestyle. They took reporters on tours of peasant farmers, showing off how the farmer worked...
China Flips on Food
Washington goes paranoid over import dependence on microchips and EV’s, but not food despite a recent trade deficit in grub. Nations that have experienced starvation in the past, such as those in Europe and China tend to focus on food self-sufficiency. Until recently, the mantra from Beij...
Follow the Rhetoric; Calculating Industrial Policy; Freeing the Golden Goose
Follow the Rhetoric The term “global warming” evolved to “climate change” and then to “climate crisis.” Each new framing is intended to better provoke action. The latest iteration makes maximal use of scientific flexibility and comes from United Nations Secre...
Friends on IPEF; Dropping Like BRICS; Dispute Acquiescence
Friends on IPEF The Washington Post is generally a friendly newspaper when it comes to the Biden Administration but even it could not countenance the White House failure in the Asia Pacific region. The paper’s editorial writers commented on the Administration’s proposed Indo-Pacific...
Refusing to be Boxed; Nobody’s Right - Everybody’s Wrong; No Surprise on GMO Corn
Refusing to be Boxed President Biden has likely done as much or more on the environment than any other White House occupant but that does not satisfy the zealots in the green lobby. He has refused to orchestrate the fossil fuel shortage demanded by some, and now he has spared the meat industry...
Trade Deficit Focus; Measuring Up China
No More Mr. Nice Guy; Food System Lies
No Mr. Nice Guy President Biden has kept many of his predecessor’s market access barriers but some of his supporters said that at least it is “polite protectionism” as a hyper-empathetic politician at least performed Trumpism with a human face. However, Joe Biden is now soundi...
Forex Commodity Business
Exchange rates and the commodity trade are inextricably mixed. Multiple recent developments are forcing board room recalculations as to where forex is going, and how best to position amidst the chaos. Just yesterday a populist Argentine Congressman named Javier Milei took the largest share (30...
Land Values and Cash Rents
USDA’s annual crop land values and farm rents survey was released last week; crop land values in 2023 average $5,460 per acre. Farm real estate value was $4,080 per acre - farm real estate includes all buildings (including homes) and other assets (bins, etc.) on a farm. Crop land was up 8...
Trade Without Industry; Content Moderation; Shipless Black Sea
Trade Without Industry If the Biden Administration were doing industry’s bidding, it would be negotiating trade agreements with real increases in market access. However, the lack of market access talks did not prevent Rep. Pramila Jayapal (D-Washington) from repeating the usual complaint...
Big Picture Trade Snapshot
U.S agricultural exports through May (the June data will be released on Thursday) show that among the 213 categories tracked for agriculture, exports are down year-to-date from last year by 8.5 percent in value, while imports are down 0.3 percent. Overall, that is a 4.4 percent drop in two-way...
Ag Tech Adoption; Awkward Trade Policy; Awkward Silence on Monopoly
Ag Tech Adoption The confluence of complex demands on the global farming sector including food security, competitiveness, climate change and sustainability make the adoption of agricultural technology even more important. In a service to policymakers, McKinsey & Company surveyed 5500 farmer...
Pigs Better than People; Durability and Opposition; State Directed Morals
Pigs Better than People House Agriculture Committee Chairman Glenn “GT” Thompson (R-Pennsylvania) says he will take the proverbial bull by the horns in the Prop 12 versus EATS animal welfare debate. The Supreme Court allowed California’s Prop 12 to prevail because there...
Mexican Desperation; Africa Group Wants Cuts; Climate Thoughts; Ag Sector Split?; Deceptive or Deluded; Laughable Agenda
Mexican Desperation Populist Mexican Deputy Agriculture Secretary Victor Suarez is facing a losing case in a USMCA dispute settlement case over GM corn as evidenced by his latest desperation move. Claiming the U.S. has no evidence to support the safety of GM corn, he demanded a joint scientific...
All That Glitters Is Not Gold; All Hope is Lost; If You See Something, Say Something
All that Glitters Is Not Gold Chief U.S. Agriculture Negotiator Doug McKalip spoke at the Minnesota Farmfest this week and said “a lot of effort” will be put into opening India’s market for U.S. agricultural products. Good, because it will take a lot of effort, and more. He an...
India's Prolific Agriculture
India is the world’s ninth largest agricultural exporter. The Biden Administration wants to negotiate with India on agricultural trade access, but New Delhi has a good thing going. Its agricultural trade surplus with the world has been growing, and more than a third of the reason is trade...
Farm Labor “Solutions”; Nebraska More Welcome Than China
Farm Labor “Solutions” The Biden Administration is labor-friendly, and all of the labor sector lobby groups are now working the farm bill reauthorization. Among the demands is too slow line speeds at food processors. It is no doubt relatively dangerous work though worker safety has...
Pope Joins Africans; Take PASS on EATS
Pope Joins Africans As noted last Thursday, Russian President Vladimir Putin’s effort to offer succor to African leaders in the form of grain to gain their support versus Ukraine failed miserably. He offered grain to them, some free, but the best he got in return was their call for a ceas...
Enough is Enough; Backfiring on Moscow; Political Addiction; Opposite Approaches
Enough is Enough Special interest lobbies cannot show satisfaction lest they lose their raison d’etre. However, French Agriculture Minister Marc Fesneau reached his own point of dissatisfaction. Euope’s green lobby got everything they wanted in the new Common Agricultural Policy. Fa...
Ukraine Exports and EU Policy; Targeting Brazil
Ukraine Exports and EU Policy Russia is not just attacking Ukraine’s ability to export grains but may be threatening EU member states on the eastern periphery. Drone strikes on the port of Reni occurred a few hundred yards across the Danube from NATO member Romania. The UK is warning that...
Black and White; Careful What You Ask
Black and White The European Food Safety Authority concluded after extensive research on the herbicide glyphosate that no “areas of critical concern” were found when it comes to potential harmful impacts of using the substance in plant protection. German Green Agriculture Minister C...
Policycrisis or Minicrisis; Food Insecurity Mirage I; Food Insecurity Mirage II
Polycisis or Minicrisis Adam Tooze is a fantastic historian and his characterization of a polycrisis whereby the globe suffers from a thousand interconnected cuts is compelling theater. If the end of the world genre is your cup of tea, there is also Peter Zeihan’s latest book, The End of...
Complications for a New Farm Bill
The House of Representatives may take up the FY2024 Agricultural Appropriations bill this week, and then again, it may not. First, in the House, legislation has to go through the Rules Committee where that panel sets the rules of debate, including which amendments are considered in order...
Black Sea Grain Initiative: One and Done?
The uncertainty that Russia’s invasion has brought to agricultural markets continues. Roughly 32.9 million MT of grain has been exported from Ukraine since the Black Sea Grain Initiative (BSGI) began in July 2022. Russia refused to extend it Monday, siting the continued sanctions wh...
Broken Record; Love Thy Brother; Genuine Intelligence
Broken Record For the eighth time, not the second or third, the U.S. has complained at the WTO that India violates national treatment when it comes to GM crops. New Delhi has approved the domestic commercial use of GM mustard and has long allowed the cultivation of GM cotton by Indian farmers...
Farm Bill Timeframe: Lots of Hurdles
At a farm bill event in Indiana featuring that state’s two U.S. Republican Senators, Mike Braun, who is a member of the Senate Ag Committee, and Todd Young, the Committee’s Ranking Republican member, Committee Ranking Member John Boozman (R-Arkansas) gave an update on the legislatio...
Third Way Sought
Economists are debating the current geopolitical hand that has been dealt, and how best to play it. President Biden has made a major shift toward government directed self-sufficiency in critical minerals, automation, and decarbonation where validity gets hotly debate. At the same time, he has e...
Inflation, Spending, and the U.S. Economic Outlook
Last week, WPI’s Dave Juday noted that while the all-items CPI inflation measure has fallen significantly from its June 2022 peak, other metrics show far more persistent inflation. The “core CPI” (which ignores energy and food inflation) that the Fed considers when making inte...
Apples: Picking with a Robot?
ERS’s study on cost savings in U.S. apple production is a good look at an industry adjusting to scarcity in labor markets. Washington State is by far the top producer, and they have long depended on the H2-A visa program for workers—an estimated 50,000 annually--not only for h...
Inflation Cleveland Style; Inflation Higher than CPI Indicates
Yesterday the Bureau of Labor Statistics (BLS) released the June Consumer Price Index (CPI) showing a 0.2 percent growth in June, the smallest monthly increase since August 2021. There are a few ways to look at the numbers, however. On the one hand, the 3 percent annual inflation is a big drop...
Pity EU Farmers
The European Parliament approved a Nature Restoration Law that farmers say will cause the loss of farmland targeted for restoration as natural habitat. Meanwhile, the goal of reducing pesticide use by 50 percent and cutting fertilizer applications was supposed to be offset by deregulating new g...
Concentrated but Explainable; Moral Equivalence
Concentrated but Explainable In President Biden’s first six months as president he issued an Executive Order calling on federal agencies to investigate economic consolidation that is harming workers and consumers. A new USDA/ERS presentation on Concentration and Competition in U.S. Agribu...
Policy Compounding Compounding; Not Chinglish; Freedom and Food
Policy Compounding Compounding Feed compounders typically use computer software to find the optimal mix of ingredients (up to 900 different options) based on nutrition and price to maximize utility and value. In Europe, the complexity of the chore is compounded by policies on GMO’s. As ex...
Know Thy Brother; Remembering Abe
Know Thy Brother Europe and Latin America had one of the weirder policy exchanges of the week. Heads of state from the Latin American and Caribbean States (CELAC) travel to Europe 17-18 July and are debating a communique with the EU ahead of the visit. Europe has targeted Latin American countri...
IPEF Criticism; EU Pesticide Reports
IPEF Criticism Participants in the Biden Administration’s Indo-Pacific Framework for Prosperity meet again this Sunday to try and move forward on various provisions. However, the whole effort is facing criticism from all sides. The U.S. business community and some Indo-Pacific countries s...
Waiting for Trade Policy Changes; Transatlantic Speech
Waiting for Trade Policy Changes Seasoned Washington trade policy expert Bill Reinsch characterized the Biden Administration’s trade policy as akin to Grigory Potemkin’s fake villages erected for Catherine the Great. Basically hollow. Uruguayan Ambassador Andrés Durán...
Transatlantic Policy Revolutions; Grain Corridor Deal
Transatlantic Policy Revolutions USTR Katherine Tai evangelizes the Biden Administration’s worker-centric trade policy by emphasizing that change is hard. What makes it more difficult is that its emphasis on workers (read higher paid union workers) over consumers (e.g. everyone else) is c...
Book Review: Ultra-Processed People
What a catchy title by virologist Chris van Tulleken! In his book he asks, “Why Do We All Eat Stuff That Isn’t Food … and Why Can’t We Stop?” Wow, not food being marketed as food should have a legal problem. This book has its high-C personality type advocate...
Positive Economic Data - Silver Lining Surrounded by Clouds
There have been a number of economic reports recently that on the face of them seem very positive, but in some cases, they are the sliver linings still surrounded by clouds. The final revised estimate of GDP for Q1 2023 came in at 2 percent, which is up from the prior estimate of 1...
UN Food Summit; Hill Grilling; Food Insults
UN Food Summit When the first biannual UN Food Summit occurred back in 2021, it was a hotly competed policy platform between agribusiness and the social activist community. The latter sees the current system as deeply flawed and sought to dismantle the corporate/scale/trade side of the sector...
Retaliation against Mexico; Social Engineering Masquerading as Trade Policy
Retaliation Against Mexico The Mexican government is imposing a 50 percent tariff on white corn imports to protect its growers from competition. This is a much more surgical approach than its proposed ban on all GM corn imports. Only 4.5 percent of U.S. corn exports to Mexico is white corn but...
Brazil Grain Storage Increases
Much like the U.S. historically, Brazil’s capacity to store its grain (wheat, coarse grains, rice, soybeans) output has been increasing with its production gains. According to the Brazilian Institute of Geography and Statistics, the number of silos being built is growing faster than bulk...
Day Late and a Dollar Short; Harder than it Appears; Spinning the Truth
Day Late and a Dollar Short House Ways & Means Trade Subcommittee Ranking Democrat Earl Blumenauer (Oregon) has introduced legislation reauthorizing the long expired Generalized System of Preferences (GSP), Trade Adjustment Assistance (TAA) and Miscellaneous Tariff Bill (MTB). The reauthori...
Geopolitics Trumps Trade; Sinking into Oblivion
Geopolitics Trumps Trade President Joe Biden hosted Indian Prime Minister Narendra Modi today despite the latter’s dubious record on democracy and religious freedom. Biden is seeking Modi’s support in the competition with China and wants less Indian cooperation with Russia. By contr...
Sinking Ships
Russia says it expects the Black Sea grain corridor agreement to end on 18 July, though it is willing to keep talking. The Russian deputy foreign minister said that even if the agreement with the UN for Ukrainian grain shipments end, Moscow expects its agreement for exporting Russian grain to c...
Obrador Doubles Down; NGT’s Moving Forward; Tyranny of the Small Minded
Obrador Doubles Down President Andres Manuel Lopez Obrador is compelling Mexican tortilla makers to only use non-GMO white corn. He said he will impose tariffs on imported white corn to ensure that corn is only sourced from domestic producers. The move implies concern that Mexico will lose a tr...
Failed Prop 12 Strategy; Shallow View of Trade; My AI Can Beat Your AI
Failed Prop 12 Strategy Some members of the U.S. Congress urged on by governors in 11 states are proposing legislation that would prevent state and local jurisdictions from regulating food practices impacting other jurisdictions. The goal is to reverse the Supreme Court’s ruling in favor...
China Balancing Act; USMCA Loophole
China Balancing Act A diplomatic spat between Seoul and Beijing has relations between these two East Asian neighbors quickly souring. Meanwhile, Chinese President Xi Jinping is turning up the heat on Japanese Prime Minister Fumio Kushida by mentioning the Japanese island of Okinawa and its supp...
TPP Re-enactment Society; Exporting Emissions; Pott versus Kettle
TPP Re-enactment Society USTR says the next and fourth round of negotiations on the Indo-Pacific Economic Framework (IPEF) will be held in Busan, South Korea during 9-15 July. Responding to critics of the Biden Administration’s relatively modest trade negotiating goals focused less on inc...
Factors of Inflation
The monthly CPI for May was up 4 percent over 12 months; that is down from the April to April annual increase of 4.9 percent and slightly below the pre-report expectations of 4.1 percent. The May increase of 0.1 percent was the smallest 12 month increase since April 2021. A drop in...
Policy Shorts for Mid-June
USTR: Two years ago, it would have been deemed implausible but USTR Katherine Tai is now being criticized by Congressional Democrats for a lack of consultation and transparency. Congress on Trade: Bipartisan legislation has been introduced by members of the House and Senate committees ove...
Trade Policy Knocking
Except for an overstated IPEF, President Biden has put trade policy up on a shelf but there is knocking from all directions to put its policymaking back on a working desk. The most blistering attack comes from Robert Zoellick, a former White House, State, Treasury, USTR and World Bank intellect...
Greenest Exporters; Slow to Go Green
Greenest Exporters Transatlantic duties on steel and aluminum were suspended in 2001 after the U.S. and EU agreed to pursue a Global Arrangement on Sustainable Steel and Aluminum. The arrangement would “use trade policy to confront the threats of climate change and global market distortio...
Brazil Helps Brussels; Transatlantic Double Vision
Brazil Helps Brussels EU foreign policy has designated Latin America as the region of the world deserving closer relations. Most of the countries in the region were settled by Europeans and there is a perceived sharing in values. However, an EU free trade agreement with Mercosur (Argentina, Bra...
Forever Poor
Dhaka’s The Daily Star reports that Bangladesh seeks to avoid the increased trade disciplines that comes with the country’s elevation above least developed status. Except for the covid lockdown period, Bangladesh’s economy has been growing at 7 percent or better each year. Off...
Diverging Data on Jobs
As WPI has reported many times over the past two years, conventional economic data is difficult to decipher because the impact of COVID and its aftermath were anything but conventional. It was concurrently an increase in consumer spending power and demand, while a slow-down, to shut down in eco...
Challenging Mexico GMO Policy; Inequitable Ethanol Policy; Ties to Taiwan
Challenging Mexico GMO Policy The U.S. formally requested USMCA dispute settlement consultations with Mexico over its proposed ban on GMO corn. The move comes months after initiating informal discussions that have gone nowhere. Former Mexican agricultural trade negotiator Kenneth Smith Ramos ha...
SNAP and Meat and Poultry Retail Demand
USDA released its updated food expenditure series this morning. Going into the farm bill and SNAP debate – and in light of the debt ceiling deal which makes some reforms to SNAP – the trend line of government spending on consumer food purchases is noteworthy for its steep incre...
Deforestation Proxy; Perpetual Crisis; Perpetual Costs
Deforestation Proxy It was revealed this week that Brazil is exporting 120 KMT of soybeans to the U.S. and the State Department immediately announced that the Biden Administration will use trade policy to reverse deforestation, including imposing import restrictions on goods where production im...
Siloing of U.S. Agriculture; TTC Happy Talk; I{EF Spotlight
Siloing of U.S. Agriculture California state legislators saw the Supreme Court’s green light on Prop 12’s Sacramento driven animal welfare standards and ramped it up this week. They declared a ban on the use of some specific chemical additives in food products (coloring dye Re...
IPEF Blah, TTC Heat; African Woes
IPEF Blah, TTC Heat USTR Katherine Tai achieved agreement over the weekend on language focused on supply chains in the Indo-Pacific Economic Framework for Prosperity. However, it is all a bit boring. Basically, countries agreed to a process to talk and “work together” on issues. Mea...
Memorial Day Holiday
U.S. financial markets are closed on Monday, 29 May and consequently there will be no Ag Perspectives report on that day. WPI's analysis reports will resume on 30 May. We wish everyone a delightful three-day weekend...
Meat Loaf Wisdom; Enemy of My Enemy
Meat Loaf Wisdom U.S. Trade Ambassador Katherine Tai concluded a U.S. led meeting of APEC trade ministers in Detroit today without an agreed joint statement. Russia and China blocked a draft statement that included a condemnation of Russia’s war on Ukraine. She said she hopes a joint stat...
Wetting Down Party; DeGrowth for All
Wetting Down Party Farmers, real estate developers, and industry are celebrating a Supreme Court ruling that limits the government’s regulation of certain wetlands. The conservative majority ruled that the navigable waters of the U.S. means a continuous surface water connection – th...
Europe’s Bad Boy; Africa’s Bad Country
Europe’s Bad Boy Hungarian Prime Minister Viktor Orban is not well liked in Brussels, nor in Kyiv. Not only does he rankle Western Europe’s democratic virtues, but he also appears to side with Vladimir Putin. Yesterday he said that Ukraine has no chance of winning the war against Ru...
USMCA Action and Future; Geopolitics Drives Trade Policy
USMCA Action and Future Washington invoked the USMCA’s rapid-response mechanism against Mexican worker rights violations for an eighth time. The Biden Administration is following U.S. organized labor’s requests as they see their manufacturing jobs shifting to Mexico’s lower wa...
Follow the Money
UN Secretary General Antonio Guterres attended the weekend’s G-7 summit in Hiroshima. At the meeting, he suggested the UN Security Council and the Bretton Woods global financial institutions need to be updated. He correctly noted that their design was based on the dominant countries right...
Transatlantic Biofuel Split; Small Potatoes
Transatlantic Biofuel Split Brussels is ready to finalize its Renewable Energy Directive III (RED) with just one small glitch remaining. France and some other countries want hydrogen made from nuclear energy to be eligible as a low-carbon fuel. It is for certain low-carbon except for the nuclea...
Toward a New U.S. Trade Policy
For many years U.S. agriculture was able to compete as a low-cost, bulk commodity supplier. Its farms were large and consolidated, enabling economies of scale. Education and a skilled extension service meant farmers could concurrently be agronomists, engineers, and marketers. Financing was soph...
Debt Limit Spread; Agricultural Royalty
Debt Limit Spread President Biden says he will return early from his trip to the G-7 meeting in Japan due to the lack of agreement on raising the U.S. debt limit. House Speaker Kevin McCarthy says returning to the work requirements for social welfare benefits that existed pre-pandemic is a hard...
Zero Sum Technology; Big is Better
Zero Sum Technology The center-right European People’s Party is undermining codification of the Green Deal’s goal of halving pesticide usage. One EU official is quoted saying that if pesticides are not banned then there should be no adoption of new genomic techniques. Why should the...
Friday Mix Up
Doth Protest Too Much: China criticized Japan for its decision to host a NATO liaison office in Tokyo. It accused Japan of dismantling trust and stability in the region. U.S. troops are already stationed in Japan and NATO is no threat to China unless it is planning its own disruptions in the re...
Agriculture Exception; Sino Games
Agriculture Exception U.S. House Republicans are set to pass legislation today clamping down on border crossings but it required a last minute concession to the agriculture sector. The bill requires employers to use a government electronic verification system (E-Verify) before hiring to ensure...
Backdoor Farm Bill; Backdoor Grain Shipment
Backdoor Farm Bill President Biden has invited the top Democrat and Republican from both the House and Senate Agriculture Committees to meet tomorrow and discuss reauthorization of the $1 trillion-plus farm bill. It is rare for a president to get so directly involved in a generally less controv...
Defensive on Trade Policy
The Biden Administration is trying to shore up support for its trade policy ahead of next year’s election, but some are not buying it. National Security Advisor Jake Sullivan gave a long rambling speech on the topic last week but former USTR economist and now Progressive Policy Institute...
Anti-Big is Anti-Competitive; Biden Supply Chain Impacts
Anti-Big is Anti-Competitive White House economic advisor Lael Brainard bragged at last week’s anti-monopoly summit meeting that the Biden Administration’s “Meat Action Plan” subsidizing small meat-packing operations is providing more and better options to farmers and ra...
Building Hunger; Building Food
Building Hunger The Global Network Against Food Crises says global hunger rose for a fourth straight year, jumping by a third to about a quarter of a billion in 2022. Granted, the causes were the usual – conflict, economic crises, and trade disruptions. Plus, the UN says global food price...
Directing the Money; Nativistic View
Directing the Money U.S. Senate Agriculture Committee members are having a dispute over money already allocated. Democrats passed the Inflation Reduction Act (IRA) last year without support from any Republicans. They directed $18.4 billion be spent increasing agriculture’s climate resilie...
Dollar Direction
China, Russia, and Brazil are not the only entities betting against the U.S. dollar. The Invesco DB US Dollar Index Bullish Fund peaked last October at 30.36 and has fallen 8.6 percent since then. The opposite bet, the Invesco DB US Dollar Index Bearish Fund is up 11 percent over that same peri...
Playing Down Tariffs; Solidarity Lines; Mixed Africa Report
Playing Down Tariffs President Biden’s National Security Advisor Jake Sullivan last week conceded that “there is still work to be done bringing tariff levels down in many other countries” but insisted that there are other fundamental trade priorities than simply bringing down...
Another Ethanol Victory; Mexican Fanático
Another Ethanol Victory The ethanol industry scored two wins this week. House Republicans trying to eliminate the ethanol industry’s tax breaks as part of a debt ceiling bill conceded to their Midwest colleagues by keeping the incentive intact. Then on Friday, the Biden Democrat-run U.S...
Conflicting UN Advice; Recession/Republican Nominee
Conflicting UN Advice UN Climate Action Office: Animal-based foods, especially red meat, dairy, and farmed shrimp, are generally associated with the highest greenhouse gas emissions. Where appropriate, shifting food systems towards plant-rich diets – with more plant protein (such as beans...
Karotousen in Miyazaki
G-7 farm ministers meeting in Miyazaki, Japan agreed on a communique with all of the usual window dressing. They worry about food security, the impact of the war in Ukraine, and they want to help developing countries. They even came up with a separate list of “Miyazaki Actions” that...
Mississippi River: From Drought to Flood
According to the National Weather Service (NWS), the water level on the upper Mississippi River is expected to reach its highest since 2001. The NWS weather forecast station at La Crosse, Wisconsin, reports that “the chance for a top five flood on record is high at all sites.” Snow...
Policy Shorts
Russian Grain Union leader Arkady Zlochevsky says Russia could export a record 60 MMT of grain this season. At the same time, he says the Black Sea grain corridor deal has not yielded anything positive for Russia. So Russia is exporting record amounts and doesn’t appear to need any specia...
Yellen Yelling Doublespeak; Wasted Breath
Yellen Yelling Doublespeak In his dystopian novel “1984,” George Orwell wrote about the way officials would use euphemistic or ambiguous language to disguise actual intent. The Biden Administration has perfected this approach. At the same time the U.S. is encouraging companies to mo...
Russian Politics of the Grain Corridor
Inspections of Ukrainian grain moving through the Black Sea corridor have been off and on this week as Russia briefly stopped processing them. In less than a month, Russia must decide whether to allow the UN-brokered deal to continue. Moscow is insisting reauthorization is conditioned on the We...
New Trade Agenda; Let Them Eat Pasta; U.S. Debt Limit
New Trade Agenda Members of Congress are upset that President Biden has followed his predecessor’s approach of largely bypassing the legislature when it comes to trade. To reassert their jurisdictional primacy on the topic, there is rare bilateral agreement to work on trade legislation th...
Hungry and Cold; Playing with Forests; Disappointing Free Access
Hungry and Cold Europe’s environmentalists want to go cold turkey when it comes to energy. Greenpeace is suing the EU for what it calls greenwashing as proposed rules would allow the continued use of natural gas and nuclear energy under certain circumstances. Policy officials are pragmati...
North Korea Food Policy
North Korea has managed to produce the largest undernourished population of any country, 41.6 percent. Like supporters of Cuba, some blame U.S. sanctions policy, although food is excluded from any restrictions. Joseph Yi at Hanyang University in Seoul calls for resuming aid and supplying aid wo...
Big Week for SNAP and the Farm Bill
The Senate Agriculture Committee will hold a hearing on the Supplemental Nutrition Assistance Program (SNAP) on Wednesday, 19 April. As WPI has mentioned many times previously, SNAP is one of the most contentious issues in the farm bill and thus the largest potential stumbling block to it...
Placating Eastern Europe; Nationalism Not Ideology
Placating Eastern Europe Slovakia joined Poland and Hungary in blocking grain imports from Ukraine, and Bulgaria is contemplating it. Brussels initially threatened the miscreants for breaching the EU’s trade policies. However, the expanding boycott caused a further examination and instead...
Threat from Within; El Niño’s Arrival; Biggest Worry
Threat from Within Dissing both the dollar and U.S. foreign policy was very popular this week. It started of course with French President Emmanuel Macron doing so in China on behalf of Xi Jinping, and then ended with Brazil’s Lula da Silva channeling his inner Macron with a similar messag...
Transatlantic Duality; No Ag for Kenya; Black Sea Hurdles
Transatlantic Duality EU Trade Commissioner Valdis Dombrovskis is in Washington this week and had some notable messages. For one, he said that the EU’s carbon border adjustment mechanism, which restricts trade, is WTO legal, while subsidies that only indirectly affect trade are not. Then...
Shadowy Trade Policy; Spinning Economics
Shadowy Trade Policy White House press spokesman John Kirby prefaced President Biden’s trip to Northern Ireland this week by saying, “He’s going to talk about trade and economic prosperity in Northern Ireland and all the opportunities that opens up between ... the United State...
Farm Bill and Water; Another Threat to IRA; Tortilla Torture
Farm Bill and Water For the first time in history, the federal government may intercede and impose restrictions on the water withdrawal by states in the Colorado River basin. The draft plan would reduce allocations to Arizona, California, and Nevada, likely spreading the pain evenly. The move c...
Danger of Corn Dispute Delay; Dissecting Food Inflation; Farmers Pushed to Edge
Danger of Corn Dispute Delay At the late March hearing before the Finance Committee, Senator Chuck Grassley (R-Iowa) pressed USTR Katherine Tai not to delay taking formal action against Mexico for its proposed ban on GMO corn imports. She made no specific commitment and now the earliest date fo...
Rhetoric and Economics; CAFO Monster
Rhetoric and Economics USTR Katherine Tai made another valiant attempt this week to defend the Biden Administration’s trade policy. Her reassurances sound good because they are a bit Pollyannish. She repeated most of the current Administration thinking on trade policy – that the tra...
TTC Distractions; Public Research; Dark Shopping Goes Dark
TTC Distractions The U.S. and EU confirmed that the next meeting of the Trade and Technology Council will be next month in Sweden. The agenda supposedly includes Ukraine, economic security and resilient supply chains, and other issues. The “other” may come to dominate the session. T...
Famers Concerns on Interest Rates
Purdue University released its Ag Economy Barometer today; the barometer is a joint project with the CME Group and is based on a monthly survey of 400 producers. The March Barometer dropped 8 points to an index level of 117. It was 113 for March 2022, which was the lowest since May 2020 at 103...
Oil versus Grain; Canadian Disappointment
Oil versus Grain In the conflict with Russia, the G7+ has employed a cap on the price of petroleum. The goal is to reduce Russia’s export earnings and thus undermine its war effort. By contrast, the goal has been to help Ukraine, both with munitions and the EU waiving duties on that natio...
Food Assistance Inconsistencies; China versus West in Africa; Biden Protectionism
Food Assistance Inconsistencies Domestic food assistance programs and their funding levels are a key topic for the 2024 farm bill. Angela Rachidi at the American Enterprise Institute points out that the Biden Administration has proposed better aligning the school lunch program’s food offe...
Lucy Pleases No One; DSP Reform; Planting and El Nino
Lucy Please No One In the cartoon Charlie Brown, Lucy would always remove the football just before Charlie Brown tried to kick it. In the case of EV vehicles, President Biden is Lucy as trading partners expected him to open up EV tax credits to them, but Treasury’s regulatory notice today...
AI and Agriculture; Worker Centric Trade Policy is Dead
AI and Agriculture AI is the rage with some warning it will lead to human extinction, and others comparing its transformative impacts to the internet and smart phones. Those technologies have had their share of ethical concerns but the genie is now out of the bottle and short of government regu...
Friend-shoring Challenge
Friend-shoring or moving supply chains closer to being between like-minded nations doesn’t seem like an agriculture issue but it could become one. That is because the sector is increasingly being treated like a strategic asset, and it faces differentiated production standards as regulatio...
Unhelpful Timing; Tai Strengths and Weaknesses; IPEF’s Weakness
Unhelpful Timing The U.S. agriculture sector unleashed a pro-trade barrage on the Biden Administration this week and USDA bureaucrats wittingly or unwittingly contributed to the onslaught. U.S. agriculture is highly dependent on trade. It was first battered by Donald Trump’s trade war and...
Farm Bill Foci
While the human diet is a complex affair and animal protein, unlike many other commodities, lacks a title in the Farm Bill, it is the most egregious food to some activist groups. They specifically cite the contribution of livestock to climate change. These groups have some work cut out for them...
Ready to Discuss; Iowa Competitive
Ready to Discuss After previously calling it unsustainable, the Biden Administration has reportedly notified WTO members that it is “ready to discuss” a 10-point proposal for reforming Special and Differential Treatment (S&DT) that has been drafted by developing countries. While...
Uncomfortable Hearing; Real Politik is Complicated
Uncomfortable Hearing Today, USTR Katherine Tai faced the music on the Biden Administration’s trade policy and heard bipartisan disappointment. The hearing before the Senate Finance Committee was generally more cordial than the tone at times, but it couldn’t have been comforta...
Kabuki Theater; Miscalculating Farmers; Greed is a Bogeyman
Kabuki Theater Agriculture groups sent a letter to Congress this week asserting that the sector is falling behind competitors due to the lack of new free trade agreements. They want Trade Promotion Authority (TPA) renewed so that the President can negotiate “free trade agreements” (...
Miscellaneous Things Being Read
Transatlantic Relations The White House has language on a minerals deal will the EU that will likely be a topic at Thursday’s Senate Finance Committee hearing featuring USTR Katherine Tai. Not all senators are keen on the transaction. Some agriculture state senators prefer a trade negotia...
Limiting the Options; Legislators Know Best
Limiting the Options Some policymakers in Brussels have held the view that tight limits on the use of pesticides and fertilizer can succeed if new breeding techniques (NBT’s) are used to genetically make plants hardier and self-sustaining. However, now it is reported that the German Agric...
Testy on U.S. Trade Policy; Trade and GDP; Prospective Plantings
Testy on U.S. Trade Policy USDA Secretary Tom Vilsack testified this week before the Senate Agriculture Committee and while most of the hearing was tame, the one contentious issue was trade. The Panel’s Republicans echoed the demands of their farming constituents by telling the Biden Admi...
Biden to Get Waterboarding; MRL’s Too Flexible
Biden to Get Waterboarding Regulating water quality under the U.S. Clean Water Act has become a political football, changing policies with each change of party in the White House. However, it looks likely that President Biden’s crack at regulating the Waters of the U.S. (WOTUS) is headed...
Pet Food Bonanza
U.S. dog and cat food exports have risen 3500 percent over the past five years, one of the fastest growing categories of trade. It is on a path to rise over 200 percent in 2023. There are a few different reasons for this explosive growth. The first is that the U.S. has the highest per capita ra...
ICE and N-P-K
Second thoughts in policymaking are usually better than no thought at all. If it is meant to be, it will. Almost two years ago European politicians agreed to end the selling of automobiles with internal combustion engines (ICE), and to slash the use of fertilizer (N-P-K) and pesticides in crop...
Industrial Farm Policy
China has announced that its state policies to support food production will be increased. Nearly every country has an industrial farm policy. The OECD estimates that of the 54 countries monitored, $817 billion is spent annually in support of agriculture. But some are more effective than others...
Our Complaints Too; Success of Options; IPEF Wisdom; Into the Fire
Our Complaints Too EU Commission President Ursula von der Leyen was at the White House today to initiate a bilateral agreement with President Biden on joint sourcing and production rules for critical minerals. The agreement is an attempt to placate Europe’s frustration with American subsi...
Please Don’t Make Me Graduate; Jones Act Burden; Record Presidency
Please Don’t Make Me Graduate Growing up is hard to do and least developed countries (LDC’s) are resisting losing their special trade benefits when their economies grow out of the LDC status. Presenting a litany of excuses in Geneva, they want LDC benefits extended even when they gr...
High Stakes in Mexico Corn Case; Livestock Scale Questions; Digital Competition
High Stakes in Mexico Corn Case AMLO has said he is ready to go to a dispute settlement case to defend his ban on GMO corn from the U.S. He is arguing that it is necessary to protect the genetics of 59 indigenous corn varieties. U.S. government trade officials have been historically reluctant t...
Meat Needs Work, Know Cheese, Not Europe, Can’t Beat ‘em, Join ‘em
Meat Needs Work The U.S. meat industry is feeling good because demand for its product remains strong. Inflation and economic doubts have shoppers economizing on where they buy and the form it is in, but not the fundamental product. However, animal welfare activists are stepping up their game an...
Policy Shorts
Procedural Action on Mexico: The Biden Administration has formally requested technical consultations with Mexico under the USMCA to discuss the proposed GMO corn ban. The consultations are a technical requirement before a formal dispute settlement can be filed. Given Mexico City’s prior f...
Tai’d Down on Trade
The Biden Administration has done the impossible – it has united Congressional Democrats and Republicans on an issue, and not in a good way. It turns out that Congressional trade folks felt good when they came together back in 2020 and in a strong bipartisan fashion, voted overwhelm...
Tooling Up; Ignoring the Elephant; Buffaloes and Cows
Tooling Up Yesterday, USTR issued its annual report for 2022 and the President’s 2023 Trade Policy Agenda. The 354-page document will no doubt be read thoroughly by America’s trading partners. One thing they will notice is that USTR likes tools. In fact, the word tool is used 48 tim...
AMLO Channels Inner Trump; Trump Stumbles; Industrial Policy Warning
AMLO Channels Inner Trump Thousands of Mexicans protested in the streets against Andrés Manuel López Obrador’s decision to water down the power of the National Electoral Institute. U.S. Secretary of State Antony Blinken echoed the concern of the protestors, drawing criticism...
Limits on Trade Blocs; Short Supply Chain BS; Small Farm Solution BS
Limits on Trade Blocks De-friending, reshoring, carbon border measures and other narrow views of global trade may have their limits. The EU’s Sabine Weyand, head of the EU’s DT Trade unit told a Berlin conference on greening trade policy that Europe cannot limit its trading relation...
Streisand Salvation; WOTUS Cost; The Money Pit
Streisand Salvation Stealing an idea from energy writer Robert Bryce, what if the Green Deal/F2F is inadvertently boosting the prospects for ag chemical companies? Bryce notes the “Streisand Effect” whereby the world famous entertainer Barbara Streisand sued a photographer to stop p...
Diversity of Scale; Calories versus Micronutrients
Diversity of Scale Tom Vilsack is one of the longest serving secretaries in USDA history. The one-time presidential candidate is a likeable and formidable character. Yet at this week’s annual USDA Outlook conference he tried to talk farmers out of getting big, and instead to go into diver...
WTO and Inclusion; Putin Boosts Trade; Boohoo, Yoohoo
WTO and Inclusion There is much frustration in Geneva over the policy gridlock at the WTO. The EU has proposed a set of three objectives for the institution: trade policy and state intervention in support of industrial sectors (looking at you China and Biden’s IRA); trade and...
Future of World Trade; Inflated Politics
Future of World Trade While U.S. Trade Representative Katherine Tai characterized the WTO as being on ‘thin ice” for a dispute settlement case declaring US. claims of national security an invalid basis for trade barriers, WTO Deputy Director General Anabel Gonzalez said the organiza...
Equilibration of Food Prices
International trade is supposed to equilibrate prices as the supply of goods or services flow to where they deemed more precious. Hog prices in Europe are currently 57 percent higher than in the U.S., which some believe creates an opportunity for transatlantic pork sales. However, open markets...
War Escalation and Food Security; India Courted
War Escalation and Food Security President Joe Biden visited Kyiv yesterday where he accused Russia of trying to starve the world. The U.S. also expressed concern that China will begin supplying lethal aid to Russia. Chinese Foreign Minister Qin Gang warned that, “We urge certain countrie...
Warren is Wrong; You Can’t Have Any Pudding
Warren is Wrong U.S. Senator Elizabeth Warren (D-Massachusetts) excoriated her own Party’s USDA secretary, Tom Vilsack, for failing to stop concentration in agriculture. She and others of her ilk apparently prefer poverty of the many. She complains there are too few agribusinesses competi...
Split Opinions Farm Bill; Who Lacks Trade Policy?; Spoiling Russia’s Commodity War
Split Opinions Farm Bill There are two sides to any fight in Washington, and it is an inelegant blood sport. Neither side respects the observation of renaissance American writer Elbert Hubbard that, “If men could only know each other, they would neither idolize nor hate.” Anyone in...
Mexico Ignores Science Question; Bad Idea; False Impression
Mexico Ignores Science Question In response to U.S. Agricultural Trade Ambassador Doug McKalip’s throwing down the gauntlet and demanding by today the scientific basis for Mexico’s GMO corn ban, AMLO equivocated. His government announced that the deadline had been moved and that GMO...
Tee Up Warnings; Takes One to Know One; Nutrition and Meat
Tee Up Warnings Learning that some Progressives in Congress want to amend crop insurance and increase conservation requirements, Ranking Member on the Senate Agriculture Committee John Boozman (R-Arkansas) had a message for them at last week’s hearing on Commodity Programs, Crop Insurance...
Valentine Kiss; Farm Bill Implications; Trade as a Weapon
Valentines Kiss USTR Chief Agriculture Negotiator Doug McKalip gave his counterparts until 14 February to respond to the U.S. demand for answers to its questions about the science Mexico is using to justify bans on GMO corn and glyphosate. The U.S. sugar industry now realizes it could be advers...
Biden’s Error in Commodity Strategy; Chasing Sri Lanka
Biden’s Error in Commodity Strategy The U.S. is the world’s largest oil and gas producing nation. Russia is a close number two. But note the following: First, almost a fifth of the Russian economy is based on oil and gas, versus just 8 percent of the U.S. economy. Second, and...
War on Big Ag; Gene Editing Regulation
War on Big Ag At a conference hosted by anti-Big Ag activist group Farm Action, vegan and anti-Big Ag U.S. Senator Cory Booker (D-New Jersey) called for a moratorium on Combined Animal Feed Operations (CAFO’s). He called the large livestock feeding enterprises cruel to animals, environmen...
Biden SOTU versus EU Hopes; Child Labor Perversity
Biden SOTU versus EU Hopes President Joe Biden in his State of the Union address tonight will call for increased application of Buy America provisions in government contracting. Separately, German Economy Minister Robert Habeck thinks a free trade agreement with the U.S. limited to just critica...
India’s Rise; Critic versus Constructionist
India’s Rise The world’s largest democracy has refused to criticize or disengage from Russia’s autocratic regime. Prime Minister Narendra Modi is playing his country’s power card between Russia and the U.S. The Biden Administration will pour on a full-court press this ye...
What to Make of the January Jobs Report
Last Friday the Labor Department released a shocker of a jobs report: 517,000 new jobs created in January. The pre-report consensus was 188,000 jobs. Unemployment was 3.4 percent, the lowest in more than 50 years. The number was a surprise because it came after a barrage of headlines about mass...
Jurisdictional Competence; S&DT Short-Sightedness; Non-Starter
Jurisdictional Competence This week agriculture ministers from 16 EU countries sent a letter complaining that too many legislative issues impacting agriculture are being decided by environment ministers and without the input of those with expertise in farming. Brussels might look at the ways th...
Obesity Scapegoats; Russian Humor
Obesity Scapegoats It has been popular to blame the rise in obesity on the proliferation of cheap, calorically dense “junk” foods. Most analysts begin their story in 1980, since that is when the government began advising low-fat diets and instead everyone took up sugary carbohydrate...
Farm Bill Hearing Highlights; Rising U.S. Nationalism; Deglobalization Debunked
Farm Bill Hearing Highlights The Senate Agriculture Committee held a hearing today on the horticulture and trade sections of the Farm Bill with a focus on updates. Concern about Mexico’s proposed ban on GMO corn was a bipartisan concern. Newly confirmed USDA Under Secretary for Trade Alex...
New Trade Agenda; Walk the Meat Talk
New Trade Agenda Tomorrow will present the Senate Agriculture Committee’s first hearing in preparation for writing a new Farm Bill and the first two topics are trade, and horticulture. It will be the first hearing for newly confirmed USDA Under Secretary for Trade Alexis Taylor. The line...
Philippines Agriculture; Future Trade Policy
Philippines Agriculture After remittances from overseas, agriculture and fisheries are the most important industries in the Philippines. A country of 114 million people of which one-quarter are engaged in agriculture. It is such an important sector that President Ferdinand “Bongbong&rdquo...
USTR Downgraded; Lightweight Committee
USTR Downgraded The Office of the U.S. Trade Representative sits inside the Executive Office of the President. No different than other offices situated under the umbrella of the White House, it serves as both a lead and a coordinator amongst the various departments and agencies. Typically, depa...
Dirty Deal; Standards Battle
Dirty Deal During the early days of negotiating the Uruguay Round, industry leaders fretted that trade liberalization aspirations would be thwarted by protections sought by agriculture. Spin forward nearly four decades and the reverse concern is at hand – sacrificing U.S. corn exports to...
Foreign Desk at State; IRA Confusion; Grain is Value-added Water
Foreign Desk at State Under Secretary Jose Fernandez has proved that an American desk is needed at the State Department. Speaking at the Center for Strategic and International Studies, the tin-eared Fernandez said that market access is not as important as it used to be because U.S. tariffs are...
Policy Shorts
Mexico Shrug U.S. trade officials meeting with their Mexican counterparts raised "grave concerns" over AMLO’s agricultural biotechnology policies and said modifications proposed thus far are inadequate. They committed to fully defend U.S. rights under the USMCA. The issue carries urgency...
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...
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...
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...
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...
Innovate, Replicate or Regulate; Trade Policy Bias
Innovate, Replicate or Regulate U.S. Big Tech companies should take a lesson from their Big Ag counterparts – Europe is not your friend. Looking at artificial intelligence, EU Executive Vice President Margrethe Vestager says the "The choice should not be American or American.” Yet t...
Uncertainties Abound
Newly installed Argentine President Javier Milei told elites in Davos last week that they need to rally around capitalism because socialism has never improved the lives of people. His speech was welcomed by some in the audience but not by all back in Argentina. He now faces large protests in Ar...
NGT Controversy
Environmentalists in Europe are reportedly furious over the European Parliament’s Environment Committee approving the use of some new genomic techniques (NGTs) in an unregulated manner. One framing is that the conservative members of the Committee pushed it through, but conservatives comp...
EU Policy Developments; India PSH and MC-13; EPA Regulating Livestock
EU Policy Developments Farmer protests in Europe have increased and some credit the movement with softening Brussels’ views toward Ukrainian grain threatening producers in eastern Europe. However, farmers have also been protesting the Green Deal/Farm to Fork and efforts to change the way...
Changes in U.S. Agricultural Trade
The export of surplus U.S. agricultural production remains hugely important to some crops, especially for cotton and sorghum where over half of output is traded internationally, as well as for soybeans, wheat, and rice. From the 1980’s through 2017, U.S. trade policy was focused on expand...
People In, Pork Out; Prop 12 Int’l Problem; Ceding the Advantage
People In, Pork Out Earlier this year, the U.S. Supreme Court ruled that California could stop pork from Iowa from coming into the state if it was not produced according to the dictates of Sacramento. This week, the same court ruled that Austin cannot prevent migrants from coming into the state...
Whither Trade
Analysts are intensely studying the changes in trade flows and their composition following the reversal from free trade by the Trump Administration, the concerns about supply chains due to COVID, and now the de-risking of the West from China. Supply chains have gotten slightly shorter. Overall...
Tradition Tackles Progress; Data Confusion
Tradition Tackles Progress At least twelve EU member states are trying to block the introduction of lab-grown meat. The pretense is that such a product “raises ethical, economic, social, and public health questions” but the underlying rationale is that “These practices represe...
Not Magnanimous; Transatlantic Tech Divide; Advice for Europe
Not Magnanimous An AgriPulse poll of geographically dispersed farmers from across the U.S. with at least $100,000 in gross annual income reflects some greed but low compassion. As commodity values decline, farmers want higher reference prices to ensure income support from the government. They w...
Winter Gives Biofuel Boost
A record 1.2 million electric vehicles (EVs) were sold in the U.S. in 2023. EVs hit a record 8.1 percent market share in the fourth quarter. However, also growing fast and having larger sales are hybrid, using a combination of battery and typically fossil fuels. For agricultural producers, rule...
Transatlantic Commonality; Argentina’s NTB’s
Transatlantic Commonality Politico’s senior foreign correspondent Nahal Toosi noted that ambassadors in Washington are warning that U.S. power and influence in the world is declining due to the nation’s intense partisan political divide. But it is not exactly glory days in Europe. F...
Value of Scale Recognized
Agriculture ministers from five EU countries (Bulgaria, Poland, Romania, Hungary, and Slovakia) are asking the European Commission to come up with a solution to the harm they say is being caused by imports of grain from Ukraine. One option is to impose tariffs on Ukraine. However, it is their a...
Greens Whiff; State Aid Impacts
Greens Whiff Farmers in Europe are upset with their policymakers. The French farmers union has just announced it backs the protests being made by German farm groups. Taking a page out of the Biden White House playbook, German Greens are blaming supermarkets for the troubles being faced by farme...
Quackery Has its Limits; Cockroach Amnesia; Identity Budgeting
Quackery Has its Limits The USMCA panel opining on the Mexican ban on GMO corn has decided it will not accept comments from Canadian NGO groups wanting to support the Mexican position. First, the Canadian’s position in the case is largely amicus curae. Canada is a minor producer of...
Chips War; Domino Effect
Chips War China complained that Washington’s export restrictions on semiconductors and on Chinese telecommunications companies violate WTO principles. There are larger worries than that. China has just taken over the number one position as a global automobile exporter and Washington worri...
Trade Deficit Down, Job Creation Up: A Look Under the Hood
Two recent economic reports have generated attention: the November balance of payments trade deficit and the December payroll report. There are tea leaves to be read for both. First, the trade deficit for all goods and services in November was down 2 percent, to $63.2 billion. The...
Eyes Open on India
USDA is leading a trade mission to India, noting that it is 1.4 billion people or 18 percent of the global population but accounts for less than one percent of U.S. agricultural exports. Average tariff rates tend to be higher in developing countries and lower in developed countries. But India&r...
Bright Belgian Light; SSA Riddle
Bright Belgian Light According to Euractiv, Belgian Federal Minister David Clarinval said he would emphasize food sovereignty as he assumes the Presidency of the EU’s Agriculture Council for the next six months. He said, “we must provide farmers with the tools to produce sufficient...
PepsiCo, Carrefour and GI’s; ChatGPT Goes Harvard
PepsiCo, Carrefour and GI’s A major story this week is major French retailer Carrefour saying it is dropping PepsiCo products because its prices are too high. It is not unusual for American companies to face attacks from the French but inflation is not a problem that PepsiCo has manifeste...
Russian Agriculture Enigma; Imbalanced Analysis
Russian Agriculture Enigma Among the many elections this year is Russia’s during 15-17 March. Vladimir Putin will be overwhelmingly elected. He has been effectively in control of the country for 23 years. Andrei Kolesnikov at the Carnegie Endowment for International Peace says that Russia...
Trade is Dead, So is Ag; Siloed America
Trade is Dead, So is Ag The U.S. agricultural trade balance has reversed, going from positive to negative. Industry leaders are arguing that the solution is more trade agreements but that is unlikely. President Biden has pulled back from his pursuit of minimalist trade objectives in the IPEF ta...
2024 Food Industry; Continued Multipolarity; AI Restrictions Emerging
2024 Food Industry Politico says the Biden Administration will crank up its anti-big business efforts for this election year. A long list of anti-trust investigations are coming to fore, including against Big Ag. Targets include the merger of grocery retailers Kroger and Albertsons and stopping...
Old President, Old Allegiances
President Biden sided with the steel workers union and will put Nippon Steel’s purchase of US Steel through the “serious scrutiny” of the Administration’s own Committee on Foreign Investment in the United States (CFIUS). As noted previously (Blatant Nationalism), Nippon...
Bitter Problem; Blatant Nationalism
Bitter Problem The U.S. sugar program is an protectionist abomination emanating from a political deal in the 1981 farm bill. Unlike other crops that are subsidized directly by the government, sugar erects restrictive import quotas and then forces American consumers to pay 2-3 times the world pr...
232 Confusion; Green Border Measures
232 Confusion WTO dispute settlement rulings are arcane, highly legalistic, but sometimes contradictory to the layman’s eye. The latest case is a ruling against Turkiye for its retaliation against U.S. Section 232 tariffs against steel and aluminum imports from the Turks. A year ago, a pa...
Ag Exports Not the Panacea
According to the FAO agricultural trade index, Africa has experienced the relatively largest jump in the past decade, followed by North and South America. Yet the share of global GDP for both Africa and South America remains low. Despite the boom in agricultural exports where it is now dominati...
Not Walking the Talk; Music Protectionism; North-South Divide
Not Walking the Talk The European Environmental Agency has assessed the EU’s commitments and concludes that the goal of reducing emissions 55 percent from 1990 levels by 2030 can be achieved. However, most others will not. One of the farthest from progress is designed to address land use...
Policy Shorts
Jones Act: The EU is correctly arguing that the Jones Act, an American law restricting intra-U.S. shipping be restricted to domestically built and operated ships is trade distorting. Washington argues its original purpose, to ensure the supply of domestic ships for national security, remains a...
Fed Crosses Finish Line
The Federal Reserve held interest rates steady on Thursday, indicating that it considers it has crossed the finish line in its effort to rein in inflation. The federal funds rate was held at an effective 5.375, the midpoint between 5.25 and 5.5 percent. Earlier this week, the November inf...
EU Reveals Export Future; Swiss Choose Expensive Food
EU Reveals Export Future The fundamental debate in Geneva between agricultural exporting countries and developing countries is domestic support versus market access. The perfect quid pro quo is rich countries reduce support and developing countries grant market access. Developing countries cann...
Market Commentary: Policy Front and Center for Commodity Trade
Macroeconomic and commodity market policy factors were front and center for the CBOT’s trade on Wednesday, following the devaluation of the Argentine peso and the Federal Reserve’s interest rate decision. Both policy decisions came in as expected with the Fed holding rates unchanged...
Wishful Thinking on China Retaliation; Wishful Thinking on NGT’s
Wishful Thinking on China Retaliation The U.S. House Select Committee on the Strategic Competition Between the United States and the Chinese Communist has recommended tariffs to equilibrate the trading terms between the two countries. The Panel recognizes that China is likely to retaliate, and...
Aggies See China Pain; SUR Revival; Meat and Oil
Aggies See China Pain China has been the top market for U.S. agriculture since 2020 and its share in some products is overwhelming. For this reason, a coalition of agriculture groups wrote to the Congress’ U.S. Select Committee on the Chinese Communist Party asking that the Middle Kingdom...
GI’s for EV’s; Policy Roundup
GI’s for EV’s Europe’s leaders’ real concern when meeting with their Chinese counterparts last week was not the growing trade deficit generally, but specifically the flood of imported Chinese built electric vehicles. China provides subsidies for their manufacture, and th...
Mercosur Regional Analysis
Argentina’s Policy and Macroeconomic Situation Argentina’s trading last week was shortened due to a national holiday on Friday. At the same time, it was the week before the newly elected President took office on Sunday, and expectations of a dramatically different approach to...
Farm Financials Going into 2024
USDA’s 30 November farm income forecast shows net farm income at $151.1 billion for CY 2023, a decrease of $31.8 billion, or 17.4 percent, relative to 2022 in nominal dollars. In inflation adjusted dollars, net farm income is forecast to drop $37.9 billion, or 20 percent from 2022. This i...
Looking at the GDP Revision
Back in October, the initial, or advanced, Q3 GDP report showed the U.S. economy grew 4.9 percent; and on 29 November the GDP estimate was revised up to 5.2 percent, which made Q3 the fastest growing GDP since 2021. The Bureau of Economic Analysis (BEA) regularly calculates and reports GD...
Political Risk to Agribusiness
The Biden Administration and others have already shown their animosity toward Big Ag. Heading into 2024 the hate may grow larger. The President’s reelection campaign, and that of the Democratic Party, is threatened by voter dissatisfaction with the economy. Specifically, they are upset ab...
Hobbling AI; Chinese Spin; F2F Setback
Hobbling AI The EU has neared agreement on doing what it does best, regulating. This time its target is artificial intelligence. France and Germany were reluctant participants because they have their own startup AI companies and didn’t want to hobble them. Regulatory hobbling from Brussel...
NGT Optimism; New Old Threat to Trade
NGT Optimism EU Parliament rapporteur for the Commission’s proposed new policy on new genomic techniques (NGT’s) is Jessica Polfjärd and she is expressing optimism that she can get the portfolio approved in January. She told Euractiv that otherwise it may “take potentiall...
EU-Mercosur Deal Smooshed
The multi-year effort to negotiate a trade agreement between the EU and Mercosur appears to have run into too many hurdles on both sides of the Atlantic. France is a key blocker in Europe, with claims that the environmental provisions are not tough enough on South America. Argentina said it was...
Decoupling or Redirected; Take, Don’t Give
Decoupling or Redirected There is much academic debate over whether U.S.- China trade has been decoupled, or merely redirected with Chinese goods diverted through other countries such as Mexico and Thailand. Part of the problem is using correlation to assume causation. Researchers at Penn State...
Tautological Rabbit Hole; Buy Small and Stay Home
Tautological Rabbit Hole The COP28 meeting in Dubai came to an agreement on a loss and damage fund whereby rich countries help poor countries weather the adverse impacts of climate change. Funding will be voluntary and it will be run by the World Bank, presumably with the controls necessary to...
Atlantic Risks; Mixed Reviews of Asks; Rural Anarchists
Atlantic Risks EU Trade Commissioner Valdis Dombrovkis is a serious and competent politician. He is now signaling that reaching a conceptual deal with the U.S. on the trade in steel and aluminum is stalled and without prospect. Meanwhile, the Biden Administration appears unable to make concessi...
Green and Brown Collide
Last week’s win in the Netherlands by Gert Wilders was a stunning refutation of the Green Deal. The policy’s former protagonist in the EU Commission, Frans Timmermans, was relegated to a minority role with just seventeen seats. He had left his Commission position with the idea of ru...
Rebalancing Global Meat; Unintended Water Consequences
Rebalancing Global Meat The UN’s Food and Agriculture Organization will present a plan at next week’s COP28 meeting in Dubai that calls for rich countries to eat less meat, while instructing developing countries to boost their livestock production to improve animal protein in their...
Major Dairy Defeat; Boomers’ Promise to the Future
Major Dairy Defeat In a major policy defeat for U.S. dairy, a USMCA dispute settlement panel ruled that Canada’s dairy quotas do not limit U.S. access. U.S. dairy exports to Canada have risen but at less than the level expected when Canada promised to make changes to its regime. Ottawa pu...
Farm Financials Ending 2023, Entering 2024
The Federal Reserve raised the federal funds rate four times in 2023 for a cumulative rate hike of 100 basis points, though it left rates unchanged in September and November. Higher borrowing and carrying costs have been the new normal in agriculture, a shift that will linger to some degree for...
De-Risking and Food
The Biden Administration went through a rapid succession of descriptors for its trade policy toward China before settling on de-risking. It initially called for decoupling but switched to re-shoring. This upset allies and so next it tried friend-shoring. It has stuck with de-risking for a while...
African Farming; European Farming
African Farming This is said to be the African Century. Over half the world’s population growth to 2050 will come from that region of the world. Yet its agriculture is woefully unable to feed the current population, let alone where it is headed. The average yield for maize this year in Af...
Cultivated versus Uncouth; All or Nothing; Genetic Enforcement
Cultivated versus Uncouth The Italian Chamber of Deputies passed a law banning the sale of cultivated meat. The law will prevent the production and sale of food or feed "from cell cultures or tissues derived from vertebrate animals." Apparently, you can only eat animals in Italy. But they&rsquo...
Inflation Rates Now Flat, but Prices Permanently Up
The Federal Reserve left interest rates unchanged at their 1 November meeting; Chairman Powell noted that this was a pause to let the 100-basis point increase in rates over the past year take full effect. This week, an initial sign that progress was being made was the October Consumer Price Ind...
Inclusive Trade; Transatlantic Imbalance
Inclusive Trade Diversity, Equity, and Inclusion (DEI) is framework embraced by the Democratic Party in the U.S. to remedy past discrimination, particularly against “historically” underrepresented classes of people. The Biden Administration decided to throw the inclusion concept int...
DE&I Comes to Trade; Green Deal Equals Deforestation
DE&I Comes to Trade It is busy this week on the U.S. West Coast. Asian leaders are negotiating with their American hosts on APEC, IPEF, and U.S. – China bilateral relations. The latter is supposed to become less prickly as Joe Biden and Xi Jinping meet for the first time in a year, bu...
Over-greening Bees; China versus Labor; Farm Policy
Over-greening Bees In 2018 we were all warned that a third or more of our food supply was being threatened by the struggles facing bees. Europe focused on insect pollinator health, including banning (with exceptions of course) neonicotinoid pesticides as a threat to pollinators. American resear...
China Teed Up; Reality in the House; Farmers Win in EU
China Teed Up President Biden meets with Chinese leader Xi Jinping next week outside the APEC meeting. Bloomberg suggests there could be a quid pro quo with China giving Washington assistance on defense issues, stopping the flow of fentanyl, and increasing transparency. In exchange, the U.S. wo...
Biotech for Environment; Transatlantic Negotiating Mandate; Indonesian Heat
Biotech for Environment Greens and others in the European Parliament reportedly reacted badly to rapporteur Jessica Polfjärd's initiative that would broaden the EU Commission’s proposal for lessening regulation of new genomic techniques. Yet it is genetic modification technologies th...
Trade Policy Developments; Dutch Politics
Trade Policy Developments The Biden Administration is making several adjustments to its major trade policy initiatives. First, while hosting a meeting last week of the Americas’ Partnership for Economic Prosperity, President Biden was forced to expand the agenda to include trade and move...
The Non-Sucralose-Coated Sugar-High; Ports are Princely; Future of Ag
The Non-Sucralose-Coated Sugar-High A recent poll indicating President Biden is in some reelection trouble even against Donald Trump doesn’t change the fundamental context for U.S. trade policy. Both politicians have now embraced protectionism on behalf of manufacturing labor. While Mr. B...
AI versus GMO; Self-Immolation; Too Hot to Handle
AI versus GMO Political leaders gathered in Bletchley Park at the invitation of UK Prime Minister Rishi Sunak and agreed to a global dialogue on regulating artificial intelligence. There was a similar meeting in Hong Kong. They want AI businesses to include responsibility in their models, and a...
PPE Your Meat; Speaking Truth to Food
PPE Your Meat President Biden’s Midwest tour included a Christmas tree of presents to rural America. He echoed USDA Secretary Vilsack’s concerns about industry concentration and said the government would spend money to create small meat packing companies and other populist ideals. H...
Biden Rural Approach; AI Feint
Biden Rural Outreach A politician going into the geography of the opposition is usually connoted as a sign of strength. Nothing in the Biden presidency polling suggests strength but the President’s foray into rural America this week connotes a strategy of at least reducing the opposition...
Coercion Beholder; Down Under’s Demands
Coercion Beholder U.S. Supreme Court Justice Potter Stewart famously said in a 1964 case that he could not define hard core pornography “But I know it when I see it.” The G-7 called for an end to boycotts of purchasing Japanese farm products, calling it a form of coercion. Meanwhile...
Economic Coercion; Good for the Goose; No Surprise
Economic Coercion Australia’s trade minister is in China where a rapprochement in relations is underway. Beijing had earlier sought to punish Australia for Canberra demanding more information on the origins of COVID. Australia subsequently found other markets for the productions China int...
Farm Bill Schedule; Digital Protectionism
Farm Bill Schedule Congressman Mike Johnson (R-Louisiana) appears poised to capture the position of House Speaker. If successful, he will prove the axiom that it is not the best candidate that wins a position, but rather the least disliked. He also heard and responded to complaints from the Hou...
Wide Divide Ahead of MC 13; Value of NGT’s; Polish Politics
Wide Divide Ahead of MC 13 All sides remain far apart at a WTO senior officials meeting looking for deliverables at the coming MC12 meeting in Abu Dhabi in February. The Biden Administration is mimicking Trump policies that ignore the majority developing countries’ demands. The 90-plus de...
USMCA GMO Corn Panelists; Maritime Order
USMCA GMO Corn Panelists The U.S. and Mexico have agreed on the three jurists that will decide on Washington’s complaint about AMLO’s GMO corn ban. Hugo Perezcano Díaz is a former general counsel for international trade in Mexico’s Ministry of Economy. His work on inves...
Incongruous Economics
There are many similarities between the U.S. and EU, but many differences as well. When the common currency euro was introduced in 1999, it was valued at the equivalent of $1.16. It hit a peak of €/$1.58 in 2008 but has since slid back and is currently at €/$1.07. The forecast has it...
Elbow for an Eye; Eye for an Eye
Elbow for an Eye Legislation aimed at China has been introduced in the U.S. Congress to restrict foreign ownership of farmland. However, it is more nimble state legislators who are increasing restrictions on China in their jurisdictions. Arkansas has just ordered Syngenta to sell 160 acres of f...
Right View, Wrong Solution
Speaking at the World Dairy Summit, USDA Secretary Vilsack repeated his concern about the declining number of farms and farmers in America, and in a related dynamic the increasing concentration of income among larger farmers. As previously noted, a economic argument can be made for economic sca...
Elections and Policy; Appeal of Non-reciprocals
Elections and Policy Congressman Jim Jordan came up 20 votes short in his first-round effort to secure the Speakership of the U.S. House. Some farm state Republicans were seeking assurances from him that the farm bill will have a chance at passage this year. Historically, he has voted against f...
Technology Battle Ahead; Prosperity Rebuffed as Benefit
Technology Battle Ahead This year’s release of various AI models has prompted some political leaders to call on the Biden Administration to begin negotiating global rules on digital technology and trade. The fear is that other nationas will begin erecting barriers, some of which will be h...
Vilsack’s Baiting Rhetoric
USDA Secretary Tom Vilsack reportedly is asking farm groups how many farmers and how much farmland have gone away since 1981. He then cites the number of farmers lost as 437,100 and farmland as 141 million acres. He’s asking farm leaders if they are “okay” with those losses? F...
Biden’s Food Burden
There were mixed reactions to today’s CPI report for September, though it pushed Wall Street into its first sell-off in four days. U.S. core inflation, stripping out food and energy, dropped slightly last month, though the overall rate stayed steady at an annualized 3.7 percent. That is s...
Godwin’s Law and Food; Mother Nature’s Trade Barrier; Reciprocal Nonreciprocals
Godwin’s Law and Food Attorney and author Mike Godwin noted that the longer a discussion grows on social media, the increased likelihood someone will use the term Nazis or mention Hitler. The observation is that when it reaches the point of invoking a most despicable aspect in human histo...
Report: Ag Productivity Not on Trend to Meet Needs in 25 Years
A new report out of Virginia Tech University concludes that increasing agricultural productivity is not enough to meet demand for global ag production by 2050. Specifically, the report says that, … since 2011, average annual agricultural total factor productivity (TFP) growth...
Political Hacks on Prices; Seeing RED Herring; AMLO’s Short-term Vision
Political Hacks on Prices Food price inflation continues to torment consumers and ignoring its monetary policy-based roots, agribusiness remains a convenient scapegoat by politicians. Canada’s Justin Trudeau knows who to blame. To stabilize food prices, he wants credit for twisting...
Consumers’ Food Purchasing: Politics Matters
As the farm bill plays out – eventually - an interesting consumer survey was released last month by Purdue University’s Center for Food Demand Analysis and Sustainability. It reports on consumers’ food perceptions broken down by political ideology based on 20-months of monthly...
Ukraine Blows up CAP; Watered Down Trade Policy; Experts Have Value
Ukraine Blows Up CAP Some are worried about the impact of Ukraine joining the EU and specifically if it becomes part of the Common Agricultural Policy. Ukraine would produce 18 percent of the EU’s wheat and 57 percent of its sunflower seeds. Its production area is relatively huge and coul...
UK-U.S. FTA Unlikely
UK Secretary of Business and Trade Kemi Badenoch is correct when she says there is a “zero” chance of a trade deal with the U.S. She pins blame on Joe Biden’s marriage to labor unions, which oppose just about any kind of trade liberalization. Her analysis arrives amid rumors t...
Food Service Spending within Total Consumer Spending
Last week the personal income data for August was released; income in August was up 0.4 percent and on the year is up 4.8 percent. The driver was private sector wages, which were up 0.5 percent on the month and 5.6 percent on the year. That’s good news, compared to the COVID era when gove...
Green Machinations; Export Gamble
Green Machinations EU leaders are in a bind. Their candidate to assume the Green Deal portfolio, Marčos Šefčovič, is being pressed by EU Parliamentarians for commitments to enact all of the green promises. As a candidate and not yet a Commission official, all he can do is give vague assu...
Transatlantic Future; Redundant Legislation; Ineffective Opposition
Transatlantic Future A U.S.-EU meeting occurs in a few weeks and the number of topics is growing. Steel and aluminum tariffs are the only large trade issue, largely because Brussels doesn’t want to talk about agriculture, unless its about Spanish olives. Meanwhile, Europe is concerned abo...
No Government Shutdown for at Least 45 Days
The federal government is open this morning due to some unexpected and quick moving maneuvers on Saturday, the last day of FY 2023. A 45-day short-term continuing resolution (CR) was passed by the House and the Senate; that gives both chambers more time to work out a full year funding plan for...
Shutdown Exports; Killing the Messenger; Checking Out
Shutdown Exports The U.S. government will likely shut down this weekend because some Republicans are trying to leverage more budget discipline and other goals. The overall impact on the economy of a government shutdown is less than the clickbait media is trying to convey, but it does have odd i...
Green Tipping Point; Scale of Corruption
Green Tipping Point The media only covers the two extremes: climate deniers and climate alarmists. The climate alarmists have been winning but now it is the middle having their way. Those in the middle have been quite willing to make some sacrifices on behalf of slowing climate change. But they...
Farm Bill Delays; Small Farmers’ Big Complaint; Schöpferische Zerstörung
Farm Bill Delays The prospects for passing a farm bill this year are characterized from being very cloudy to increasingly getting worse. One academic said it is the worse political conditions for a farm bill that he has ever seen. The old farm bill coalition is in disarray and outside forces ar...
WTO Outlook; Food Safety Evolution; Subpar Eco Schemes
WTO Outlook USTR Katherine Tai last week described the WTO’s 13th Ministerial Conference scheduled for next February to be the first “reform ministerial.” However, she recognizes that U.S. ambitions such as increasing transparency, addressing non-market economies and fixing di...
Economic Growth: Is It Strong or Fragile?
Last week, the Fed’s FOMC left interest rates unchanged, as was widely expected, but the future outlook is less certain. According to Federal Reserve Chairman Jerome Powell, “The fact that we decided to maintain the policy rate at this meeting doesn’t mean that we’...
Responding to China
EU Trade Minister Valdis Dombrovskis is headed to China, reportedly with the message to sign onto some form of trade agreement giving Europe assurances of a more balanced relationship, or risk things getting worse. It doesn’t help when Beijing’s rhetoric is over-wrought. The EU has...
Africa Rising; Farm Bill Split; Bulgaria as Exporter
Africa Rising Notably, the Africa Group at the WTO has asked for policy space to develop its industrial sector. Historically, the focus has been on agriculture. This redirection conforms with the development that has occurred elsewhere, with the industrial sector rising and reducing the need to...
Glyphosate Wars; Biodiesel Boondoggle; Ethanol Future Play
Glyphosate Wars Objections to more toxic herbicides with drift issues has been more understandable than the attack on relatively benign glyphosate. But glyphosate became the poster child for the anti-chemistry green activists largely because of its low adverse impacts combined with effectivenes...
Targeting Big Ag; Milking the Cow
Targeting Big Ag Today signaled the end to a 60-day public comment period on the Biden Administration’s proposed regulatory guidance on antitrust issues. No doubt there were many negative comments, but its impact could still be huge on American agribusiness. In a simplistic “big is...
IPEF to Nowhere; Scale and Regulation
IPEF to Nowhere The Biden Administration continues to push its Indo-Pacific Economic Framework (IPEF) but at least two developments raise questions as to its utility. The first is Chief Agriculture Negotiator Doug McKalip announcing that agreement on an agriculture chapter is “really clos...
Chinese Energy Imports: Crude Oil at Record Levels
There has been much attention to, and discussion of, China’s declining two-way trade volumes. China is a trade dependent economy, with imports of many commodities and goods fueling its manufacturing and processing sectors and exports bringing in hard currency. China’s trade flows, h...
Skewing Farm Output; Pausing Farm to Fork
Skewing Farm Output The activist group Farm Action is usually slaying mythical creatures like Big Ag or the $750 million checkoff programs used by farm organizations to promote research and marketing. Their typical paean is the small farmer, but their latest focus is farm program structure and...
CBAMing Meat; Ukraine Grain on the Brink
CBAMing Meat The EU is scheduled to soon publish a revised animal welfare directive that could impact suppliers in other countries. Much the way Brussels fussing over phone charging cords forced a USB-C standard globally, the impending animal welfare standards may have less to do with science t...
Mexico’s Transition; Just Because
Mexico’s Transition The U.S. effort at near-shoring has demand for Mexican warehouses and industrial parks surging. However, one deficit may be energy as the government’s control of the energy sector causes deficiencies in output. In fact, a Bloomberg analysis reveals an underlying...
India’s Curious G20 Outcome; Turkey’s Motives; U.S. Hopes in Mexico
India’s Curious G20 Outcome The GATT was derided for being the General Agreement to Talk and Talk and former U.S. ambassador to India Ken Galbraith said that, “Meetings are indispensable when you don’t want to do anything.” The G20 hosted by India accomplished something,...
Diminishing Chances of a September Interest Rate Hike
The Federal Open Market Committee (FOMC) will meet this month to discuss the next step in monetary policy. As it stands now, the Federal Fund Futures market is pricing in only a 7 percent chance of an increase in the federal funds rate above its current 5.25 to 5.50 percent target rate. This is...
Industrial Planning Issues; Playing the Oil Market
Industrial Planning Issues The U.S. and EU are reportedly working on a plan to jointly impose tariffs on excess steel production from China. Hopefully it goes better than the sanctions placed on Russia. Container traffic through St. Petersburg and other Russian ports is said to be “surgin...
India’s Day in the Sun; Rapporteur Inflation
India’s Day in the Sun The G20 meeting occurs this coming weekend in the New Delhi convention center and India is making the most of its central role in the event. Although Russian President Vladmir Putin and Chinese President Xi Jinping will be skipping the event, they may not be missing...
Worker-Centric Comments; North American Colossus
Worker-Centric Comments The Biden Administration complains that U.S. trade policy has historically focused on increasing transactions and lowering consumer costs. Instead, it wants to use trade policy to boost the outcome for workers and to “advance racial and gender equity and support fo...
Net Export Capacity
To feed the world, countries need to have more arable land than is needed to feed the domestic population and have a higher yield or crop output per unit of land. Even that may not be enough. Australia has both the land and the output but suffers from inconsistent moisture. Kazakhstan is in a s...
Trade Policy Pivot Rationalized
U.S. Trade Representative Katherine Tai is pushing back at critics of the Biden Administration’s withdrawal from decades of trade liberalization. She continued the populist rhetoric that the Administration’s position is a defense of workers, that the U.S. position reflects a global...
Return of the Recession Worriers
lt seemed good as inflation dropped from 9.1 percent in June 2022 to 3 percent in July 2023. Some politicians credited the Inflation Reduction Act, at least in name. Those that had earlier said a recession was inevitable if inflation is to be tamed were eating crow. Last week, Federal Reserve C...
Farmer Sympathies with Albania
Euractiv reports that 30 percent of the agricultural exporters in Albania have gone bankrupt. The cause? The rapid appreciation of the national currency, the lev versus the euro zone where much of the production is sold. U.S. agricultural exporters understand the pain. The U.S. dollar appreciat...
Bent, Not Broken
The recent BRICS+ meeting in South Africa highlighted some of the animosity toward a world order long dominated by countries comprising just a minority of the world’s population. However, the Western model is difficult to undo for many reasons. From the standpoint of its architects, it pr...
Following the Stars under Cloudy Skies
Federal Reserve Chairman Jerome Powell delivered his address to the Federal Reserve’s annual policy conference in Jackson Hole, Wyoming on Friday. Last year, Powell was short, direct, cautionary, and hawkish. The equities market tumbled afterwards. This year he was a little mo...
Food Inflation Forecast: Highs and Lows
USDA released its August food CPI forecast today; the expectation for the rest of the year is range bound with a mid-point of 5.9 percent. The most interesting part of the forecast was the wide range of projections for 2024 – from a drop of 2 percent in the low case scenario to an additio...
His Excellency Hyperbole; Expanding USMCA
His Excellency Hyperbole In group dynamics, all manner of threats are used to try and compel action. These include setting deadlines, threatening adverse consequences, or promising rewards. At this week’s G20 meeting hosted by India, most of the effort was getting past conflict over Russi...
More BRICS, Same Problems
The BRICS Group, a club of nations with the goal of tilting the international order away from the West, has invited six countries to join and make it an unhappy family of eleven. We previously noted the shortcomings of the original BRICS and the new cousins have similar genetic defects: A...
BRICS Differ; EU Agriculture Policy Update
BRICS Differ In the adjacent article on BRICS Dominate, it is noted how the five key countries (Brazil, Russia, India, China, South Africa) meeting this week in South Africa stand out in terms of global agriculture. However, they are also different from a policy standpoint. Researchers at the U...
Rejecting Progress; Trump Out-Protections; EATS Failure
Rejecting Progress Two decades ago, the WTO held its Fifth Ministerial in Cancún, Mexico. At the time, Mexico’s campesinos or peasant farmers protested that free trade was ruinous to their lifestyle. They took reporters on tours of peasant farmers, showing off how the farmer worked...
China Flips on Food
Washington goes paranoid over import dependence on microchips and EV’s, but not food despite a recent trade deficit in grub. Nations that have experienced starvation in the past, such as those in Europe and China tend to focus on food self-sufficiency. Until recently, the mantra from Beij...
Follow the Rhetoric; Calculating Industrial Policy; Freeing the Golden Goose
Follow the Rhetoric The term “global warming” evolved to “climate change” and then to “climate crisis.” Each new framing is intended to better provoke action. The latest iteration makes maximal use of scientific flexibility and comes from United Nations Secre...
Friends on IPEF; Dropping Like BRICS; Dispute Acquiescence
Friends on IPEF The Washington Post is generally a friendly newspaper when it comes to the Biden Administration but even it could not countenance the White House failure in the Asia Pacific region. The paper’s editorial writers commented on the Administration’s proposed Indo-Pacific...
Refusing to be Boxed; Nobody’s Right - Everybody’s Wrong; No Surprise on GMO Corn
Refusing to be Boxed President Biden has likely done as much or more on the environment than any other White House occupant but that does not satisfy the zealots in the green lobby. He has refused to orchestrate the fossil fuel shortage demanded by some, and now he has spared the meat industry...
Trade Deficit Focus; Measuring Up China
No More Mr. Nice Guy; Food System Lies
No Mr. Nice Guy President Biden has kept many of his predecessor’s market access barriers but some of his supporters said that at least it is “polite protectionism” as a hyper-empathetic politician at least performed Trumpism with a human face. However, Joe Biden is now soundi...
Forex Commodity Business
Exchange rates and the commodity trade are inextricably mixed. Multiple recent developments are forcing board room recalculations as to where forex is going, and how best to position amidst the chaos. Just yesterday a populist Argentine Congressman named Javier Milei took the largest share (30...
Land Values and Cash Rents
USDA’s annual crop land values and farm rents survey was released last week; crop land values in 2023 average $5,460 per acre. Farm real estate value was $4,080 per acre - farm real estate includes all buildings (including homes) and other assets (bins, etc.) on a farm. Crop land was up 8...
Trade Without Industry; Content Moderation; Shipless Black Sea
Trade Without Industry If the Biden Administration were doing industry’s bidding, it would be negotiating trade agreements with real increases in market access. However, the lack of market access talks did not prevent Rep. Pramila Jayapal (D-Washington) from repeating the usual complaint...
Big Picture Trade Snapshot
U.S agricultural exports through May (the June data will be released on Thursday) show that among the 213 categories tracked for agriculture, exports are down year-to-date from last year by 8.5 percent in value, while imports are down 0.3 percent. Overall, that is a 4.4 percent drop in two-way...
Ag Tech Adoption; Awkward Trade Policy; Awkward Silence on Monopoly
Ag Tech Adoption The confluence of complex demands on the global farming sector including food security, competitiveness, climate change and sustainability make the adoption of agricultural technology even more important. In a service to policymakers, McKinsey & Company surveyed 5500 farmer...
Pigs Better than People; Durability and Opposition; State Directed Morals
Pigs Better than People House Agriculture Committee Chairman Glenn “GT” Thompson (R-Pennsylvania) says he will take the proverbial bull by the horns in the Prop 12 versus EATS animal welfare debate. The Supreme Court allowed California’s Prop 12 to prevail because there...
Mexican Desperation; Africa Group Wants Cuts; Climate Thoughts; Ag Sector Split?; Deceptive or Deluded; Laughable Agenda
Mexican Desperation Populist Mexican Deputy Agriculture Secretary Victor Suarez is facing a losing case in a USMCA dispute settlement case over GM corn as evidenced by his latest desperation move. Claiming the U.S. has no evidence to support the safety of GM corn, he demanded a joint scientific...
All That Glitters Is Not Gold; All Hope is Lost; If You See Something, Say Something
All that Glitters Is Not Gold Chief U.S. Agriculture Negotiator Doug McKalip spoke at the Minnesota Farmfest this week and said “a lot of effort” will be put into opening India’s market for U.S. agricultural products. Good, because it will take a lot of effort, and more. He an...
India's Prolific Agriculture
India is the world’s ninth largest agricultural exporter. The Biden Administration wants to negotiate with India on agricultural trade access, but New Delhi has a good thing going. Its agricultural trade surplus with the world has been growing, and more than a third of the reason is trade...
Farm Labor “Solutions”; Nebraska More Welcome Than China
Farm Labor “Solutions” The Biden Administration is labor-friendly, and all of the labor sector lobby groups are now working the farm bill reauthorization. Among the demands is too slow line speeds at food processors. It is no doubt relatively dangerous work though worker safety has...
Pope Joins Africans; Take PASS on EATS
Pope Joins Africans As noted last Thursday, Russian President Vladimir Putin’s effort to offer succor to African leaders in the form of grain to gain their support versus Ukraine failed miserably. He offered grain to them, some free, but the best he got in return was their call for a ceas...
Enough is Enough; Backfiring on Moscow; Political Addiction; Opposite Approaches
Enough is Enough Special interest lobbies cannot show satisfaction lest they lose their raison d’etre. However, French Agriculture Minister Marc Fesneau reached his own point of dissatisfaction. Euope’s green lobby got everything they wanted in the new Common Agricultural Policy. Fa...
Ukraine Exports and EU Policy; Targeting Brazil
Ukraine Exports and EU Policy Russia is not just attacking Ukraine’s ability to export grains but may be threatening EU member states on the eastern periphery. Drone strikes on the port of Reni occurred a few hundred yards across the Danube from NATO member Romania. The UK is warning that...
Black and White; Careful What You Ask
Black and White The European Food Safety Authority concluded after extensive research on the herbicide glyphosate that no “areas of critical concern” were found when it comes to potential harmful impacts of using the substance in plant protection. German Green Agriculture Minister C...
Policycrisis or Minicrisis; Food Insecurity Mirage I; Food Insecurity Mirage II
Polycisis or Minicrisis Adam Tooze is a fantastic historian and his characterization of a polycrisis whereby the globe suffers from a thousand interconnected cuts is compelling theater. If the end of the world genre is your cup of tea, there is also Peter Zeihan’s latest book, The End of...
Complications for a New Farm Bill
The House of Representatives may take up the FY2024 Agricultural Appropriations bill this week, and then again, it may not. First, in the House, legislation has to go through the Rules Committee where that panel sets the rules of debate, including which amendments are considered in order...
Black Sea Grain Initiative: One and Done?
The uncertainty that Russia’s invasion has brought to agricultural markets continues. Roughly 32.9 million MT of grain has been exported from Ukraine since the Black Sea Grain Initiative (BSGI) began in July 2022. Russia refused to extend it Monday, siting the continued sanctions wh...
Broken Record; Love Thy Brother; Genuine Intelligence
Broken Record For the eighth time, not the second or third, the U.S. has complained at the WTO that India violates national treatment when it comes to GM crops. New Delhi has approved the domestic commercial use of GM mustard and has long allowed the cultivation of GM cotton by Indian farmers...
Farm Bill Timeframe: Lots of Hurdles
At a farm bill event in Indiana featuring that state’s two U.S. Republican Senators, Mike Braun, who is a member of the Senate Ag Committee, and Todd Young, the Committee’s Ranking Republican member, Committee Ranking Member John Boozman (R-Arkansas) gave an update on the legislatio...
Third Way Sought
Economists are debating the current geopolitical hand that has been dealt, and how best to play it. President Biden has made a major shift toward government directed self-sufficiency in critical minerals, automation, and decarbonation where validity gets hotly debate. At the same time, he has e...
Inflation, Spending, and the U.S. Economic Outlook
Last week, WPI’s Dave Juday noted that while the all-items CPI inflation measure has fallen significantly from its June 2022 peak, other metrics show far more persistent inflation. The “core CPI” (which ignores energy and food inflation) that the Fed considers when making inte...
Apples: Picking with a Robot?
ERS’s study on cost savings in U.S. apple production is a good look at an industry adjusting to scarcity in labor markets. Washington State is by far the top producer, and they have long depended on the H2-A visa program for workers—an estimated 50,000 annually--not only for h...
Inflation Cleveland Style; Inflation Higher than CPI Indicates
Yesterday the Bureau of Labor Statistics (BLS) released the June Consumer Price Index (CPI) showing a 0.2 percent growth in June, the smallest monthly increase since August 2021. There are a few ways to look at the numbers, however. On the one hand, the 3 percent annual inflation is a big drop...
Pity EU Farmers
The European Parliament approved a Nature Restoration Law that farmers say will cause the loss of farmland targeted for restoration as natural habitat. Meanwhile, the goal of reducing pesticide use by 50 percent and cutting fertilizer applications was supposed to be offset by deregulating new g...
Concentrated but Explainable; Moral Equivalence
Concentrated but Explainable In President Biden’s first six months as president he issued an Executive Order calling on federal agencies to investigate economic consolidation that is harming workers and consumers. A new USDA/ERS presentation on Concentration and Competition in U.S. Agribu...
Policy Compounding Compounding; Not Chinglish; Freedom and Food
Policy Compounding Compounding Feed compounders typically use computer software to find the optimal mix of ingredients (up to 900 different options) based on nutrition and price to maximize utility and value. In Europe, the complexity of the chore is compounded by policies on GMO’s. As ex...
Know Thy Brother; Remembering Abe
Know Thy Brother Europe and Latin America had one of the weirder policy exchanges of the week. Heads of state from the Latin American and Caribbean States (CELAC) travel to Europe 17-18 July and are debating a communique with the EU ahead of the visit. Europe has targeted Latin American countri...
IPEF Criticism; EU Pesticide Reports
IPEF Criticism Participants in the Biden Administration’s Indo-Pacific Framework for Prosperity meet again this Sunday to try and move forward on various provisions. However, the whole effort is facing criticism from all sides. The U.S. business community and some Indo-Pacific countries s...
Waiting for Trade Policy Changes; Transatlantic Speech
Waiting for Trade Policy Changes Seasoned Washington trade policy expert Bill Reinsch characterized the Biden Administration’s trade policy as akin to Grigory Potemkin’s fake villages erected for Catherine the Great. Basically hollow. Uruguayan Ambassador Andrés Durán...
Transatlantic Policy Revolutions; Grain Corridor Deal
Transatlantic Policy Revolutions USTR Katherine Tai evangelizes the Biden Administration’s worker-centric trade policy by emphasizing that change is hard. What makes it more difficult is that its emphasis on workers (read higher paid union workers) over consumers (e.g. everyone else) is c...
Book Review: Ultra-Processed People
What a catchy title by virologist Chris van Tulleken! In his book he asks, “Why Do We All Eat Stuff That Isn’t Food … and Why Can’t We Stop?” Wow, not food being marketed as food should have a legal problem. This book has its high-C personality type advocate...
Positive Economic Data - Silver Lining Surrounded by Clouds
There have been a number of economic reports recently that on the face of them seem very positive, but in some cases, they are the sliver linings still surrounded by clouds. The final revised estimate of GDP for Q1 2023 came in at 2 percent, which is up from the prior estimate of 1...
UN Food Summit; Hill Grilling; Food Insults
UN Food Summit When the first biannual UN Food Summit occurred back in 2021, it was a hotly competed policy platform between agribusiness and the social activist community. The latter sees the current system as deeply flawed and sought to dismantle the corporate/scale/trade side of the sector...
Retaliation against Mexico; Social Engineering Masquerading as Trade Policy
Retaliation Against Mexico The Mexican government is imposing a 50 percent tariff on white corn imports to protect its growers from competition. This is a much more surgical approach than its proposed ban on all GM corn imports. Only 4.5 percent of U.S. corn exports to Mexico is white corn but...
Brazil Grain Storage Increases
Much like the U.S. historically, Brazil’s capacity to store its grain (wheat, coarse grains, rice, soybeans) output has been increasing with its production gains. According to the Brazilian Institute of Geography and Statistics, the number of silos being built is growing faster than bulk...
Day Late and a Dollar Short; Harder than it Appears; Spinning the Truth
Day Late and a Dollar Short House Ways & Means Trade Subcommittee Ranking Democrat Earl Blumenauer (Oregon) has introduced legislation reauthorizing the long expired Generalized System of Preferences (GSP), Trade Adjustment Assistance (TAA) and Miscellaneous Tariff Bill (MTB). The reauthori...
Geopolitics Trumps Trade; Sinking into Oblivion
Geopolitics Trumps Trade President Joe Biden hosted Indian Prime Minister Narendra Modi today despite the latter’s dubious record on democracy and religious freedom. Biden is seeking Modi’s support in the competition with China and wants less Indian cooperation with Russia. By contr...
Sinking Ships
Russia says it expects the Black Sea grain corridor agreement to end on 18 July, though it is willing to keep talking. The Russian deputy foreign minister said that even if the agreement with the UN for Ukrainian grain shipments end, Moscow expects its agreement for exporting Russian grain to c...
Obrador Doubles Down; NGT’s Moving Forward; Tyranny of the Small Minded
Obrador Doubles Down President Andres Manuel Lopez Obrador is compelling Mexican tortilla makers to only use non-GMO white corn. He said he will impose tariffs on imported white corn to ensure that corn is only sourced from domestic producers. The move implies concern that Mexico will lose a tr...
Failed Prop 12 Strategy; Shallow View of Trade; My AI Can Beat Your AI
Failed Prop 12 Strategy Some members of the U.S. Congress urged on by governors in 11 states are proposing legislation that would prevent state and local jurisdictions from regulating food practices impacting other jurisdictions. The goal is to reverse the Supreme Court’s ruling in favor...
China Balancing Act; USMCA Loophole
China Balancing Act A diplomatic spat between Seoul and Beijing has relations between these two East Asian neighbors quickly souring. Meanwhile, Chinese President Xi Jinping is turning up the heat on Japanese Prime Minister Fumio Kushida by mentioning the Japanese island of Okinawa and its supp...
TPP Re-enactment Society; Exporting Emissions; Pott versus Kettle
TPP Re-enactment Society USTR says the next and fourth round of negotiations on the Indo-Pacific Economic Framework (IPEF) will be held in Busan, South Korea during 9-15 July. Responding to critics of the Biden Administration’s relatively modest trade negotiating goals focused less on inc...
Factors of Inflation
The monthly CPI for May was up 4 percent over 12 months; that is down from the April to April annual increase of 4.9 percent and slightly below the pre-report expectations of 4.1 percent. The May increase of 0.1 percent was the smallest 12 month increase since April 2021. A drop in...
Policy Shorts for Mid-June
USTR: Two years ago, it would have been deemed implausible but USTR Katherine Tai is now being criticized by Congressional Democrats for a lack of consultation and transparency. Congress on Trade: Bipartisan legislation has been introduced by members of the House and Senate committees ove...
Trade Policy Knocking
Except for an overstated IPEF, President Biden has put trade policy up on a shelf but there is knocking from all directions to put its policymaking back on a working desk. The most blistering attack comes from Robert Zoellick, a former White House, State, Treasury, USTR and World Bank intellect...
Greenest Exporters; Slow to Go Green
Greenest Exporters Transatlantic duties on steel and aluminum were suspended in 2001 after the U.S. and EU agreed to pursue a Global Arrangement on Sustainable Steel and Aluminum. The arrangement would “use trade policy to confront the threats of climate change and global market distortio...
Brazil Helps Brussels; Transatlantic Double Vision
Brazil Helps Brussels EU foreign policy has designated Latin America as the region of the world deserving closer relations. Most of the countries in the region were settled by Europeans and there is a perceived sharing in values. However, an EU free trade agreement with Mercosur (Argentina, Bra...
Forever Poor
Dhaka’s The Daily Star reports that Bangladesh seeks to avoid the increased trade disciplines that comes with the country’s elevation above least developed status. Except for the covid lockdown period, Bangladesh’s economy has been growing at 7 percent or better each year. Off...
Diverging Data on Jobs
As WPI has reported many times over the past two years, conventional economic data is difficult to decipher because the impact of COVID and its aftermath were anything but conventional. It was concurrently an increase in consumer spending power and demand, while a slow-down, to shut down in eco...
Challenging Mexico GMO Policy; Inequitable Ethanol Policy; Ties to Taiwan
Challenging Mexico GMO Policy The U.S. formally requested USMCA dispute settlement consultations with Mexico over its proposed ban on GMO corn. The move comes months after initiating informal discussions that have gone nowhere. Former Mexican agricultural trade negotiator Kenneth Smith Ramos ha...
SNAP and Meat and Poultry Retail Demand
USDA released its updated food expenditure series this morning. Going into the farm bill and SNAP debate – and in light of the debt ceiling deal which makes some reforms to SNAP – the trend line of government spending on consumer food purchases is noteworthy for its steep incre...
Deforestation Proxy; Perpetual Crisis; Perpetual Costs
Deforestation Proxy It was revealed this week that Brazil is exporting 120 KMT of soybeans to the U.S. and the State Department immediately announced that the Biden Administration will use trade policy to reverse deforestation, including imposing import restrictions on goods where production im...
Siloing of U.S. Agriculture; TTC Happy Talk; I{EF Spotlight
Siloing of U.S. Agriculture California state legislators saw the Supreme Court’s green light on Prop 12’s Sacramento driven animal welfare standards and ramped it up this week. They declared a ban on the use of some specific chemical additives in food products (coloring dye Re...
IPEF Blah, TTC Heat; African Woes
IPEF Blah, TTC Heat USTR Katherine Tai achieved agreement over the weekend on language focused on supply chains in the Indo-Pacific Economic Framework for Prosperity. However, it is all a bit boring. Basically, countries agreed to a process to talk and “work together” on issues. Mea...
Memorial Day Holiday
U.S. financial markets are closed on Monday, 29 May and consequently there will be no Ag Perspectives report on that day. WPI's analysis reports will resume on 30 May. We wish everyone a delightful three-day weekend...
Meat Loaf Wisdom; Enemy of My Enemy
Meat Loaf Wisdom U.S. Trade Ambassador Katherine Tai concluded a U.S. led meeting of APEC trade ministers in Detroit today without an agreed joint statement. Russia and China blocked a draft statement that included a condemnation of Russia’s war on Ukraine. She said she hopes a joint stat...
Wetting Down Party; DeGrowth for All
Wetting Down Party Farmers, real estate developers, and industry are celebrating a Supreme Court ruling that limits the government’s regulation of certain wetlands. The conservative majority ruled that the navigable waters of the U.S. means a continuous surface water connection – th...
Europe’s Bad Boy; Africa’s Bad Country
Europe’s Bad Boy Hungarian Prime Minister Viktor Orban is not well liked in Brussels, nor in Kyiv. Not only does he rankle Western Europe’s democratic virtues, but he also appears to side with Vladimir Putin. Yesterday he said that Ukraine has no chance of winning the war against Ru...
USMCA Action and Future; Geopolitics Drives Trade Policy
USMCA Action and Future Washington invoked the USMCA’s rapid-response mechanism against Mexican worker rights violations for an eighth time. The Biden Administration is following U.S. organized labor’s requests as they see their manufacturing jobs shifting to Mexico’s lower wa...
Follow the Money
UN Secretary General Antonio Guterres attended the weekend’s G-7 summit in Hiroshima. At the meeting, he suggested the UN Security Council and the Bretton Woods global financial institutions need to be updated. He correctly noted that their design was based on the dominant countries right...
Transatlantic Biofuel Split; Small Potatoes
Transatlantic Biofuel Split Brussels is ready to finalize its Renewable Energy Directive III (RED) with just one small glitch remaining. France and some other countries want hydrogen made from nuclear energy to be eligible as a low-carbon fuel. It is for certain low-carbon except for the nuclea...
Toward a New U.S. Trade Policy
For many years U.S. agriculture was able to compete as a low-cost, bulk commodity supplier. Its farms were large and consolidated, enabling economies of scale. Education and a skilled extension service meant farmers could concurrently be agronomists, engineers, and marketers. Financing was soph...
Debt Limit Spread; Agricultural Royalty
Debt Limit Spread President Biden says he will return early from his trip to the G-7 meeting in Japan due to the lack of agreement on raising the U.S. debt limit. House Speaker Kevin McCarthy says returning to the work requirements for social welfare benefits that existed pre-pandemic is a hard...
Zero Sum Technology; Big is Better
Zero Sum Technology The center-right European People’s Party is undermining codification of the Green Deal’s goal of halving pesticide usage. One EU official is quoted saying that if pesticides are not banned then there should be no adoption of new genomic techniques. Why should the...
Friday Mix Up
Doth Protest Too Much: China criticized Japan for its decision to host a NATO liaison office in Tokyo. It accused Japan of dismantling trust and stability in the region. U.S. troops are already stationed in Japan and NATO is no threat to China unless it is planning its own disruptions in the re...
Agriculture Exception; Sino Games
Agriculture Exception U.S. House Republicans are set to pass legislation today clamping down on border crossings but it required a last minute concession to the agriculture sector. The bill requires employers to use a government electronic verification system (E-Verify) before hiring to ensure...
Backdoor Farm Bill; Backdoor Grain Shipment
Backdoor Farm Bill President Biden has invited the top Democrat and Republican from both the House and Senate Agriculture Committees to meet tomorrow and discuss reauthorization of the $1 trillion-plus farm bill. It is rare for a president to get so directly involved in a generally less controv...
Defensive on Trade Policy
The Biden Administration is trying to shore up support for its trade policy ahead of next year’s election, but some are not buying it. National Security Advisor Jake Sullivan gave a long rambling speech on the topic last week but former USTR economist and now Progressive Policy Institute...
Anti-Big is Anti-Competitive; Biden Supply Chain Impacts
Anti-Big is Anti-Competitive White House economic advisor Lael Brainard bragged at last week’s anti-monopoly summit meeting that the Biden Administration’s “Meat Action Plan” subsidizing small meat-packing operations is providing more and better options to farmers and ra...
Building Hunger; Building Food
Building Hunger The Global Network Against Food Crises says global hunger rose for a fourth straight year, jumping by a third to about a quarter of a billion in 2022. Granted, the causes were the usual – conflict, economic crises, and trade disruptions. Plus, the UN says global food price...
Directing the Money; Nativistic View
Directing the Money U.S. Senate Agriculture Committee members are having a dispute over money already allocated. Democrats passed the Inflation Reduction Act (IRA) last year without support from any Republicans. They directed $18.4 billion be spent increasing agriculture’s climate resilie...
Dollar Direction
China, Russia, and Brazil are not the only entities betting against the U.S. dollar. The Invesco DB US Dollar Index Bullish Fund peaked last October at 30.36 and has fallen 8.6 percent since then. The opposite bet, the Invesco DB US Dollar Index Bearish Fund is up 11 percent over that same peri...
Playing Down Tariffs; Solidarity Lines; Mixed Africa Report
Playing Down Tariffs President Biden’s National Security Advisor Jake Sullivan last week conceded that “there is still work to be done bringing tariff levels down in many other countries” but insisted that there are other fundamental trade priorities than simply bringing down...
Another Ethanol Victory; Mexican Fanático
Another Ethanol Victory The ethanol industry scored two wins this week. House Republicans trying to eliminate the ethanol industry’s tax breaks as part of a debt ceiling bill conceded to their Midwest colleagues by keeping the incentive intact. Then on Friday, the Biden Democrat-run U.S...
Conflicting UN Advice; Recession/Republican Nominee
Conflicting UN Advice UN Climate Action Office: Animal-based foods, especially red meat, dairy, and farmed shrimp, are generally associated with the highest greenhouse gas emissions. Where appropriate, shifting food systems towards plant-rich diets – with more plant protein (such as beans...
Karotousen in Miyazaki
G-7 farm ministers meeting in Miyazaki, Japan agreed on a communique with all of the usual window dressing. They worry about food security, the impact of the war in Ukraine, and they want to help developing countries. They even came up with a separate list of “Miyazaki Actions” that...
Mississippi River: From Drought to Flood
According to the National Weather Service (NWS), the water level on the upper Mississippi River is expected to reach its highest since 2001. The NWS weather forecast station at La Crosse, Wisconsin, reports that “the chance for a top five flood on record is high at all sites.” Snow...
Policy Shorts
Russian Grain Union leader Arkady Zlochevsky says Russia could export a record 60 MMT of grain this season. At the same time, he says the Black Sea grain corridor deal has not yielded anything positive for Russia. So Russia is exporting record amounts and doesn’t appear to need any specia...
Yellen Yelling Doublespeak; Wasted Breath
Yellen Yelling Doublespeak In his dystopian novel “1984,” George Orwell wrote about the way officials would use euphemistic or ambiguous language to disguise actual intent. The Biden Administration has perfected this approach. At the same time the U.S. is encouraging companies to mo...
Russian Politics of the Grain Corridor
Inspections of Ukrainian grain moving through the Black Sea corridor have been off and on this week as Russia briefly stopped processing them. In less than a month, Russia must decide whether to allow the UN-brokered deal to continue. Moscow is insisting reauthorization is conditioned on the We...
New Trade Agenda; Let Them Eat Pasta; U.S. Debt Limit
New Trade Agenda Members of Congress are upset that President Biden has followed his predecessor’s approach of largely bypassing the legislature when it comes to trade. To reassert their jurisdictional primacy on the topic, there is rare bilateral agreement to work on trade legislation th...
Hungry and Cold; Playing with Forests; Disappointing Free Access
Hungry and Cold Europe’s environmentalists want to go cold turkey when it comes to energy. Greenpeace is suing the EU for what it calls greenwashing as proposed rules would allow the continued use of natural gas and nuclear energy under certain circumstances. Policy officials are pragmati...
North Korea Food Policy
North Korea has managed to produce the largest undernourished population of any country, 41.6 percent. Like supporters of Cuba, some blame U.S. sanctions policy, although food is excluded from any restrictions. Joseph Yi at Hanyang University in Seoul calls for resuming aid and supplying aid wo...
Big Week for SNAP and the Farm Bill
The Senate Agriculture Committee will hold a hearing on the Supplemental Nutrition Assistance Program (SNAP) on Wednesday, 19 April. As WPI has mentioned many times previously, SNAP is one of the most contentious issues in the farm bill and thus the largest potential stumbling block to it...
Placating Eastern Europe; Nationalism Not Ideology
Placating Eastern Europe Slovakia joined Poland and Hungary in blocking grain imports from Ukraine, and Bulgaria is contemplating it. Brussels initially threatened the miscreants for breaching the EU’s trade policies. However, the expanding boycott caused a further examination and instead...
Threat from Within; El Niño’s Arrival; Biggest Worry
Threat from Within Dissing both the dollar and U.S. foreign policy was very popular this week. It started of course with French President Emmanuel Macron doing so in China on behalf of Xi Jinping, and then ended with Brazil’s Lula da Silva channeling his inner Macron with a similar messag...
Transatlantic Duality; No Ag for Kenya; Black Sea Hurdles
Transatlantic Duality EU Trade Commissioner Valdis Dombrovskis is in Washington this week and had some notable messages. For one, he said that the EU’s carbon border adjustment mechanism, which restricts trade, is WTO legal, while subsidies that only indirectly affect trade are not. Then...
Shadowy Trade Policy; Spinning Economics
Shadowy Trade Policy White House press spokesman John Kirby prefaced President Biden’s trip to Northern Ireland this week by saying, “He’s going to talk about trade and economic prosperity in Northern Ireland and all the opportunities that opens up between ... the United State...
Farm Bill and Water; Another Threat to IRA; Tortilla Torture
Farm Bill and Water For the first time in history, the federal government may intercede and impose restrictions on the water withdrawal by states in the Colorado River basin. The draft plan would reduce allocations to Arizona, California, and Nevada, likely spreading the pain evenly. The move c...
Danger of Corn Dispute Delay; Dissecting Food Inflation; Farmers Pushed to Edge
Danger of Corn Dispute Delay At the late March hearing before the Finance Committee, Senator Chuck Grassley (R-Iowa) pressed USTR Katherine Tai not to delay taking formal action against Mexico for its proposed ban on GMO corn imports. She made no specific commitment and now the earliest date fo...
Rhetoric and Economics; CAFO Monster
Rhetoric and Economics USTR Katherine Tai made another valiant attempt this week to defend the Biden Administration’s trade policy. Her reassurances sound good because they are a bit Pollyannish. She repeated most of the current Administration thinking on trade policy – that the tra...
TTC Distractions; Public Research; Dark Shopping Goes Dark
TTC Distractions The U.S. and EU confirmed that the next meeting of the Trade and Technology Council will be next month in Sweden. The agenda supposedly includes Ukraine, economic security and resilient supply chains, and other issues. The “other” may come to dominate the session. T...
Famers Concerns on Interest Rates
Purdue University released its Ag Economy Barometer today; the barometer is a joint project with the CME Group and is based on a monthly survey of 400 producers. The March Barometer dropped 8 points to an index level of 117. It was 113 for March 2022, which was the lowest since May 2020 at 103...
Oil versus Grain; Canadian Disappointment
Oil versus Grain In the conflict with Russia, the G7+ has employed a cap on the price of petroleum. The goal is to reduce Russia’s export earnings and thus undermine its war effort. By contrast, the goal has been to help Ukraine, both with munitions and the EU waiving duties on that natio...
Food Assistance Inconsistencies; China versus West in Africa; Biden Protectionism
Food Assistance Inconsistencies Domestic food assistance programs and their funding levels are a key topic for the 2024 farm bill. Angela Rachidi at the American Enterprise Institute points out that the Biden Administration has proposed better aligning the school lunch program’s food offe...
Lucy Pleases No One; DSP Reform; Planting and El Nino
Lucy Please No One In the cartoon Charlie Brown, Lucy would always remove the football just before Charlie Brown tried to kick it. In the case of EV vehicles, President Biden is Lucy as trading partners expected him to open up EV tax credits to them, but Treasury’s regulatory notice today...
AI and Agriculture; Worker Centric Trade Policy is Dead
AI and Agriculture AI is the rage with some warning it will lead to human extinction, and others comparing its transformative impacts to the internet and smart phones. Those technologies have had their share of ethical concerns but the genie is now out of the bottle and short of government regu...
Friend-shoring Challenge
Friend-shoring or moving supply chains closer to being between like-minded nations doesn’t seem like an agriculture issue but it could become one. That is because the sector is increasingly being treated like a strategic asset, and it faces differentiated production standards as regulatio...
Unhelpful Timing; Tai Strengths and Weaknesses; IPEF’s Weakness
Unhelpful Timing The U.S. agriculture sector unleashed a pro-trade barrage on the Biden Administration this week and USDA bureaucrats wittingly or unwittingly contributed to the onslaught. U.S. agriculture is highly dependent on trade. It was first battered by Donald Trump’s trade war and...
Farm Bill Foci
While the human diet is a complex affair and animal protein, unlike many other commodities, lacks a title in the Farm Bill, it is the most egregious food to some activist groups. They specifically cite the contribution of livestock to climate change. These groups have some work cut out for them...
Ready to Discuss; Iowa Competitive
Ready to Discuss After previously calling it unsustainable, the Biden Administration has reportedly notified WTO members that it is “ready to discuss” a 10-point proposal for reforming Special and Differential Treatment (S&DT) that has been drafted by developing countries. While...
Uncomfortable Hearing; Real Politik is Complicated
Uncomfortable Hearing Today, USTR Katherine Tai faced the music on the Biden Administration’s trade policy and heard bipartisan disappointment. The hearing before the Senate Finance Committee was generally more cordial than the tone at times, but it couldn’t have been comforta...
Kabuki Theater; Miscalculating Farmers; Greed is a Bogeyman
Kabuki Theater Agriculture groups sent a letter to Congress this week asserting that the sector is falling behind competitors due to the lack of new free trade agreements. They want Trade Promotion Authority (TPA) renewed so that the President can negotiate “free trade agreements” (...
Miscellaneous Things Being Read
Transatlantic Relations The White House has language on a minerals deal will the EU that will likely be a topic at Thursday’s Senate Finance Committee hearing featuring USTR Katherine Tai. Not all senators are keen on the transaction. Some agriculture state senators prefer a trade negotia...
Limiting the Options; Legislators Know Best
Limiting the Options Some policymakers in Brussels have held the view that tight limits on the use of pesticides and fertilizer can succeed if new breeding techniques (NBT’s) are used to genetically make plants hardier and self-sustaining. However, now it is reported that the German Agric...
Testy on U.S. Trade Policy; Trade and GDP; Prospective Plantings
Testy on U.S. Trade Policy USDA Secretary Tom Vilsack testified this week before the Senate Agriculture Committee and while most of the hearing was tame, the one contentious issue was trade. The Panel’s Republicans echoed the demands of their farming constituents by telling the Biden Admi...
Biden to Get Waterboarding; MRL’s Too Flexible
Biden to Get Waterboarding Regulating water quality under the U.S. Clean Water Act has become a political football, changing policies with each change of party in the White House. However, it looks likely that President Biden’s crack at regulating the Waters of the U.S. (WOTUS) is headed...
Pet Food Bonanza
U.S. dog and cat food exports have risen 3500 percent over the past five years, one of the fastest growing categories of trade. It is on a path to rise over 200 percent in 2023. There are a few different reasons for this explosive growth. The first is that the U.S. has the highest per capita ra...
ICE and N-P-K
Second thoughts in policymaking are usually better than no thought at all. If it is meant to be, it will. Almost two years ago European politicians agreed to end the selling of automobiles with internal combustion engines (ICE), and to slash the use of fertilizer (N-P-K) and pesticides in crop...
Industrial Farm Policy
China has announced that its state policies to support food production will be increased. Nearly every country has an industrial farm policy. The OECD estimates that of the 54 countries monitored, $817 billion is spent annually in support of agriculture. But some are more effective than others...
Our Complaints Too; Success of Options; IPEF Wisdom; Into the Fire
Our Complaints Too EU Commission President Ursula von der Leyen was at the White House today to initiate a bilateral agreement with President Biden on joint sourcing and production rules for critical minerals. The agreement is an attempt to placate Europe’s frustration with American subsi...
Please Don’t Make Me Graduate; Jones Act Burden; Record Presidency
Please Don’t Make Me Graduate Growing up is hard to do and least developed countries (LDC’s) are resisting losing their special trade benefits when their economies grow out of the LDC status. Presenting a litany of excuses in Geneva, they want LDC benefits extended even when they gr...
High Stakes in Mexico Corn Case; Livestock Scale Questions; Digital Competition
High Stakes in Mexico Corn Case AMLO has said he is ready to go to a dispute settlement case to defend his ban on GMO corn from the U.S. He is arguing that it is necessary to protect the genetics of 59 indigenous corn varieties. U.S. government trade officials have been historically reluctant t...
Meat Needs Work, Know Cheese, Not Europe, Can’t Beat ‘em, Join ‘em
Meat Needs Work The U.S. meat industry is feeling good because demand for its product remains strong. Inflation and economic doubts have shoppers economizing on where they buy and the form it is in, but not the fundamental product. However, animal welfare activists are stepping up their game an...
Policy Shorts
Procedural Action on Mexico: The Biden Administration has formally requested technical consultations with Mexico under the USMCA to discuss the proposed GMO corn ban. The consultations are a technical requirement before a formal dispute settlement can be filed. Given Mexico City’s prior f...
Tai’d Down on Trade
The Biden Administration has done the impossible – it has united Congressional Democrats and Republicans on an issue, and not in a good way. It turns out that Congressional trade folks felt good when they came together back in 2020 and in a strong bipartisan fashion, voted overwhelm...
Tooling Up; Ignoring the Elephant; Buffaloes and Cows
Tooling Up Yesterday, USTR issued its annual report for 2022 and the President’s 2023 Trade Policy Agenda. The 354-page document will no doubt be read thoroughly by America’s trading partners. One thing they will notice is that USTR likes tools. In fact, the word tool is used 48 tim...
AMLO Channels Inner Trump; Trump Stumbles; Industrial Policy Warning
AMLO Channels Inner Trump Thousands of Mexicans protested in the streets against Andrés Manuel López Obrador’s decision to water down the power of the National Electoral Institute. U.S. Secretary of State Antony Blinken echoed the concern of the protestors, drawing criticism...
Limits on Trade Blocs; Short Supply Chain BS; Small Farm Solution BS
Limits on Trade Blocks De-friending, reshoring, carbon border measures and other narrow views of global trade may have their limits. The EU’s Sabine Weyand, head of the EU’s DT Trade unit told a Berlin conference on greening trade policy that Europe cannot limit its trading relation...
Streisand Salvation; WOTUS Cost; The Money Pit
Streisand Salvation Stealing an idea from energy writer Robert Bryce, what if the Green Deal/F2F is inadvertently boosting the prospects for ag chemical companies? Bryce notes the “Streisand Effect” whereby the world famous entertainer Barbara Streisand sued a photographer to stop p...
Diversity of Scale; Calories versus Micronutrients
Diversity of Scale Tom Vilsack is one of the longest serving secretaries in USDA history. The one-time presidential candidate is a likeable and formidable character. Yet at this week’s annual USDA Outlook conference he tried to talk farmers out of getting big, and instead to go into diver...
WTO and Inclusion; Putin Boosts Trade; Boohoo, Yoohoo
WTO and Inclusion There is much frustration in Geneva over the policy gridlock at the WTO. The EU has proposed a set of three objectives for the institution: trade policy and state intervention in support of industrial sectors (looking at you China and Biden’s IRA); trade and...
Future of World Trade; Inflated Politics
Future of World Trade While U.S. Trade Representative Katherine Tai characterized the WTO as being on ‘thin ice” for a dispute settlement case declaring US. claims of national security an invalid basis for trade barriers, WTO Deputy Director General Anabel Gonzalez said the organiza...
Equilibration of Food Prices
International trade is supposed to equilibrate prices as the supply of goods or services flow to where they deemed more precious. Hog prices in Europe are currently 57 percent higher than in the U.S., which some believe creates an opportunity for transatlantic pork sales. However, open markets...
War Escalation and Food Security; India Courted
War Escalation and Food Security President Joe Biden visited Kyiv yesterday where he accused Russia of trying to starve the world. The U.S. also expressed concern that China will begin supplying lethal aid to Russia. Chinese Foreign Minister Qin Gang warned that, “We urge certain countrie...
Warren is Wrong; You Can’t Have Any Pudding
Warren is Wrong U.S. Senator Elizabeth Warren (D-Massachusetts) excoriated her own Party’s USDA secretary, Tom Vilsack, for failing to stop concentration in agriculture. She and others of her ilk apparently prefer poverty of the many. She complains there are too few agribusinesses competi...
Split Opinions Farm Bill; Who Lacks Trade Policy?; Spoiling Russia’s Commodity War
Split Opinions Farm Bill There are two sides to any fight in Washington, and it is an inelegant blood sport. Neither side respects the observation of renaissance American writer Elbert Hubbard that, “If men could only know each other, they would neither idolize nor hate.” Anyone in...
Mexico Ignores Science Question; Bad Idea; False Impression
Mexico Ignores Science Question In response to U.S. Agricultural Trade Ambassador Doug McKalip’s throwing down the gauntlet and demanding by today the scientific basis for Mexico’s GMO corn ban, AMLO equivocated. His government announced that the deadline had been moved and that GMO...
Tee Up Warnings; Takes One to Know One; Nutrition and Meat
Tee Up Warnings Learning that some Progressives in Congress want to amend crop insurance and increase conservation requirements, Ranking Member on the Senate Agriculture Committee John Boozman (R-Arkansas) had a message for them at last week’s hearing on Commodity Programs, Crop Insurance...
Valentine Kiss; Farm Bill Implications; Trade as a Weapon
Valentines Kiss USTR Chief Agriculture Negotiator Doug McKalip gave his counterparts until 14 February to respond to the U.S. demand for answers to its questions about the science Mexico is using to justify bans on GMO corn and glyphosate. The U.S. sugar industry now realizes it could be advers...
Biden’s Error in Commodity Strategy; Chasing Sri Lanka
Biden’s Error in Commodity Strategy The U.S. is the world’s largest oil and gas producing nation. Russia is a close number two. But note the following: First, almost a fifth of the Russian economy is based on oil and gas, versus just 8 percent of the U.S. economy. Second, and...
War on Big Ag; Gene Editing Regulation
War on Big Ag At a conference hosted by anti-Big Ag activist group Farm Action, vegan and anti-Big Ag U.S. Senator Cory Booker (D-New Jersey) called for a moratorium on Combined Animal Feed Operations (CAFO’s). He called the large livestock feeding enterprises cruel to animals, environmen...
Biden SOTU versus EU Hopes; Child Labor Perversity
Biden SOTU versus EU Hopes President Joe Biden in his State of the Union address tonight will call for increased application of Buy America provisions in government contracting. Separately, German Economy Minister Robert Habeck thinks a free trade agreement with the U.S. limited to just critica...
India’s Rise; Critic versus Constructionist
India’s Rise The world’s largest democracy has refused to criticize or disengage from Russia’s autocratic regime. Prime Minister Narendra Modi is playing his country’s power card between Russia and the U.S. The Biden Administration will pour on a full-court press this ye...
What to Make of the January Jobs Report
Last Friday the Labor Department released a shocker of a jobs report: 517,000 new jobs created in January. The pre-report consensus was 188,000 jobs. Unemployment was 3.4 percent, the lowest in more than 50 years. The number was a surprise because it came after a barrage of headlines about mass...
Jurisdictional Competence; S&DT Short-Sightedness; Non-Starter
Jurisdictional Competence This week agriculture ministers from 16 EU countries sent a letter complaining that too many legislative issues impacting agriculture are being decided by environment ministers and without the input of those with expertise in farming. Brussels might look at the ways th...
Obesity Scapegoats; Russian Humor
Obesity Scapegoats It has been popular to blame the rise in obesity on the proliferation of cheap, calorically dense “junk” foods. Most analysts begin their story in 1980, since that is when the government began advising low-fat diets and instead everyone took up sugary carbohydrate...
Farm Bill Hearing Highlights; Rising U.S. Nationalism; Deglobalization Debunked
Farm Bill Hearing Highlights The Senate Agriculture Committee held a hearing today on the horticulture and trade sections of the Farm Bill with a focus on updates. Concern about Mexico’s proposed ban on GMO corn was a bipartisan concern. Newly confirmed USDA Under Secretary for Trade Alex...
New Trade Agenda; Walk the Meat Talk
New Trade Agenda Tomorrow will present the Senate Agriculture Committee’s first hearing in preparation for writing a new Farm Bill and the first two topics are trade, and horticulture. It will be the first hearing for newly confirmed USDA Under Secretary for Trade Alexis Taylor. The line...
Philippines Agriculture; Future Trade Policy
Philippines Agriculture After remittances from overseas, agriculture and fisheries are the most important industries in the Philippines. A country of 114 million people of which one-quarter are engaged in agriculture. It is such an important sector that President Ferdinand “Bongbong&rdquo...
USTR Downgraded; Lightweight Committee
USTR Downgraded The Office of the U.S. Trade Representative sits inside the Executive Office of the President. No different than other offices situated under the umbrella of the White House, it serves as both a lead and a coordinator amongst the various departments and agencies. Typically, depa...
Dirty Deal; Standards Battle
Dirty Deal During the early days of negotiating the Uruguay Round, industry leaders fretted that trade liberalization aspirations would be thwarted by protections sought by agriculture. Spin forward nearly four decades and the reverse concern is at hand – sacrificing U.S. corn exports to...
Foreign Desk at State; IRA Confusion; Grain is Value-added Water
Foreign Desk at State Under Secretary Jose Fernandez has proved that an American desk is needed at the State Department. Speaking at the Center for Strategic and International Studies, the tin-eared Fernandez said that market access is not as important as it used to be because U.S. tariffs are...
Policy Shorts
Mexico Shrug U.S. trade officials meeting with their Mexican counterparts raised "grave concerns" over AMLO’s agricultural biotechnology policies and said modifications proposed thus far are inadequate. They committed to fully defend U.S. rights under the USMCA. The issue carries urgency...