Vilsack Comments on Host of Issues During House Ag Hearing
Canada food prices, availability already being impacted by Covid vaccine mandate
In Today’s Digital Newspaper
• Equities are selling off again
• Bitcoin plummets to lowest level in five months
• Intel investing $20 billion to make semiconductor chips in Ohio
• U.S. home sales surged to 15-year high in 2021
• Biden administration raises federal minimum wage to $15 per hour
• Record lumber prices and cardboard production lift southern timber prices
• Federal reviews potential benefits and risks of issuing U.S. digital currency
• Union Pacific caught off guard by absent workers
• Vilsack comments on a host of policy, energy and other issues
• Nomination for USDA undersecretary for trade continues to be delayed
• China puts Iranian oil in state reserves
• China cuts additional interest rates
Livestock, Food & Beverage Industry Update:
• Pepsi and Beyond Meat are planning a vegan jerky snack
• Vaccine mandate for truckers in Canada and U.S. having impacts already in Canada
• Japan expands Covid-linked actions as Omicron infections surge
Other Items of Note:
• Biden’s Ukraine remarks draw ire, dismay
• Biden meets virtually with Japanese Prime Minister Fumio Kishida today
Equities today: U.S. stock futures indicate further losses at Friday’s open, while markets in Europe and Asia-Pacific also tumbled overnight. Earnings from Netflix and Peloton, the prospect of tighter Federal Reserve monetary policy, and tensions between the U.S. and Russia are all weighing on sentiment across the globe. Asian equities ended mostly lower in the wake of the late tumble in US equity markets Thursday. The Nikkei fell 250.67 points, 0.90%, at 27,522.26. The Hang Seng Index was up 13.20 points, 0.05%, at 24,965.55, on a late push into positive territory. European equities are broadly lower in early trade, under pressure from the opening bell. The Stoxx 600 was down 1.7% with regional markets down 1% to 1.9%.
U.S. equities yesterday: The Dow lost 313.26 points, 0.9%, to 34,715.39. It was the index’s fifth consecutive down session, its longest such streak since September. The blue-chip index has fallen in nine of the past 11 sessions. The S&P 500 dropped 50.03 points, 1.1%, to 4,482.73. The Nasdaq dropped 186.23 points, 1.3%, to 14,154.02. The index fell more than 3% from its intraday high to its low. It is now down nearly 12% from its November high.
On tap today:
• European Central Bank President Christine Lagarde joins a virtual global economic outlook panel at Davos Agenda 2022. Livestream here. (7:30 a.m. ET)
• Conference Board's leading economic index for December is expected to increase 0.8% from the prior month. (10 a.m. ET)
• Baker Hughes rig count is out at 1 p.m. ET.
Intel is investing $20 billion to make semiconductor chips in Ohio. The new factories, to be built near Columbus, are part of an attempt to reduce U.S. reliance on chip manufacturers in Taiwan.
U.S. home sales surged to a 15-year high in 2021, powered by low borrowing rates and an intense buyer demand that are expected to keep the market hot during the first months of 2022. But the recent rapid rise in interest rates has some housing economists forecasting that the market frenzy will subside in the second half of the year. Existing-home sales rose 8.5% from a year earlier to 6.12 million, the National Association of Realtors said Thursday. Home prices grew at a record pace across the country last year. Homes also sold faster than ever. Many went under contract within a week of going on the market, compelling buyers to make snap decisions about one of their biggest life purchases.
Biden administration raises federal minimum wage to $15 per hour. The Biden administration has directed agencies to raise the federal minimum wage for gov’t employees to $15 per hour, a move which will affect around 700,000 employees that work primarily at USDA, the Department of Defense and Department of Veterans Affairs, according to a statement from the Office of Personnel Management (OPM). Agencies are being instructed to put the new wage rate in effect by Jan. 30. The U.S. Postal Service and Postal Regulatory Commission are exempt from the order. The administration last year raised the minimum for federal contract workers to $15 per hour.
Record lumber prices and cardboard production are starting to lift southern timber prices from their yearslong slump. Wet weather has helped, too, the Wall Street Journal reports (link). A lot of woodlands are too mushy to log, putting a premium on trees that can be harvested from dry ground. Analysts, foresters and timberland owners say it is still too early to call an end to the timber bust — which began with last decade's housing bust—and recovery is uneven. But the average price in the South for pine trees used to make lumber hasn’t been higher in more than a decade.
• Outside markets: The U.S. dollar index is weaker ahead of U.S. trading, with only the euro firmer against the greenback. The yield on the 10-year U.S. Treasury note has fallen, trading around 1.78%. Gold and silver futures are lower ahead of U.S. market action, with gold around $1,834 per troy ounce and silver around $24.44 per troy ounce.
• Bitcoin plummeted to its lowest level in five months. About $150 billion was wiped off the cryptocurrency market on Thursday, according to data from CoinMarketCap, a cryptocurrency exchange. The drop is in part explained by Russia’s central bank proposing a ban on the use and mining of cryptocurrency. Broader downturns in America’s markets did not help.
• Federal Reserve on Thursday launched a review of the potential benefits and risks of issuing a U.S. digital currency, as central banks around the world experiment with the potential new form of money to keep pace with private-sector payments innovations. Fed officials have been divided on the matter, making it unlikely they will decide soon on whether to create a digital dollar. "The Federal Reserve will only take further steps toward developing a [Central Bank Digital Currency] if research points to benefits for households, businesses, and the economy overall that exceed the downside risks,” according to a Fed research paper.
• Crude oil futures remain under significant pressure ahead of U.S. trading, with U.S. crude around $84.15 per barrel and Brent around $87 per barrel. Futures were under pressure in Asian action with U.S. crude around $85 per barrel and Brent under $87 per barrel.
• If Russia invades Ukraine, the head of the International Energy Agency is warning that it will have major implications on the oil industry — driving up oil and gas prices.
• Union Pacific said it was caught off guard by the number of workers absent because of quarantines and getting their vaccines, which led to fewer on-time trips and other deteriorating operating performance in the fourth quarter. Hundreds of employees have been out on any given day because of infection or having been exposed to the virus.
• NWS weather: Significant icing across the coastal plains of the Carolinas today and tonight; wintry weather this morning from southern Texas to the western Gulf Coast... ...Arctic chill continues across much of the central and eastern U.S.... ...Light snow across the northern Plains will move toward the upper Great Lakes as snow showers across central Rockies move toward the southern Rockies.
— USDA Secretary Tom Vilsack appeared before the House Ag Committee Thursday for nearly four hours. Highlights of what he said during the hearing, including some comments to reporters on other topics of note:
- Confrontation at the start. Ranking Member GT Thompson (R-Pa.) called the hearing “well overdue,” and expressed frustration with a lack of responsiveness by USDA on inquiries from GOP lawmakers. He leveled criticism on the Biden administration’s agenda including ag and environmental regulatory actions, spending, and what he said was an inadequate response to supply chain and labor challenges. The nearly four-hour session eventually took on a more cordial tenor, with lawmakers from both sides of the aisle focused more on the department’s recent and upcoming actions.
- State of U.S. agriculture. “Our farm income is as good as it has been in the last eight years. We’ve had record exports,” Vilsack said at the start of his testimony. As lawmakers begin their work on farm bill reauthorization, he urged them to focus on fixing a particular issue: the rural extraction economy. It is the “heart of the challenge” that rural farmers have faced for a long time, the secretary said. “An extraction economy is where we … take things from the land and rather than convert them and adding value [to products] in the rural areas where the resources [are grown], they are transported long distances to where they are ‘value added’ in some other location where opportunities and jobs are created,” he said. He advocated a “circular economy” where wealth is created and stays in rural areas. “We learned during the pandemic that our system isn’t as resilient as we hoped it would be,” he explained. “A way to make it more resilient is to create local and regional opportunities. That’s one of the reasons we’re focused on expanding processing capacity at the local level, so our livestock producers have the choice of local facilities that create local jobs and allow revenue and wealth to stay in the community.”
“Biofuels is one example, but there are a multitude of ways in which we can convert agricultural waste products into a wide variety of things beyond renewable energy and fuel, to include chemicals, materials, fabrics, fibers — again creating opportunities for farmers and additional income sources as well as rural jobs,” Vilsack detailed.
- WHIP+ payouts coming in April or May. Many lawmakers pressed Vilsack about pending Covid-19 and disaster aid payments for producers, notably via the Wildfire and Hurricane Indemnity Program-Plus (WHIP+) program, which Congress authorized $10 billion for over four months ago with instructions to make the program less complex and to implement accelerated payments versus the lengthy payment process for eligible 2018 and 2019 ag disasters. The coming program impacts eligible 2020 and 2021 crops, livestock and dairy ($750 million for the livestock industry).
Vilsack said farmers would likely see disaster relief payments for 2020 and 2021 losses in April or May. He said the payments would be provided in two tranches to accelerate an initial round of assistance. USDA is using data from the Livestock Forage Program to determine eligibility for payments to livestock producers. For other farmers, USDA is creating “pre-filled applications” with the use of data from crop insurance and the Noninsured Disaster Assistance Program.
Ag Chair David Scott (D-Ga.) asked Vilsack if additional pandemic aid was in the works for cotton merchandisers. Vilsack responded that USDA has been in consultations with “a number of representatives of the cotton industry and cotton and textile users,” and said USDA’s Farm Service Agency (FSA) is “drafting a notice of funds availability that we hope to be able to make available sometime in the early spring, that would provide some additional resources.”
Racial equity is a factor being weighed by USDA as it looks to address “gaps and disparities” in previous pandemic aid. Thompson said he was disappointed that despite asking USDA to provide data showing such disparities, it took nearly nine months for the department to respond with “a regurgitation of preexisting USDA press releases.” He said the pandemic “has been devastating to all stakeholders, and communities,” expressing a hope the department will be “more responsive… going forward.” Vilsack said the biggest focus is addressing disparities in aid between regions and commodities seen in payments made under the Trump administration, noting conclusions from a recent Government Accountability Office (GAO) study. He said USDA is focused on using remaining resources to level out those differences and pointed to the rollout of aid for the biofuels industry and hog farmers that sell on the spot market as fruits of that work.
- Dairy aid. Rep. Jim Costa (D-Calif.) pressed Vilsack on the 5-million-pound production cap associated with dairy market volatility aid and asked what could be done to ensure the limitation does not disadvantage larger producers who also sustained pandemic-induced losses. Vilsack explained the effort aims to help smaller producers impacted by divergent milk class prices, a problem he said was exacerbated by the Farmers to Families Food Box Program (FFFBP). He added that USDA is working on “a variety of other ways to help this dairy industry across the board.”
- Dairy pricing. Thompson said he was appreciative of discussions around reforming the Federal Milk Marketing Order (FMMO) and remarked “the system has long needed some improvements for dairy farmers.” He asked Vilsack if he would commit “to help the process along,” to reach a consensus across the industry on changes. Vilsack acknowledged that finding an industry consensus around any changes is key, noting that views differ across different states and regions. “I think that the industry is serious about this effort, and we will work collaboratively with the industry to try to improve,” he remarked, adding that the sector’s struggles are why USDA rolled out supplemental dairy margin assistance and volatility assistance through its pandemic aid effort and the new Dairy Donation Program (DDP).
- On the issue of whole milk in schools, Vilsack said as it relates to milk consumption at schools, one issue is the cost of whole milk as well as the containers used in school which are difficult to open and create a barrier. Also, the temperature of milk offered at schools is not the temperature it should be, he said, noting USDA is looking at ways to increase resources for schools, and create milk distributed at very cold temperatures and in containers which are less cumbersome.
- Climate and next farm bill. Noting that climate change is increasing periods of drought, Rep. Angie Craig (D-Minn.) asked Vilsack whether USDA could work with Congress to come up with a more comprehensive mechanism to tackle the issue in the next farm bill. Vilsack said USDA is currently focused on getting WHIP+ aid out the door but stressed that as lawmakers consider the next farm bill, they should ensure any new program is flexible and considers regional differences. “The reality is we're so complicated in agriculture that we really need to create regional approaches that allow us to have some greater flexibility in the application of these programs,” he explained.
- Payments to hog producers. Vilsack was asked about the status of disbursements under the Spot Market Hog Pandemic Program (SMHPP) announced in December. Vilsack blamed delays on issues relative to eligibility requirements and said USDA is working to revise the application process. “We hope to get that done very soon and the expectation is, once we do, we hope to be able to see payments made sometime hopefully [in] the March timeframe.”
In December, USDA published a notice of funding availability for hog producers who were not able to sell hogs on the spot cash market during the pandemic. The signup opened Dec. 15 until Feb. 25. Vilsack says when USDA initially set it up, it realized some issues relative to eligibility requirements that created challenges.
- Trade policy enforcement. Several lawmakers lauded moves by USDA and the Office of the U.S. Trade Representative (USTR) to ensure Canada and Mexico comply with commitments under the U.S.-Mexico-Canada Agreement (USMCA). Costa asked Vilsack what areas USDA is focused on in terms of trade enforcement. Vilsack touted the US’ recent win in its challenge of Canada’s operation of their dairy tariff-rate quotas (TRQs), which he said will ensure they will now be implemented as intended. On Mexico, Vilsack said he and USTR Katherine Tai are working with their Mexican counterparts on several concerns including glyphosate and biotech approvals for corn.
Vilsack said another priority is pressing China to meet unfulfilled commitments under the Phase 1 U.S./China deal, including closing a shortfall on purchase commitments. China is $13 billion short on purchases for the first year of Phase 1 and around $3 billion for short for the second — a total shortfall of around $16 billion, Vilsack said, expanding on comments he first made earlier this month during appearances at the American Farm Bureau Federation’s (AFBF) annual confab. Notably, USDA Foreign Agricultural Service (FAS) said during the same convention that the shortfall was around $6 billion to $7 billion. During the hearing, Rep. Tracey Mann (R-Kan.) told Vilsack it was his understanding that the $16 billion figure represented the purchase shortfall across all purchase commitments — not just ag — but Vilsack insisted that the ag shortfall was $16 billion. Overall, Vilsack said there are seven key areas that China has fallen short relative to its Phase 1 commitments, including purchases, biotech approvals, and several sanitary and phytosanitary (SPS) issues out of the 57 they committed to under Phase 1. “We're pushing on both of those aspects — more purchases, completing the vital sanitary and phytosanitary requirements of that agreement,” he remarked.
- On supply chain and shipping issues, Vilsack discussed the administration’s actions aimed at addressing export challenges — including the problem of empty shipping containers being dispatched from U.S. ports. “We're looking for ways in which we can utilize resources to fill those containers,” he said. On the trucking side, Vilsack noted USDA is working with the Department of Labor (DOL) to help address the shortage of drivers by expanding apprentice programs and encouraging states to speed the processing of new commercial drivers’ licenses (CDLs).
- Climate-smart ag. USDA’s Climate-Smart Ag and Forestry (CSAF) initiative also surfaced, with Rep. Austin Scott (R-Ga.) asking what authority USDA was relying on to tap an estimated $1 billion in Commodity Credit Corporation (CCC) funds for upcoming CSAF pilot programs. CCC “in part is designed to provide for the promotion of commodities,” and CSAF is focused on helping farmers meet demand for climate-smart commodities, Vilsack explained. The authority to tap CCC for CSAF “falls under either section four or section five of the CCC [charter] and we are very confident that we have the capacity and ability to use this without jeopardizing any of the other needs or reasons for the CCC,” Vilsack detailed. He noted the department’s effort was modeled in part on recommendations from the Food and Agriculture Climate Alliance (FACA), which counts AFBF and other top food, ag and environmental groups among its members.
Vilsack was also asked about eligibility for CSAF and conservation efforts, like expanded incentives for cover cropping, given many practices are not feasible for crops grown in orchards. He explained that CSAF is aimed at gathering input from all corners of the ag sector, and that “there's nothing restricting the ability of the tree fruit industry from coming together with a program specifically designed to meet their needs, to do what they can do in terms of a carbon footprint and come to us with an application for resources to be able to fund that.”
Cover crop payments coming. Vilsack said USDA’s Risk Management Agency would be announcing “very, very shortly” a new round of payments to farmers who plant cover crops. USDA provided about $59 million to farmers in 2021 on about 12 million acres of cover crops.
- Regulatory actions. Several Republican lawmakers voiced concern about EPA regulatory moves including revoking crop pesticide tolerances and its effort to rework the Waters of the U.S. (WOTUS) rule. Rep. Scott DesJarlais (R-Tenn.) asked how Vilsack was advocating for the ag sector to see their concerns are addressed. USDA is “encouraging the EPA to do what they are currently doing, which is to reach out to farm groups and farmers across the country to listen to concerns that they may have” about WOTUS, Vilsack said. USDA is also looking at ways to help producers once the new rules are set “in terms of providing assistance and how through our conservation programs to be sure that folks are in compliance.”
On chlorpyrifos, Vilsack said, “We have ongoing discussions with EPA. I don’t know if we’ve reached consensus, but discussions are ongoing.”
FDA rulemaking. Rep. Vikki Hartzler (R-Mo.) asked Vilsack how the department will engage with the Food and Drug Administration (FDA) on rulemaking about the regulation of genetically engineered animals, noting the memorandum of understanding (MOU) between the two agencies signed in the waning days of the Trump administration. “We actually thought we had done that work with a signed MOU,” he replied, “but there is some indication from the FDA and [its parent agency, the Department of Health and Human Services (HHS),] that they don't believe that there was authority for the folks who signed that on behalf of FDA.” Once an FDA commissioner is confirmed, Vilsack pledged USDA “will work very closely with that individual to make sure that there are ongoing discussions and negotiations to complete that MOU.”
Background. At the end of the Trump administration, USDA and FDA a MOU on how to regulate genetically engineered livestock. With recent news on the successful transplant of a genetically engineered pig heart in a human, two members sought for an update on allowing for a clear path of commercialization.
Regulation of feed additives, particularly one that promises to dramatically reduce methane emissions from cattle, was another regulatory-related issue raised by Rep. Jim Baird (R-Ind.), noting FDA has regulatory jurisdiction over those products but approvals have languished. Baird asked what can be done to help facilitate the process, to which Vilsack agreed there is a need to modernize regulatory processes for feed additives “so that we don't treat them necessarily as pharmaceutical products and having to go through a very extensive and very expensive process.” Vilsack said he doesn’t believe FDA should be regulating feed additives such as those known to reduce methane emissions as pharmaceuticals, saying regulations there also need modernizing. “Other nations use these feed additives in the dairy industry to get a market advantage that their dairy product is sustainably produced.”
- Pork and poultry line speeds was also raised during the session. Vilsack highlighted USDA’s Food Safety and Inspection Service (FSIS) new trial program started in November to again allow pork processors operating under the New Swine Inspection System (NSIS) to operate at higher line speeds. Many of the plants previously had waivers to operate lines faster but a federal court decision scrapped the waivers because it found the underlying rulemaking failed to adequately consider worker safety impacts. USDA is now working with nine businesses, and five have applied for a waiver, to allow for those speeds to again increase without sacrificing worker safety or farmer profitability.
Vilsack was asked why the FSIS has yet to approve any pork plant applications under the trial program. “They’re in the process of making sure — working with our partners at OSHA — that the worker safety requirements of the waiver are valid and strong enough and that there is a way of providing appropriate oversight,” he responded.
On the poultry side where line speed waivers are also being challenged, Vilsack said the department has asked the court to remand the litigation back to USDA “so we can create a similar waiver process in the poultry area” that would address worker safety, packer and producer concerns.
Vilsack was also queried about a provision included in the fiscal year 2022 House spending measure that would mandate lower speeds at processing plants. Vilsack said he hopes that the creation of a higher poultry line speed pilot program will provide the department data needed to find a balance that preserves worker safety and the need to ensure adequate processing capacity. “I think there is a way to find a common ground here. And that is what we're going to continue to try to do at USDA,” he stated.
- Livestock markets. Despite Biden administration suggestions meatpackers are engaging in anticompetitive behavior that harms farmers and subsequent Department of Justice (DOJ) investigations, there has been little to show for the effort, said Rep. Dusty Johnson (R-S.D.). “If we've got concerns about the marketplace, and we announced an investigation seemingly every year and we never drive to a conclusion, does that actually benefit the marketplace at all?” he asked. Vilsack said DOJ actions have to “go through the process, before you can make a determination.” He pointed out that USDA and DOJ recently announced a joint effort aimed at facilitating the reporting of anticompetitive activities to help gather more information. Pressed on when producers can expect results from those moves, Vilsack said he did not have that information but promised to circle back with lawmakers after the session.
P&SA rules and regs. Vilsack said USDA is taking separate action through its own information gathering initiatives and working to update Packers and Stockyards Act (P&SA) rules to aid in enforcement. He reiterated USDA is also examining “Product of USA” labeling rules, including a “fairly extensive survey to find out if consumers understand what that means, and whether they place value on it.”
Cattle contract library. Vilsack was also queried on what the administration is doing relative to legislation to create a cattle contract library, which cleared the House by a wide margin but has yet to get a vote in the Senate. “We're very supportive of that effort, and very supportive of trying to get information so people know what a legitimate contract is and what reasonable contract provisions are,” he responded.
- Input prices. Surging fertilizer and other input prices have been a focus recently, especially for corn producers, and Vilsack was asked what USDA is doing to help farmers. The issue is in part a factor of global demand, coupled with a lack of domestic production capacity, Vilsack explained. Boosting domestic production and ensuring efficient use of fertilizer are key, he said, and USDA is looking for ways to compensate farmers that reduce fertilizer usage — pointing to the department’s new split nitrogen crop insurance program. The program “essentially says if you only apply nitrogen once during the year, as opposed to twice, [and] if you have a crop [production] reduction, then there's crop insurance that can protect you against that reduction,” he explained. Rep. Tracey Mann (R-Kan.) said the idea that reducing fertilizer usage to address the problem of surging prices is “not going to cut it for my producers who have had plans in place, and crop rotations and such for years.” He pointed to tighter global fertilizer supplies and falling imports, noting China is exporting less, and asked what can be done to address the situation. “We've been historically opposed to export controls and we'll continue to be historically opposed to export controls,” Vilsack stressed. He added that he did not mean to imply farmers should “simply eliminate the utilization of fertilizer,” rather the goal is to apply it more efficiently when and where needed. Vilsack was also asked by Rep. Julia Letlow (R-La.) whether he had reviewed the recent studies by Texas A&M university economists — one that she requested — detailing the causes and impacts of rising fertilizer prices on corn and other producers. “I looked at it last night in preparation for this hearing,” he replied, noting it underscores the complexity of the problem and the lack of short-term fixes.
- Biofuels and RFS. Rep. Hartzler asked about the level of support by the Biden administration for biofuels and questioned why this administration would propose retroactively lowering previous year levels. Vilsack defended the Environmental Protection Agency’s proposed lower levels for 2020 but added its 2021 and 2022 levels are the highest in history allowing for a continued projected growth. Vilsack also touted this administration has offered $700 million of additional pandemic assistance to biofuel producers and $100 billion to expand access to higher blends. “This administration is also supporting the industry with 65 [small refinery exemption] waivers denied that very well may have been granted under the previous administration,” Vilsack said.
Electric vehicles. Rep. Mary Miller (R-Ill.) said her constituents are concerned about the Biden administration’s focus on electric vehicles and questioned if the administration has shown sufficient support for biofuels. In response, Vilsack reiterated the importance of the $700 million in pandemic relief and $100 million in infrastructure support that the USDA is offering to the biofuels industry, along with the impact of the EPA’s decision to reign in the SRE program. He also stressed that the Biden administration has also set an ambitious goal for sustainable aviation fuel (SAF). “I think it’s very unfair to suggest that this administration has not been supportive of the biofuel industry,” he said.
Rep. Angie Craig (D-Minn.) also questioned Vilsack regarding the focus on electric vehicles. “There is a lot of conversation about electric cars,” Vilsack said, but stressed that cars with internal combustion engines will continue to remain on the road for the foreseeable future and will require the use of biofuels. Liquid biofuels will also continue to be necessary for aviation and marine transport. “We won’t see the elimination of [the biofuels industry] — we’ll see an expansion of it,” Vilsack said. “I’m excited about this industry and think the future is bright.”
Rep. Michelle Fischbach (R-Minn.) expressed concern that the fact that biofuels reduce emissions is getting lost in the conversion on climate change and asked about the agency’s support for biofuels. “I am confident that I am one of the most ardent proponents of biofuels anywhere in this country and have been for years — decades,” Vilsack said in response, assuring the committee that biobased fuels remain a priority for the current administration.
- Vilsack calls vaccine mandate a ‘false issue.’ Vilsack pushed back on concerns that the government-wide vaccine mandate is harming farm programs. He labeled the concern a “false issue,” citing data he said showed farmers were being served at pre-pandemic levels: Of 90,000 USDA employees, 600 have either not been vaccinated or haven’t received an approved exemption or accommodation, he said. About 89% of USDA’s workforce has been vaccinated.
- Build Back Better’s $10 billion in child nutrition provisions could be attached to a child nutrition reauthorization bill, Vilsack told reporters. Neither the House nor the Senate has acted on that legislation.
— Nomination for USDA undersecretary for trade continues to be delayed, according to USDA Secretary Tom Vilsack, who said it is due to required vetting. “He has a complex set of business relations, and he knows trade,” Vilsack said, despite not naming the nominee.
— China puts Iranian oil in state reserves. China has offloaded nearly four million barrels of Iranian crude oil into state reserves in the southern port city of Zhanjiang over the past few weeks, a trade source and ship tracking specialist Vortexa Analytics told Reuters. The move comes as world powers are locked in tough negotiations with Iran to revive a 2015 nuclear deal that will include the lifting of U.S. sanctions on Iranian oil. The refilling of China’s strategic oil reserves also comes ahead of a planned release of oil from emergency stockpiles in a coordinated effort with the U.S. and others to help cool global oil prices.
— China cuts additional interest rates. The People’s Bank of China (PBOC) said today it has cut interest rates on its standing lending facility (SLF) loans by 10 basis points effective Jan. 17, Reuters said in a report noting the PBOC confirmed the action in response to a question from the news agency. PBOC said it lowered the overnight SLF to 2.95% from a prior 3.05%, the seven-day rate was lowered to 3.10% from 3.2%, and the one-month rate was lowered to 3.45% from 3.55%. The SLF allows financial institutions to get temporary liquidity from the PBOC. The move capped off a week which saw China lower lending rates in several areas as it seeks to bolster the Chinese economy.
LIVESTOCK, FOOD & BEVERAGE INDUSTRY
— Pepsi and Beyond Meat are planning a vegan jerky snack as the first product in their joint venture, a test of the enthusiasm for the plant-based meat. The companies announced the creation of the Planet Partnership last January, saying that it would focus on creating, producing and marketing new plant-based snacks and drinks. The venture will bring together Beyond Meat’s product innovations with PepsiCo’s distribution and marketing, the companies said at the time.
— Summary: Global cases of Covid-19 are at 342,811,673 with 5,575,956 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 69,308,600 with 860,248 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 531,864,871 doses administered, 209,842,610 have been fully vaccinated, or 63.92% of the U.S. population.
— U.S. will require essential travelers entering the country via land ports of entry and ferry terminals to be fully vaccinated for Covid-19 and provide proof of vaccination starting Saturday. The move, announced by the Department of Homeland Security, is an attempt to combat the rising number of Omicron cases and help relieve the stress on overwhelmed hospitals and health care workers.
A push to encourage truckers in Canada and the U.S. to get vaccinated is stopping a lot more than just Covid-19 at the border. Bloomberg reports that just days after new rules came into effect that require American truckers to be fully vaccinated to cross into Canada, grocers said some produce shelves were bare and the cost of hauling everything from tomatoes to lettuce from the southern U.S. has jumped 25%. Canada relies on imports of fresh fruit and vegetables from its biggest trading partner in the winter. The vaccine mandate is poised to add further strain to a supply chain struggling with labor shortages and weather disruptions. About $45 billion worth of goods crosses the border every month, and Canada is the top export market for 32 U.S. states, according to the Department of Commerce. Most trade between Canada and the U.S. travels by truck.
— Japan expands Covid-linked actions as Omicron infections surge. Japan will require bars and restaurants to close early — 8 pm — in Tokyo and a dozen more areas across the country as it grapples with a rise in infections from the Omicron Covid variant. The restrictions are expected to last through Feb. 13 and come after three prefectures deployed similar measures early this month. Combined the restrictions cover about one-third of Japan.
OTHER ITEMS OF NOTE
— President Biden hardens warning to Russia after Kyiv says no attack is ‘minor’. Ukraine has hit back at Biden’s suggestion that a “minor incursion” by Russian forces into the country might not prompt a severe allied response, forcing Biden to publicly reassure Kyiv that any attack by the Kremlin would trigger strong sanctions. “We want to remind the great powers that there are no minor incursions and small nations,” Volodymyr Zelensky, the pro-western Ukrainian president, wrote on Twitter on Thursday. After Zelensky’s rebuke and alarm in other allied capitals, Biden sought to go back on his own comments, saying at the White House that any Russian incursion would spark sweeping sanctions. “If any, any assembled Russian units move across the Ukrainian border, that is an invasion,” Biden said on Thursday. “Let there be no doubt at all, if [Russian president Vladimir] Putin makes this choice, Russia will pay a heavy price.” In total, Russia has deployed more than 106,000 troops to sites close to the border, according to western and Ukrainian officials. The forces include between 55 and 60 battalion tactical groups, which are highly mobile and strategically independent assault units.
U.S. Secretary of State Antony Blinken was in Berlin Thursday for talks with German, French and U.K. foreign ministers ahead of a meeting today with his Russian counterpart Sergei Lavrov in Geneva.
— President Biden meets virtually with Japanese Prime Minister Fumio Kishida today, the second meeting between the two leaders since Kishida took over from Yoshihide Suga in October. The format of the visit, taken online due to the Omicron variant, is a disappointment for Kishida, who in December had called an in-person meeting “extremely important.” Then, Kishida said he wished to use the meeting to strengthen “deterrence and response capabilities” between the two countries as he sought to maintain a “free and open” Indo-Pacific.