Agriculture policy, global trade and biofuel company profits are in focus as summer nears the midway point.
A host of actions by the Trump administration are sure to keep trade in the forefront of discussions in the nation’s capital. The U.S. late last week slapped tariffs ranging from 10% to 12.5% on 60 countries, on the grounds of failure to impose forced-labor bans. Exempt ag products include certain seeds, fertilizer and pesticides, drawing praise from farm groups.
A fresh 12.5% levy is on top of a 25% tariff put on certain goods from Brazil last week, with exceptions including beef. Brazilian President Luiz Inacio Lula da Silva calls the duties “unfair” and a “strategic mistake.”
“They will harm the U.S. economy and the U.S. partnership with Brazil,” Lula wrote in an op-ed in the Washington Post on Sunday. “Several U.S. industrial sectors depend on Brazilian inputs. Food, footwear, textiles, furniture, auto parts and many other products will become more expensive for U.S. consumers.”
The tariffs include Brazilian tallow, a biofuel feedstock. That pushes demand toward U.S. raw materials, like soybean oil, “supporting soy crush and raising costs for renewable-fuel producers,” No Bull Ag analyst Susan Stroud says. “Margins remain strong on high diesel values, but feedstock pressure will persist because of the record [U.S.] mandate and continued import headwinds.”
Also, amid a murky outlook for the U.S.-Mexico-Canada Agreement, the U.S. plans a 50% tariff on an array of Canadian products starting Aug. 19.
“Energy and potash were excluded, but the changes add more uncertainty around feedstocks, trade flows and USMCA,” Stroud says.
Biofuel and ag company chief executives will have a chance to address the impact of U.S. trade and other policy matters as the quarterly earnings season kicks off this week. Valero Energy and Darling Ingredients, which co-own Diamond Green Diesel, the largest North American renewable diesel producer, are both set to hold conference calls on second-quarter financial results on Thursday.
Corteva, the seed and crop protection agribusiness that plans to split into two publicly traded companies later this year, holds an earnings webcast on Friday.
Legislative snarl
On Capitol Hill, Senate Majority Leader John Thune, R-S.D., faces renewed calls from President Donald Trump to scrap the filibuster, which effectively sets a 60-vote threshold for passing most legislation. Removal is known as the “nuclear option” because of the expected political repercussions.
Thune has repeatedly resisted Trump’s push to do away with the tactic, saying there’s not enough support in the Senate to do so.
Trump says the filibuster needs to be abolished to pass the SAVE America Act, which would require photo ID to vote in federal elections, budget measures and more. “Do it now, before it is too late!!!” Trump said in a social media post this weekend.
GOP efforts to pass the SAVE America Act, Trump’s top priority, have pulled in a months-long, bipartisan attempt in the House and Senate to get a new batch of financial aid into the hands of struggling ag producers.
A path forward for farmer assistance is a top question for Senate ag leaders as the chamber has just two more weeks in session before adjourning until mid-September. The House began a five-week recess on Friday.
Other major priorities congressional ag leaders are trying to pass as soon as possible, and definitely before the Nov. 3 midterm elections, are a bill to allow voluntary, year-round access to higher ethanol-fuel blends, known as E15; a revamp of farm labor laws; and a new farm bill to address key ag policy, like USDA loan limits, that haven’t been updated since 2018.
The House attached parts of the SAVE America Act on various bills passed by the chamber last week, including a funding measure that House Speaker Mike Johnson, R-La., aims to use as the basis for "reconciliation 3.0,” which would allow the Senate to forego the 60-vote threshold before getting full consideration.
Along with the election bill, the proposed $95 billion package would include money for the Pentagon and as much as $12 billion in agricultural aid.
Thune has said the Senate will hold the House budget measure until Congress can work out the plan forward to pass another stopgap funding bill to avoid a government shutdown after Sept. 30.
The Senate next meets at 3 p.m. on Monday.
Monday, July 27
No Bull Ag and Bloomberg Intelligence co-host the fourth annual AgriNext, with the theme “Inflection Point: Policy, Trade, and the Forces Reshaping Agriculture,” in St. Louis, through Tuesday.
The International Association for Food Protection holds its annual conference in New Orleans, through Wednesday.
The Agricultural & Applied Economics Association holds its annual conference in Kansas City, Mo., through Tuesday.
4 p.m. – USDA crop progress report.
Tuesday, July 28
2 p.m. – USDA Livestock and Meat Domestic Data report.
Thursday, July 30
8:30 a.m. – USDA weekly export sales report.
Friday, July 31
The American Sugar Alliance hosts an International Sweetener Symposium, “Navigating a Turbulent American Sugar Market,” with Deputy Ag Secretary Stephen Vaden among speakers; Vail, Colo., through Aug. 5
3 p.m. – USDA Agricultural Land Values report.
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