Comments from the cow side on the post-election (Biden).

Discussion in 'Commodity Futures' started by Overnight, Nov 16, 2020.

  1. Overnight


    Weekly blurb...

    (The bolded bit by me is noted as an interesting twist I didn't see coming. I love commodities like this, so many unseen ripple-effects!)


    "Sorting through all the pre-election hype, the Biden post-election reality will define the operating environment for all American agriculture. The most prominent signals from pre-election rhetoric left ag producers a poor indicator for delving into the specifics that will form the foundation of the new administration’s policies. The generalities of electioneering taken by the Biden campaign will find definition under the new administration and particularly the choice for Secretary of Agriculture.

    The top of the list for the new administration will be the surge in coronavirus cases and how to deal with it without killing the economy. It is difficult to anticipate any Biden initiatives that will dramatically change the world from a Trump led approach towards the virus. Declaring all food plants as essential businesses could be at the forefront of new policies addressed by Biden.

    Biden’s advisor on farm policy during the election campaign was former Secretary Tom Vilsack. He is said to be backing former North Dakota Sen. Heidi Heitkamp for the top job — a solidly moderate Democrat who could face less resistance from Senate Republicans during confirmation. Other potential contenders are Reps. Cheri Bustos (Ill.) and Marcia Fudge (Ohio). For her part, Fudge has been one of the toughest critics of Trump’s food and ag agenda, especially USDA’s crackdown on nutrition benefits. Fudge also has a growing coalition backing her, including progressive aggies and the Congressional Black Caucus.

    It is no surprise that much of farm policy under Biden will center on environmental concerns. Biden’s stated goal is to partner with farmers to make American agriculture first in the world to achieve net-zero emissions, giving farmers new sources for income in the process. These statements have little meaning without specific programs outlined to deliver the objectives. After Trump’s EPA scrapped the Obama administration’s Waters of the U.S. rule, which was widely despised by farmers, Biden has said he would scrutinize Trump’s much narrower replacement regulation, incorporating feedback from farmers and ranchers. You can expect to hear more about the Conservation Stewardship Program that will reward farmers with payments for practices that sequester carbon.

    President-elect Biden will be forced to deal with the Renewable Fuel Standards [RFS] that will mean a careful juggling act balancing the farm interest against oil refiners. Ethanol mandates in gasoline is set to expire in 2023 and waivers for refiners will be on the table. Biden has been a typical politician on this issue – awaiting recommendations from the experts.

    Biden also talked about stepping up antitrust enforcement efforts, including in the farm industry. There’s bipartisan concern about agricultural consolidation, particularly in meat production, especially after the coronavirus sparked fears of a meat shortage when massive slaughterhouses shut down and producers were left without any buyers for their livestock. Biden is likely to address antitrust and price fixing charges against the meat packers.

    Biden is sure to reverse Trump’s pre-pandemic attempts to decrease participation in the Supplemental Nutrition Assistance Program, which accounts for the vast majority of USDA’s spending. Biden wants to expand household SNAP benefits by 15 percent during the economic downturn, something Democrats have unsuccessfully tried to include in economic rescue measures.

    Biden’s overall approach to agriculture will be directed towards support for small operations and scrutiny of the larger, more efficient operations. Biden’s ag secretary will examine government farm support payments and is likely to rethink how to distribute the money across the industry, after Trump’s bailout programs were criticized for disproportionately helping Southern farms and big producers over others. Pre-election calls for leveling the playing field are meaningless until translated into legislation with specific programs and those must pass a likely Republican majority in the Senate."

  2. Looks like Biden will take some necessary steps and partner with farmers to reduce emissions into the environment and introduce more eco-friendly practices.