Drought conditions in Mexico have impacted the top producing states for corn (Sinaloa), sorghum (Tamaulipas), and wheat (Sonora). Corn estimates are revised downward from 5.5 MT to 4.8 MT. Similarly, wheat production is expected to decrease by about 150 to 160 thousand MT. Farmers have reported a reduction in animal inventories of up to 40 percent. Although the rainy season, which started June 1, is projected to be above average, the country's northern regions are expected to struggle with drought conditions. These conditions could mean higher grain exports from the US to Mexico, possibly surpassing the $18.4 billion in exports from 2020.
The US biofuel market is expected to grow by 20% by 2026. U.S. Corn ethanol output hit its 15-month high, reaching 1.06 million barrels per day in the week ending June 4. Corn use for ethanol will be at least 75 million bushels higher than the original estimate of 4.975 billion bushels at these output levels. Similarly, renewable diesel production in the US is expected to grow to 63 million barrels by 2024, requiring an additional 17 billion pounds of feedstock. Unlike biodiesel with blending limits, renewable diesel can contain up to 100% of the renewable feedstock. Producers rely on corn and soybean oil for biofuel production. USDA recently announced $700 million in aid to biofuel producers recovering from the financial impacts of the pandemic.
A 2021 study showed each sector by state and their relative contribution to the country’s economic activity. The report also indicated a $17 return on investment on every $1 spent on R&D in agriculture over the last century. However, the US has fallen behind on agricultural investments compared to China, Brazil, and India. Several organizations joined in on a letter to the president asking for increased investments, at least $40 billion, for agricultural research in the infrastructure bill.
The USDA’s plan to provide debt relief payments for minority farmers for up to 120% of indebtedness is currently on hold after a federal judge granted a restraining order in a lawsuit challenging the constitutionality of the program. At least seven federal lawsuits filed across the country challenging the program, which passed Congress in March. However, USDA is processing these payments and is encouraging eligible farmers to submit paperwork.
This year’s prediction for the dead zone, an area of low to no oxygen in the Gulf of Mexico, is predicted to be about 4,880 sq. miles, below the five-year average of 5,400 sq. miles. However, the Interagency Mississippi River and Gulf of Mexico Hypoxia Task Force set a goal of 1,900 sq. miles. The dead zone is primarily caused by excess nutrient runoff from urban and agricultural areas throughout the Mississippi River watershed. The picture below shows the land use categories within the watershed.
Starting June 15, USDA began releasing payments for agricultural producers affected by natural disasters in 2018 and 2019, with approved applications for the QLA program and the Wildfire and Hurricane Indemnity Program plus (WHIP+). QLA provides assistance to crop and forage producers for losses in each crop year, 2018, 2019, and 2020.
This proposed act ensures fair competition and fair trade practices, safeguards farmers and ranchers, protects consumers, and protects members of the livestock, meat, and poultry industries from unfair, deceptive, discriminatory, and monopolistic practices.
The USDA intends to take three actions related to the ACT,
A recently introduced bill would add agriculture exemptions, mainly increasing hours-of-service flexibility for ag and livestock haulers. Three main provisions included in the HAULS Act of 2021 include