Despite what you may be hearing, there is a growing unrest farm country.
Today will not help temper that. Three major news stories today are really driving prices lower.
First a major fire at the second largest beef production plant in the US has driven cattle prices lower. While the Tyson plant in Kansas is responsible for 6% of beef production so consumer prices will probably not be greatly impacted those shipping to the plant and its associated feedlots will be scrambling and will ripple out putting the production plants in a strong bargaining position. Ranchers will get a bit of a break because of the next bits of news.
The USDA crop production report came out much better then expected. This has put pressure on prices across the board and sending corn to its market limit. While planted acres are down expected yields are better. While nobody quite believes these numbers, they are the best we have.
But the bit of news that will really play into the growing unrest in the midwestern corn belts is what the EPA did. The EPA granted 31 of the 40 RFS (renewable fuel standards) waivers. This is on top of the 53 waivers already granted to big oil which translated into 2.6 billion gallons of ethanol taken out of the market. Whatever you think about biofuel production, this is a huge hit to corn and sorghum. To add insult to injury the EPA is toting the approval of atrazine in its press release as if a chemical to increase production will help when there is nowhere to sell what they already produce.
While I don’t see a massive shift from Red to Blue. We really do not need a massive shift to put several unexpected states into play. But Rural America knows what should have been a pretty good year is turning into a disaster. China normally produces 70% of its food consumption but this year between ASF (African Swine Fever) and Armyworms estimates are now that could be as low as 60%. When your biggest market is blocked at a time when their demand grows you know you are screwed.