USA Farm Projections (Part Two)
Jim Wiesemeyer (wiesemeyer@gmail.com), Washington DC agricultural insider, Virginia, spoke recently about US agriculture. Email him for free daily insights. Jim offered insights on E-15, Aviation fuel, and projections for the US Farm Bill.
Jim is optimistic that Congress will pass a US ag farm provision for year-round E-15 Ethanol. While some Congress members are opposed, the majority want this legislation passed. The effect on corn markets may be slow though because it takes time to build new facilities for increased ethanol production.
The aviation fuel (45Z) seems to be stalled. It is set to expire soon (2029) but no rules have been made. This would be a boon for USA agriculture if 45Z was a reality. It will stay stalled until a new farm bill is enacted. The 45Z Clean Fuel Production Credit provides a tax incentive for producing low-emission fuels including Sustainable Aviation fuel made from grain.
Jim also reported on the USDA crop estimates. Currently the way USDA collects the info seems to be outdated. The USAD crop estimates have been criticized because they are so slow, out dated, and not all that accurate. USDA is looking for comments and solutions. If there are no US farm reports, there is no crop base. On the other hand, markets are very efficient at collecting this information. Market traders use drones and instant data to update crop progress while USDA still uses crop surveys and does not use drones. Free market access to that data is an issue.
Jim also discussed the current farm economy. John Deere farm equipment sales are down 15–20% along with Cargill, ADM, Bunge (soybean oil), and Louis Drefyfus. Caterpillar equipment sales are way up, mostly for industrial equipment sales. Fertilizer prices are soaring due to the Iran war and shipping restrictions.
The next FARM Bill has moved on in the House but its prospects are questionable. In order to get a new US FARM bill, that requires consensus and a majority. According to Wiesemeyer, the current prospects of Republicans winning the senate stands at 67% while Democrats prospects of winning the House are 77%. That leads to a lot of infighting and little legislative action. It is still early yet, but US agriculture needs a new Farm bill!
Trump is pushing for Trade goals to protect farm markets but he still wants to generate more money with tariff taxes. That usually leads to foreign governments slapping retaliatory tariffs on agricultural goods. What Brazil is doing is what the USA needs to do! Strengthen domestic consumption of US agricultural products. For grains that includes ethanol, 45Z Aviation fuel, increased USA livestock production, industrial uses for ag products, etc.
Jim discussed Brazil, who is becoming our nemesis in grain and livestock production. Brazil is #1 now in Soybean and Cotton production and #3 in corn production. In a few years, according to projections they will pass us in corn and they recently passed us in Cattle production (2025) to become #1. They are also major producers of poultry and hogs. They also lead in coffee, sugar cane, and orange juice. Brazil is a low-cost producer and is increasing its domestic consumption of ag products.
Weisemeyer also offered some insights on Trump himself and on his cabinet in relation to US agriculture. First, Trump is very impulsive, a cunning leader, and decisive. He is pushing tax cuts, deregulation, and is against fraud, crime, and illegal immigration. Weisemeyer expects AI and robots to greatly help with Ag labor issues in the future. Trump has a very loyal cabinet. Trump is all about America First and helping the General public. Trump will be pushing affordability, lowering inflation, lowering interest rates, and lowering taxes before the mid-term elections. That may include lowering food prices.
Trump is also pushing MAHA (Make America Healthy Again) along with Robert Kennedy. That could have a big effect on GMO products, ultra processed products, and pesticides but that effect is still unknown. Should be watched carefully. It could affect soybeans because soybeans are highly processed more than any other farm commodity.
Lee Zeldin (USEPA) originally did not like ethanol but Trump has got him supporting ethanol. Brook Rollin (US Secretary for Agriculture) has close ties to Trump. She was #2 to be his Chief of Staff. She is a lot like Trump. Probably needs to spend more time with actual farmers but is a solid, well articulate person to lead the Department of Agriculture according to Wiesemeyer.
Wiesemeyer expects $15–17 billion dollars in more US farm aid but says Congress is getting farm income fatigue, so it is not a guarantee. All of the above are Wiesemeyer insights.
