Evening Report (VIP) -- January 4, 2013

January 4, 2013 08:55 AM

INFORMA RELEASES ANNUAL PRODUCTION SUMMARY EXPECTATIONS... Sources familiar with Informa Economics say the firm has released its expectations for USDA's Annual Crop Production Summary on January 11. The firm reportedly pegs the 2012 corn crop at 10.8 billion bu., 76 million bu. higher than USDA's November estimate, including expectations for a 150,000-acre reduction to harvested area. Informa reportedly pegs the 2012 soybean crop at 3.036 billion bu., 65 million bu. above USDA's November estimate. All cotton production is forecast by Informa at 17.3 million bales, up 60,000 bales from USDA's December estimate.



ECONOMY ADDS 155,000 NON-FARM PAYROLLS IN DECEMBER... This morning's employment report from the Department of Labor showed 155,000 non-farm payrolls were added in December, which was just above expectations of around 150,000 jobs to be added. The Labor Department revised last month's unemployment rate up from 7.7% to 7.8%, and it kept it at that level in this report. Employment increased in retail trade, professional and business services, and health care.

The U.S. stock market had a muted reaction to the report. The U.S. dollar index backed off strong earlier gains, but remained firmer. While the jobs report signals the labor market is improving, it's far from levels needed to indicate economic growth.



FORECAST HOPEFUL FOR PRECIP IN CENTRAL/SOUTHERN PLAINS... Wheat futures were pressured in part today by forecasts for improved precip across much of the Central and Southern Plains next week. Meteorologist Gail Martell of MartellCropProjections.com says hard red winter wheat areas are expected to receive 0.25 to 1.25 inch of moisture, with upwards of 3 inches of rain expected in eastern Texas, Louisiana and Mississippi. Additionally, she says Illinois, Indiana and Ohio are slated to get 0.25 inch to 1 inch of rainfall following a dry December.



FDA PROPOSES TWO NEW FOOD SAFETY RULES... The U.S. Food and Drug Administration (FDA) today proposed two new food safety rules aimed at preventing foodborne illness as part of the FDA Food Safety Modernization Act. Both of the rules are available for public comment over the next 120 days.

The first rule proposed today would require makers of food to be sold in the U.S., whether produced at a foreign- or domestic-based facility, to develop a formal plan for preventing their food products from causing foodborne illness. The rule would also require them to have plans for correcting any problems that arise. This second rule proposes science- and risk-based standards for the safe production and harvesting of fruits and vegetables. Click here for more details and compliance deadlines.



GOP AG COMMITTEE ROSTER... Today, Frank Lucas (R-Okla.), announced the complete list of Republican members who will serve on the House Agriculture Committee in the 113th Congress. Lucas will retain his role as chairman of the committee. Other Republican members include: Bob Goodlatte (Va.), Steve King (Iowa), Randy Neugebauer (Texas), Mike Rogers (Ala.), K. Michael Conaway (Texas), Glenn Thompson (Pa.), Bob Gibbs (Ohio), Austin Scott (Ga.), Scott Tipton (Colo.), Steve Southerland (Fla.), Rick Crawford (Ark.), Martha Roby (Ala.), Scott DesJarlais (Tenn.), Chris Gibson (N.Y.), Vicky Hartzler (Mo.), Reid Ribble (Wis.), Kristi Noem (S.D.), Dan Benishek (Mich.), Jeff Denham (Calif.), Doug LaMalfa (Calif.), Richard Hudson (N.C.), Rodney Davis (Ill.), Chris Collins (N.Y.) and Ted Yoho (Fla.).



MORE SPARRING AHEAD FOR WASHINGTON... Washington Consultant Jim Wiesemeyer warns the public to get ready for a tumultuous 60 to 90 days of sparring, fighting and more cliff-hanging events in Washington that will make the most recent one look like a jump across a puddle of water. Following are four of his insights:

  • The coming 90 days will determine the eventual fate of House Speaker John Boehner (R-Ohio). He said he will no longer negotiate with Pres. Obama. Now we're going to see Boehner's real strategy – and the House GOP Caucus is going to be a lot more together on spending reductions than on what just occurred on revenues.
  • House Republicans will insist on a one-for-one spending cut against an increase in the debt limit. True cuts. Without these, they won't go along. If there is no agreement, Obama will issue an executive order to announce a debt limit hike. Then that will send it to the courts and eventually the Supreme Court. (That means another test for so-called conservative Judge John Roberts.)
  • Obama and Democratic lawmakers will continue to push for more tax HIKES. One such area will be an increase, perhaps a big one, in Social Security payroll taxes. Not in the rate (that already went up two percentage points this year), but in the maximum salary that it applies to.
  • The new farm bill will be linked to what's coming in the next 90 days, despite denial by Senate Ag Chairwoman Debbie Stabenow (D-Mich.). House Ag Chair Frank Lucas (R-Okla.) knows full well that the Ag panels will eventually be given a budget-cutting number and timeframe. Some farm-state members on the Senate Ag panel have told Stabenow they want the House to go first on the farm bill this time. Will Stabenow overreach, again?
  • It won't happen this year, but means testing will come to the crop insurance program. Taxpayers pay 62 cents out of every dollar on the buy-up premium, which lands the program on the list of items to be reduced. Count on it. I just don't know when or by how much.



13 MARKET ISSUES TO WATCH IN 2013... Pro Farmer Editor Chip Flory asks Senior Market Analyst Brian Grete the "13 market-related issues to watch in 2013" on this week's Pro Farmer Profit Briefing segment on AgDay television. Click here to watch the video clip.


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