Analysts Surprised, Again: U.S. Economy Grew at Fastest Pace in Two Years in Q3

When will USDA release FBA farmer payment rates? Depends on which USDA statement you believe

Link: DeLauro Presses Trump Admin. to Add “Pro-Farmer Guardrails” to $12B Aid Plan
Link: The 2026 Policy Crossroads for U.S. Agriculture
Link: USDA Lost More Than 20,000 Employees in Early 2025, Inspector General Finds
Link: Video: Wiesemeyer’s Perspectives, Dec. 20
Link: Audio: Wiesemeyer’s Perspectives, Dec. 20

UP FRONT

— Holiday order compresses data calendar, thins year-end trading — Trump’s Dec. 24/26 federal-holiday order squeezes already-thin year-end calendars, forcing schedule tweaks (notably USDA export sales timing) even as markets face shortened hours, light liquidity, and a fragmented week of “open banks/closed agencies” logistics.

— U.S. economy grew at its fastest pace in two years this summer — Delayed Commerce data show Q3 GDP at a 4.3% annualized pace (consumer spending and net exports leading), reviving “soft-landing” confidence while Trump claims tariff credit—though markets largely shrug because the number is backward-looking.

— Iowa Biodiesel Board warns EPA delay could imperil farmer-owned plants — Iowa’s biodiesel group urges EPA to finalize the 2026–27 RFS by Jan. 31, arguing that pushing obligations later could create a cash-flow “gap” that independent, farmer-backed plants can’t survive.

— Greer hails 2025 as ‘year of the tariff,’ says Trump trade strategy is driving re-industrialization — USTR Jamieson Greer touts tariffs as the catalyst for deficit reduction and a manufacturing rebound (rare earth magnets, ship orders, pharma/auto/foundry activity), while acknowledging the strategy is disruptive and re-industrialization requires follow-through on energy, tax, workforce, and regulation.

— U.S. trade gains are real — but farmers say the ‘critical mass’ case is still unproven — USDA points to higher FY25 export volumes and “15+ deals,” but producers/economists say much of the gain is rebound off weak comps, “deals” often aren’t enforceable market access, and the need for new farm aid undercuts claims of a durable trade-driven turnaround.

— Bessent’s ‘soybean farmer’ claim unravels after delayed ethics sale — USA Today details how Treasury Secretary Scott Bessent’s late divestment of North Dakota farmland reignited ethics scrutiny and amplified criticism that he was an investor, not an operator—especially given his proximity to China trade talks tied to soy demand.

— When will USDA release farmer payment rates for the Farmer Bridge Assistance program? — Conflicting USDA timelines (end of month vs. “around” Dec. 22/that week) keep producers guessing on when crop-by-crop FBA rates will drop, complicating cash-flow planning and expectations for near-term assistance.

— Republicans tease record tax refunds as 2025 relief flows through filing season — Hassett and other Republicans are selling “bigger refunds” as proof of affordability relief, with the key mechanics being new 2025 deductions and unchanged IRS withholding tables that could delay benefits into filing season.

— EPA, Army close WOTUS listening tour as agencies move toward Sackett-aligned rule — Agencies wrap public sessions and aim for a narrower, Sackett-based definition by early 2026, with stakeholders broadly demanding clarity and durability; written comments run through Jan. 5.

— FDA finds U.S. food supply largely compliant in annual pesticide residue review — FDA’s FY2023 monitoring report says most domestic foods meet tolerances (imports show higher violation rates), and the agency launches a public dashboard to make residue findings easier to explore.

— Tuesday: Oil prices stall after Monday’s surge as oversupply caps gains — Crude consolidates as Venezuela/Black Sea risk headlines support sentiment, but ample inventories and floating storage keep a lid on prices during holiday-thin trade.

— Monday: Oil jumps as Venezuela enforcement and Black Sea risks rekindle geopolitical premium — Prices pop on U.S. interdictions tied to Venezuela sanctions and renewed Russia/Ukraine maritime disruptions, even as analysts warn fundamentals still point to a well-supplied early-2026 market.

— Report: MTBE phase-out — not RFS2 — was the real trigger for the U.S. ethanol boom — Scott Irwin’s farmdoc analysis argues investment decisions for the 2004–11 ethanol buildout align more with MTBE bans/liability-driven fuel reform than with RFS2 mandates, reframing today’s waiver debates and what really “binds” ethanol demand.

— U.S. national security concerns stall East Coast wind projects as Indonesia doubles down on palm-based fuel mandates — Interior pauses major offshore wind leases over classified national-security concerns, detonating permitting-reform talks as Senate Democrats walk away.

— Indonesia, U.S. clear final hurdles for tariff deal ahead of Trump/Prabowo signing — Negotiators say a reciprocal tariff deal is essentially done, pairing U.S. access to critical minerals with Indonesian tariff relief for palm oil/coffee/tea, with leaders targeting a late-January signing.

— U.S. presses EU to confine retaliation to Spain in WTO olive dispute — Washington argues any EU retaliation authorized in the ripe-olives case must be Spain-limited because the calculated harm was Spain-specific, warning broader EU-wide tariffs would breach proportionality rules.

— FMC confirms Spain barred U.S. ships, opens door to possible retaliatory maritime actions — FMC says Spain’s Israel-cargo-linked port denials persist and asks stakeholders for evidence/impacts as it weighs remedies ranging from fees to voyage restrictions, raising fresh risk for exporters and carriers.

— Democrats’ real autopsy problem isn’t 2024 — it’s 2021 — Charlie Cook argues Democrats’ defeat was baked in by early Biden-era governing choices made under razor-thin majorities, and says shelving a formal post-election review signals avoidance rather than strategy.

— NWS outlook — High-risk excessive rainfall targets parts of Southern California Wednesday, with significant snow risk in the Northeast and mixed precip potential across parts of Pennsylvania and the Great Lakes.

Updates: Policy/News/Markets, Dec. 23, 2025

TOP STORIES —Holiday order compresses data calendar, thins year-end tradingFederal closures shift economic releases while markets brace for light volume around ChristmasPresident Donald Trump signed an order designating Dec. 24 and Dec. 26 as federal government holidays, tightening the window for economic data releases at the start of the week and prompting agencies to adjust schedules.The compressed calendar has led USDA to revise plans for releasing its delayed weekly Export Sales reports. Weekly Jobless Claims, however, remain scheduled for release on Dec. 24 despite the federal shutdown.Although federal offices will be closed from Dec. 24 through Dec. 26, banks will operate on both Dec. 24 and Dec. 26, and the U.S. Postal Service will continue mail delivery on those days. Financial markets will observe shortened hours on Thursday, with most closing at noon or shortly thereafter, while the bond market is set to close at 1 p.m. CT.Markets and federal offices will be fully closed on Christmas Day. Trading will resume on Dec. 26 at normal hours, though volumes are expected to be extremely light as the extended holiday period winds down.—U.S. economy grew at its fastest pace in two years this summer. New data from the Commerce Department on Tuesday — delayed by two months because of the government shutdown — showed that gross domestic product grew at an annualized rate of 4.3 percent between July and September driven mainly by consumer spending and a rise in net exports, as U.S. companies sold more industrial supplies, pharmaceuticals and gold abroad. The tally was ahead of the second-quarter rate of 3.8%. The data show the economy growing at an average annual rate of 2.5% since Trump returned to office, even after a first-quarter contraction as companies ramped up imports to get ahead of new tariffs. The growth is on par with the 2.4% average pace recorded in 2024, during the Biden presidency. President Trump says tariffs “are responsible for the GREAT USA Economic Numbers JUST ANNOUNCED…AND THEY WILL ONLY GET BETTER!”Details and analysis of report in Financial Markets section below.—Iowa Biodiesel Board warns EPA delay could imperil farmer-owned plantsIndustry group urges final Renewable Fuel Standard rule by Jan. 31, citing mounting financial strain on independent biodiesel producers The Iowa Biodiesel Board is pressing EPA to finalize the 2026–2027 Renewable Fuel Standard (RFS) rule by Jan. 31, warning that further delays could threaten the survival of Iowa’s independent, farmer-owned biodiesel plants. According to the board, EPA has indicated that postponing the rule into February or March would push compliance obligations to June, creating what the group describes as a potentially “catastrophic gap” for smaller producers. Grant Kimberley, executive director of the Iowa Biodiesel Board, said independent plants lack the financial reserves of larger competitors and are increasingly vulnerable to prolonged regulatory uncertainty. Kimberley said facilities represent years of farmer investment aimed at diversifying income streams and reducing reliance on volatile export markets, including China. He warned that continued delays could permanently dismantle farmer-owned energy infrastructure that would be difficult, if not impossible, to rebuild. Iowa currently has eight operating biodiesel plants, three of which are classified as independent and largely farmer owned. The board noted that biodiesel accounts for roughly 10% of the value of every bushel of soybeans grown in the United States, underscoring the sector’s importance as farmers make planting decisions for the upcoming season. The Iowa Biodiesel Board concluded that swift EPA action is essential to protect farmer investments and preserve biodiesel’s role in agricultural and energy diversification, stressing that the Jan. 31 deadline is becoming increasingly urgent. —Greer hails 2025 as ‘year of the tariff,’ says Trump trade strategy is driving re-industrializationUSTR Jamieson Greer argues tariffs are cutting deficits, lifting wages and jump-starting U.S. manufacturing despite critics calling the approach disruptive  U.S. Trade Representative (USTR) Jamieson Greer says President Donald Trump’s first year of his second term will be remembered as the “year of the tariff,” crediting aggressive trade actions with reviving American manufacturing and strengthening the broader economy. In an op-ed published by the Financial Times and the Office of the United States Trade Representative, Greer lays out how the administration measures success: faster growth, lower trade deficits, rising real wages and a larger manufacturing footprint. He points to 3.8% GDP growth in the second quarter, a core inflation rate of 2.7% — the lowest in five years — and a roughly 25% year-over-year decline in the U.S. goods trade deficit with China. Greer argues that while rebuilding industrial capacity will take time, tangible signs are already emerging. He cites the first North American production of rare-earth magnets in 25 years, new commercial ship orders at the Philadelphia Shipyard — including LNG carriers not built domestically in decades—along with revived foundries, new pharmaceutical facilities and returning auto production lines. Acknowledging critics who view the rollout as rocky, Greer counters that tariffs were essential to catalyze new investment. He concludes that re-industrialization depends not only on trade policy but also on technology, workforce development, regulatory reform, tax policy and energy strategy — areas he says remain central priorities for the Trump administration. —U.S. trade gains are real — but farmers say the ‘critical mass’ case is still unprovenUSDA officials cite rising exports and new trade deals as evidence the Trump administration’s strategy is paying off, but producers and ag economists say the benefits remain uneven, fragile, and insufficient to offset trade-driven risk  Senior Trump administration officials are leaning into new export data as evidence that the president’s trade strategy is beginning to deliver tangible gains for U.S. agriculture. But while the numbers cited by USDA are largely accurate, farmers and agribusiness leaders caution that the broader narrative overstates how much has changed on the ground. Undersecretary for Trade and Foreign Agricultural Affairs Luke Lindberg said in a Dec. 18 interview with the Red River Farm Network that the administration has reached a “critical mass” of trade deals that is helping drive a surge in agricultural exports and diversify markets for U.S. producers. “We have reached a critical mass of deals,” Lindberg said, arguing that new agreements with more than 15 countries are expanding export opportunities and putting dollars back into rural America. USDA export data lend partial support to the claim. Lindberg pointed to fiscal year (FY) 2025 figures showing ethanol exports up 11%, dairy exports up 15%, and corn exports up 29%. USDA Secretary Brooke Rollins echoed that message in a Dec. 15 post, saying the “America First trade agenda is putting points on the board” and that total ag exports rose during FY 2025. Accurate figures — incomplete picture. Most farm economists agree the export figures are broadly correct. Corn shipments, in particular, rebounded sharply after a weak prior year, while ethanol and dairy benefited from strong overseas demand and favorable policy alignment in key markets. But producers note that the gains must be viewed in context. Much of the growth reflects recovery from depressed prior-year volumes rather than a structural shift in global demand. Adjusted for inflation, total U.S. agricultural exports remain below late-2010s peaks, and global competition — particularly from Brazil and the Black Sea region — continues to cap pricing power. “Exports are up, but that doesn’t automatically mean incomes are,” said one Midwest grain producer. “They’re keeping things from getting worse — not making things great.” ‘Deals’ versus durable market access. The sharpest skepticism centers on Lindberg’s claim that a “critical mass” of trade deals has been reached. Farmers and exporters consistently distinguish between political agreements and binding, enforceable market access. Many of the administration’s announced deals involve frameworks, memoranda of understanding, or incremental tariff adjustments rather than guaranteed volumes or quota expansions. While these arrangements can open doors, producers say they do not ensure contracts or sustained demand. “We don’t get paid on leverage,” said one export manager. “We get paid when product moves and checks clear.” USDA officials argue that aggressive follow-up — including trade missions and buyer introductions — is turning agreements into sales. But in farm country, confidence remains cautious, especially for commodities like soybeans and cotton that still depend heavily on China. Diversification: progress, but limits. Diversification is a central theme of the administration’s trade message, and there is evidence of progress. Southeast Asia, parts of Latin America, and Middle Eastern markets have absorbed more U.S. ethanol, dairy, and feed ingredients. Still, producers note that no combination of smaller markets has replaced the scale of China for major row crops. Africa and South Asia are frequently cited as growth opportunities, but logistical hurdles, price sensitivity, and regulatory barriers continue to limit near-term impact. Aid underscores lingering stress. Questions about trade success are reinforced by the administration’s reliance on emergency assistance. USDA recently announced $12 billion in farm aid, including $11 billion for row crops and $1 billion to be divided among specialty crop and sugar producers. Lindberg acknowledged the package reflects budget constraints rather than a full accounting of farm losses, deferring to Congress on whether additional funding is needed. Specialty crop groups have already voiced frustration at being excluded from the initial tranche, warning that the remaining funds will pit commodities against one another. For many farmers, the aid package underscores a central tension: if trade deals are delivering sustained income growth, why does agriculture still require large-scale bailout programs? The Bottom Line: Among producers and ag economists, the prevailing view is neither dismissal nor endorsement of the administration’s claims. Export gains are real, and new trade engagement is welcomed. But most see the current moment as stabilization, not transformation. The Trump administration may be winning tactical skirmishes in global trade, farmers say — but the strategic test remains whether those gains can translate into durable prices, reduced volatility, and less dependence on emergency aid. Until then, the “critical mass” case remains, in their view, a work in progress.—Bessent’s ‘soybean farmer’ claim unravels after delayed ethics saleTreasury secretary completes $12.4 million divestment months after deadline, drawing renewed scrutiny over ethics compliance Treasury Secretary Scott Bessent is no longer connected to a soybean operation, after finally divesting farmland holdings that had fueled controversy over his repeated claims of being a farmer and his compliance with federal ethics rules. According to USA Today, Bessent disclosed that he sold several thousand acres of North Dakota farmland for about $12.4 million, ending an ownership stake he held through a limited liability partnership. The sale came months after he was required to divest under his ethics agreement with the Trump administration. The issue gained national attention after Bessent said during an October interview that he was “actually a soybean farmer,” a remark that triggered widespread ridicule and online memes questioning the authenticity of the claim. While Bessent did own farmland, disclosures showed he was an investor rather than an operator, with family members and partners involved in day-to-day work. Ethics concerns intensified in August, when government ethics officials notified the Senate Finance Committee that Bessent had missed his April 28 divestment deadline. Treasury ethics staff cited the illiquid nature of the farmland but acknowledged he would be recused from matters directly affecting those assets — a safeguard critics said was insufficient. That explanation drew sharper scrutiny after Bessent participated in trade discussions with Chinese counterparts that included commitments to purchase U.S. soybeans, placing him near policy decisions closely tied to the asset he still owned at the time. Bessent confirmed in early December that the sale had finally been completed, saying he was “out of that business” and emphasizing that the divestment fulfilled his ethics obligations. Democrats were unconvinced. Senate Finance Committee Chairman Ron Wyden (R-Ore.) criticized the delay, arguing that ethics agreements are meant to demonstrate that senior officials put public interest ahead of personal financial stakes. Wyden said the episode underscored broader concerns about ethics enforcement within the administration. —When will USDA release farmer payment rates for the Farmer Bridge Assistance (FBA) program?Take your pick because remarks from USDA vary USDA Statements on Farmer Bridge Assistance (FBA) Payment-Rate TimingSourceDateSpeaker / DocumentExact Language on TimingImplied Release TimingUSDA Press ReleaseDec. 8, 2025USDA (official statement)“USDA will release commodity-specific payment rates by the end of the month.”By Dec. 31, 2025Press interview Dec. 17, 2025Richard Fordyce, Under Secretary for Farm Production and Conservation“So, we will be announcing, by crop, the payment rate by crop around Monday, December 22.”Around Dec. 22, 2025Radio/press coverage Dec. 17, 2025Richard Fordyce“We have formulas that are setting the payment rates for the individual crops, but we have to know what that universe is… in order to fine tune those payment rates.” (rates expected “next week”)Week of Dec. 22, 2025 —Republicans tease record tax refunds as 2025 relief flows through filing seasonKevin Hassett says Americans will see unusually large refund checks next year as new deductions kick in and IRS withholding tables remain unchanged Top Republicans are leaning into the promise of bigger tax refunds as they push back against criticism that the Trump administration is dismissive of voters’ cost-of-living concerns. “You’re going to see the biggest tax refund season of all time,” Kevin Hassett, director of the National Economic Council, said Sunday on Fox News, arguing that recently enacted tax relief will show up most clearly when Americans file returns in early 2026. The message has been echoed at the highest levels of the White House. Donald Trump made a similar case in a nationally televised address last week, framing refunds as tangible proof that his economic agenda is putting money back in household budgets even as inflation remains a political vulnerability. Why refunds could surge. The optimism is rooted in the sweeping tax provisions Republicans enacted in this summer’s megabill, which included more than half a dozen changes scheduled to take effect for the 2025 tax year. Among them:• A larger standard deduction• New deductions for tipped income• New deductions for overtime pay• Expanded deductions targeted at seniors Crucially, the IRS chose not to update withholding tables after the legislation passed July 4. As a result, many workers will continue to have taxes withheld at pre-change levels throughout 2025, even though their final tax liability will be lower under the new law. That mismatch typically translates into larger refunds at filing time — effectively delaying the delivery of tax relief until returns are processed rather than boosting paychecks immediately. Politics of refunds vs. paychecks. Republicans are betting that eye-catching refund checks will resonate with voters who remain skeptical about claims that the economy is improving. Larger refunds offer a simple, visible metric that can be pointed to on the campaign trail. Democrats, however, are expected to counter that refunds reflect over-withholding rather than real-time relief — and that households might prefer higher take-home pay throughout the year instead of a one-time lump sum. Still, if refund amounts spike as anticipated, the filing season that begins early next year could become a central talking point in the broader debate over affordability, tax policy, and who is delivering meaningful relief to middle- and working-class taxpayers.

FINANCIAL MARKETS

 —Equities today: Bond yields initially spiked after third-quarter U.S. gross domestic product growth clocked in well ahead of expectations (see item below). Inflation-adjusted GDP grew at an annualized rate of 4.3% from July through September, the Bureau of Economic Analysis said. That was well above the consensus estimate among economists polled by FactSet at 3%. Though the report presented a largely positive view of the economy, markets reacted little as the data is backward-looking. The Dow opened around 80 points lower while Treasury yields held higher. In Asia, Japan flat. Hong Kong -0.1%. China +0.1%. India -0.1%. In Europe, at midday, London flat. Paris -0.2%. Frankfurt +0.1%.

—Equities yesterday: 

Equity Index	Closing Price  Dec. 22	Point Difference  from Dec. 19	% Difference  from Dec. 19
Dow	48,362.68	+227.79	+0.47%
Nasdaq	23,428.83	+121.21	+0.52%
S&P 500	6,878.49	+43.99	+0.64%

—U.S. growth of 4.3% in Q3 surprises and upends recession fears

Third-quarter GDP jump underscores consumer resilience and complicates the Federal Reserve’s path

The U.S. economy expanded at a 4.3% annualized rate in the third quarter, dramatically outperforming economists’ expectations and reinforcing evidence that growth momentum remained strong well into the second half of the year.

The headline figure, released in official government data, reflects a surge in consumer spending, which remained the dominant engine of growth despite elevated interest rates. Households continued to spend aggressively on services, travel, and discretionary goods, offsetting headwinds from tighter credit conditions and lingering inflation pressures.

Why the number matters

•Far above consensus: Economists had expected solid but moderating growth. A 4.3% pace challenges the prevailing narrative that higher borrowing costs were already biting hard enough to slow activity materially.

•Policy implications: The strength of the data complicates the Federal Reserve’s calculus. Robust growth gives policymakers less urgency to cut rates quickly, particularly if inflation remains sticky.

•Labor market backdrop: The Financial Times notes that resilient hiring and wage growth helped underpin consumption, reinforcing the economy’s ability to absorb higher rates — at least for now.

What’s beneath the surface. While the topline growth rate was eye-catching, the FT cautions that some components may prove temporary. Inventory accumulation and government outlays contributed to growth, and questions remain about whether consumer spending can stay this strong as excess savings fade and credit conditions remain tight.

Still, the report underscores a central theme of 2025: the U.S. economy has repeatedly defied forecasts of an imminent slowdown, forcing economists and policymakers alike to reassess how restrictive financial conditions really are — and how long elevated rates may need to remain in place.

—FDA clears first oral GLP-1 weight-loss drug

Novo Nordisk says pill version of Wegovy matches injections on efficacy, set to launch in January at $149 a month

The Food and Drug Administration on Monday approved a pill version of Wegovy, giving Novo Nordisk the first oral GLP-1 weight-loss medication to reach the U.S. market. The drug is slated to launch in early January and will be priced at $149 per month. Novo Nordisk CEO Mike Doustdar said the pill can deliver weight loss comparable to the injectable version of Wegovy. Investors welcomed the announcement, sending the company’s shares sharply higher in after-hours trading.

—Miran warns Fed risks over-tightening as labor market softens

Outgoing governor says failure to keep easing policy could tip the economy toward recession, even as inflation concerns persist

Federal Reserve Governor Stephen Miran warned that the U.S. central bank risks pushing the economy into recession if it does not continue cutting interest rates next year, arguing that recent labor-market data point toward the need for a more accommodative stance.

Speaking in a Bloomberg Television interview, Miran said that while he does not expect an immediate downturn, the balance of risks is shifting. “If we don’t adjust policy down, then I think that we do run risks,” Miran said, according to Bloomberg, pointing to signs that unemployment is rising faster than many policymakers anticipated.

He added that recent data should nudge officials toward a more dovish posture. “The unemployment rate has poked up potentially above where people thought it was going to go,” Miran said, emphasizing that labor-market softness strengthens the case for additional rate cuts.

Since September, the Federal Reserve System has lowered rates three times, for a total of 75 basis points. Miran said that pace reduces the urgency for another half-point cut at the next meeting, though he has not ruled out further easing. “You sort of get into territory where you can start micromanaging instead of big cuts,” he told Bloomberg, adding that it may still take “a couple more cuts” to reach that stage.

His comments come amid a widening policy split within the Fed. While rates were trimmed by a quarter-point this month, most officials currently project only one additional cut next year, with several regional presidents stressing that inflation remains nearly a full percentage point above the Fed’s 2% target. At the same time, rising unemployment is intensifying concern that holding rates too high for too long could trigger a sharper economic slowdown.

Miran, whose term ends in January, has consistently argued for more aggressive easing since joining the Board of Governors in September, positioning himself as one of the Fed’s more vocal advocates for guarding against an unnecessary recession.

AG MARKETS

—More U.S. sorghum, soybean and cotton export sales to China in latest weekly data. USDA’s weekly Export Sales report for the week ended Dec. 11 showed rising activity for China for 2025/26 including net sales of 69,567 metric tons of sorghum, net sales of 1,383,046 metric tons of soybeans (668,000 metric tons were know via daily sales announcements), and 88,919 running bales of upland cotton. Some of the exports have also started to move to China with the report noting exports of 69,567 metric tons of sorghum, 202,046 metric tons of soybeans, and 10,700  running bales of upland cotton. For pork and beef, there were net sales of 26 metric tons of beef (all shipped for the week) and 4,360 metric tons of pork with 3,010 metric tons exported. However, there were cancellations of 1,966 metric tons of pork for 2026 which brings the outstanding sales for 2026 down to 3,768 metric tons. With the sales in this report and daily sales since Dec. 11, that brings total U.S. soybean export commitments to China to 6,071,015 metric tons.

—Indonesia sets 2026 palm biodiesel allocation as it prepares for B50 jump

New decree marginally raises biodiesel volumes while signaling tighter palm oil supply controls ahead of a potential 50% diesel blend mandate

Indonesia has signed a decree allocating 15.65 million kiloliters (KL) of palm-based biodiesel for its 2026 fuel-blending mandate, slightly above the 15.6 million KL set for 2025, according to Reuters citing ministry officials.

Under the decree from the Indonesia Energy and Mineral Resources Ministry, 7.45 million KL will be directed to public service obligation (PSO) uses, including subsidized fuel sales and public transportation, funded in part through the palm oil levy system. The remaining 8.20 million KL is designated for non-PSO commercial markets.

Indonesia currently enforces a B40 mandate — requiring diesel to contain 40% palm-based biodiesel — but is actively preparing to move to B50, likely in the second half of 2026. Testing of the B50 blend began earlier this month and is expected to run for about six months.

According to estimates from APROBI, a full shift to B50 could require up to 19 million KL of palm-based fuel annually, well above current allocation levels. Reuters reports that, to safeguard domestic supplies, Indonesia may ultimately regulate crude palm oil exports, a step that could have ripple effects across global vegetable oil and biofuel markets.

—Agriculture markets yesterday:

Commodity	Contract Month	Close  Dec. 22	Change vs  Dec. 19
Corn	March	$4.47	+3 1/4¢
Soybeans	January	$10.53 1/4	+4¢
Soybean Meal	January	$298.30	+$1.00
Soybean Oil	January	48.55¢	+65 pts
Wheat (SRW)	March	$5.15 1/2	+5 3/4¢
Wheat (HRW)	March	$5.21 1/4	+6¢
Spring Wheat	March	$5.80	+2¢
Cotton	March	63.61¢	-14 pts
Live Cattle	February	$231.425	+62 1/2¢
Feeder Cattle	January	$346.50	+90¢
Lean Hogs	February	$85.35	+85¢

WOTUS

—EPA, Army close WOTUS listening tour as agencies move toward Sackett-aligned rule

Public sessions highlight demand for regulatory clarity as regulators push to finalize a narrower Clean Water Act definition by early 2026

The Environmental Protection Agency and U.S. Department of the Army have wrapped up a series of public listening sessions on their proposed revision to the definition of “waters of the United States” (WOTUS), a key term governing Clean Water Act permitting. The sessions — held in Bismarck, North Dakota; Pittsburgh, Pennsylvania; and online — drew input from a broad cross-section of stakeholders, including farmers, ranchers, builders, energy producers, manufacturers, states, Tribes, environmental groups, and municipal stormwater officials.

Across those discussions, agency officials said a consistent theme emerged: stakeholders want a durable, clear rule that reduces uncertainty while still protecting water quality.

EPA officials emphasized that the revised WOTUS proposal is intended to fully implement the Supreme Court’s Sackett decision, replacing what the Trump administration characterizes as an overly broad 2023 Biden-era definition. The agencies argue the new approach would narrow federal jurisdiction, reduce permitting burdens and costs, and provide clearer lines for landowners and businesses — particularly in agriculture, construction, and energy development.

Army Civil Works leadership framed the effort as part of President Donald Trump’s broader deregulatory agenda, saying the rule aims to cut red tape, speed infrastructure projects, and remove what they described as regulatory obstacles that have slowed economic activity.

Written public comments on the proposed WOTUS definition will remain open through Jan. 5, 2026. EPA and the Army say they will review the submissions and move “expeditiously” toward a final rule intended to provide long-term regulatory certainty while maintaining core water protections.

PESTICIDE RESIDUE

—FDA finds U.S. food supply largely compliant in annual pesticide residue review

New FY 2023 report and interactive dashboard show most domestic and imported foods meet EPA safety limits, with violations concentrated in imports

The Food and Drug Administration has released its Pesticide Residue Monitoring Program Report for Fiscal Year 2023, concluding that pesticide residue levels in the U.S. food supply are generally in compliance with federal safety standards.

Covering testing conducted from Oct. 1, 2022, through Sept. 30, 2023, the report summarizes FDA analysis of human and animal foods for 781 pesticides and selected industrial compounds. Alongside the report, FDA launched a new Pesticide Report Data Dashboard, allowing the public to interact with tables, figures, and underlying data as part of the agency’s transparency push in food chemical safety oversight.

Key findings: Human foods

• 3,577 total samples tested, including 1,003 domestic samples from 45 states and 2,574 import samples from 84 countries/economies.

• No residues detected in 39% of domestic samples and 39.2% of import samples.

• Compliance rates:

• 97.2% of domestic foods met federal requirements.
• 86.5% of imported foods met federal requirements.

• Import foods continued to show higher violation rates than domestic products, reinforcing FDA’s risk-based targeting of imports more likely to contain violative residues.

Key findings: Animal foods

• 224 total samples tested, including 101 domestic samples from 23 states and 123 import samples from 14 countries.

• Compliance exceeded 97% for both domestic and imported animal foods.

• No residues detected in 50.5% of domestic and 56.1% of imported animal food samples.

Focused domestic sampling. FDA also conducted targeted testing of domestically produced animal-derived foods, analyzing 95 samples of milk, shell eggs, honey, and game meat.

• No violative pesticide residues were found.

• 87.4% of samples contained no detectable residues at all.

Under federal law, food producers must comply with pesticide tolerances — maximum residue levels — set by the EPA. FDA said it may take regulatory action when residues exceed those limits or involve chemicals without established tolerances.

Overall, FDA said the FY 2023 results support its conclusion that U.S. food remains safe with respect to pesticide residues, while continuing to justify enhanced scrutiny of higher risk imported products.

ENERGY MARKETS & POLICY

—Tuesday: Oil prices stall after Monday’s surge as oversupply caps gains

Venezuelan seizure headlines and Ukraine/Russia disruptions buoy sentiment, but high inventories and floating storage limit upside

Oil prices were little changed Tuesday, consolidating after a sharp rally the previous session as competing forces kept markets in check. Brent crude edged up 7 cents to $62.14 a barrel, while U.S. West Texas Intermediate gained 4 cents to $58.05.

Monday’s more than 2% jump — Brent’s biggest daily gain in two months and WTI’s strongest since mid-November — was driven by geopolitical risks, including Ukrainian attacks on Russian vessels and port infrastructure that raised fears of supply disruptions.

Those concerns, however, were offset by persistent oversupply. Some analysts note that heavy inventories and floating storage — now at their highest levels since 2020 — are capping further gains, particularly during a thinly traded holiday week.

Markets also weighed comments from Donald Trump, who said the U.S. may keep or sell Venezuelan crude seized in recent weeks as part of a broader effort to enforce sanctions, including what he described as a tanker “blockade.”

Looking ahead, analysts signal oil markets should remain well supplied in the first half of 2026. However,any prolonged geopolitical disruption could still tighten the market.

—Monday: Oil jumps as Venezuela enforcement and Black Sea risks rekindle geopolitical premium

U.S. tanker interdictions near Venezuela and renewed Russia/Ukraine disruptions push crude prices higher despite thin holiday trading and soft fundamentals

Oil prices settled sharply higher Monday as geopolitical risks re-entered the spotlight, offsetting otherwise weakening fundamentals. Brent crude rose $1.60, 2.7%, to $62.07 a barrel, while U.S. benchmark WTI gained $1.49, 2.6%, to $58.01.

The rally was driven in part by U.S. enforcement actions against Venezuelan oil shipments. The Coast Guard’s attempted interception of a sanctioned tanker near Venezuela marked the third such action this month and followed Washington’s announcement of a broader blockade targeting sanctioned vessels. While Venezuela accounts for only about 1% of global supply, its exports — largely destined for China — have amplified geopolitical sensitivity and raised concerns about incremental supply disruptions.

Prices were also supported by renewed tensions tied to the Russia/Ukraine war. Ukrainian drone strikes reportedly damaged vessels and port infrastructure in Russia’s Krasnodar region near the Black Sea, a key corridor for Russian crude and refined-product exports, reinforcing risks to maritime energy flows.

Analysts cautioned that near-term gains may consolidate as holiday-thinned trading collides with soft demand and ample supply. Still, uncertainty surrounding Venezuela, Ukraine, and Russia continues to underpin a modest geopolitical risk premium, even as diplomatic talks proceed with no clear timetable for a breakthrough.

—Report: MTBE phase-out — not RFS2 — was the real trigger for the U.S. ethanol boom

New farmdoc daily analysis revisits the conventional wisdom on what drove ethanol plant construction, showing investment decisions were set in motion years before expanded federal mandates

The rapid expansion of U.S. ethanol production between 2004 and 2011 — when output nearly quadrupled from 3.4 billion to 13.3 billion gallons — is widely attributed to the Renewable Fuel Standard (RFS), particularly the expanded mandates enacted in 2007. But a new analysis argues that this explanation overlooks the true catalyst: the effective nationwide phase-out of MTBE as a gasoline additive in the early 2000s.

In a Dec. 22, 2025, farmdoc daily article (link), agricultural economist Scott Irwin of the University of Illinois revisits the timing of ethanol plant investment and finds that the conventional narrative confuses plant start-up dates with actual capital investment decisions.

Irwin shows that while ethanol plant openings accelerated after passage of RFS1 (2005) and RFS2 (2007), the bulk of investment commitments occurred earlier. When investment is defined using standard economic principles — capital expenditures made when ownership transfers and money is spent — ethanol plant investment typically took place roughly two years before a facility began operating.

Applying this adjustment dramatically alters the timeline. Investment in new ethanol plants surged following state-level MTBE bans between 2000 and 2003, with 44 new plants financed in the two years after those bans and another 50 after RFS1. By contrast, investment activity slowed sharply following RFS2, with far fewer plants and much less new capacity financed during that period.

Capacity data reinforce the conclusion. More than 3.5 billion gallons of new capacity were financed following MTBE bans and over 5 billion gallons after RFS1, while less than 2 billion gallons followed RFS2 once investment timing is properly accounted for. Ethanol blending rates also began rising years before federal mandates took effect, tracking closely with the MTBE phase-out rather than with RFS expansion.

The implication, Irwin argues, is that environmental regulation — not biofuel mandates — was the dominant driver of the ethanol boom. The fuel industry’s response to MTBE liability risks and its effective removal from gasoline markets forced ethanol adoption as an oxygenate and octane enhancer well before RFS2 raised statutory blending requirements.

This revised understanding carries important policy consequences. It undercuts claims that waiving RFS mandates during periods of high grain prices would meaningfully reduce ethanol demand or ease pressure on feed costs. If mandates were largely non-binding after the MTBE phase-out, suspending them would likely have limited market impact.

More broadly, Irwin’s analysis highlights the risks of misattributing causation in agricultural policy debates. Large market shifts often reflect investment decisions made years earlier, shaped by regulatory changes whose effects may only become visible later — a lesson with implications far beyond ethanol markets.

Perspective on Irwin’s Comments While accurate, Irwin’s claim can be over-interpreted if not framed properly. 1. RFS2 still mattered — just differently RFS2 did not cause the initial build-out, but it:• Locked in demand certainty after MTBE-driven adoption• Shifted ethanol from a discretionary blending solution to a compliance asset• Stabilized financing for surviving plants post-2008 In other words:• MTBE bans = ignition• RFS1 = acceleration• RFS2 = demand backstop, not growth engine 2. “Non-binding” mandates were conditional, not absolute Irwin is right that RFS mandates were often non-binding at the margin after MTBE exited. However:• That non-binding status depended on high oil prices, cheap corn, and infrastructure lock-in• In low-oil or high-corn scenarios, RFS volumes still influenced blending economics So the conclusion that waiving RFS would have limited impact is broadly true — but context-dependent, not universal. 3. Ethanol’s octane value mattered more than often acknowledged Beyond oxygenate needs, ethanol’s octane economics increasingly drove blending decisions after MTBE disappeared. This reinforces the idea that:• Ethanol demand became market-embedded, not mandate-dependent• RFS increasingly followed market behavior rather than dictating it Policy Implications: Why This Matters Now Irwin’s reframing has several important implications — especially relevant to current ag and biofuel debates: ✅ Waiver debates are often overstated Calls to waive RFS mandates during high grain-price periods frequently assume mandates are binding. Historically:• They often weren’t• Ethanol demand was already justified by fuel economics and refinery needs ✅ Environmental regulation can outperform commodity mandates The MTBE episode shows that:• Targeted environmental regulation (liability + bans) can induce massive private investment• Sometimes more effectively than explicit production mandates ✅ Misreading causality leads to poor policy design Attributing the ethanol boom solely to RFS2:• Overstates the power of mandates• Understates how quickly markets respond to regulatory risk This lesson applies well beyond ethanol — including fertilizer rules, SAF fuels, and climate-linked ag policy. Bottom Line: The MTBE phase-out was the primary catalyst for the U.S. ethanol investment boom. RFS2 did not create the boom, but it helped stabilize and institutionalize it. Policy debates that treat ethanol demand as mandate-driven miss the deeper market reality — one shaped by earlier environmental regulation, refinery economics, and sunk capital.

—U.S. national security concerns stall East Coast wind projects as Indonesia doubles down on palm-based fuel mandates

U.S. offshore wind pause triggers political fallout

The Department of the Interior announced it is pausing leases for all large-scale offshore wind projects, citing classified Department of Defense assessments that raise national security concerns. The freeze affects major East Coast projects including Vineyard Wind 1 (Massachusetts), Revolution Wind (Rhode Island/Connecticut), Coastal Virginia Offshore Wind, and New York’s Sunrise Wind and Empire Wind 1. Of those, Vineyard Wind has already begun delivering power to the grid, while the others remain under construction.

Interior Secretary Doug Burgum said the decision reflects “emerging national security risks,” pointing to evolving adversary technologies and vulnerabilities posed by large offshore installations near dense population centers along the East Coast.

The move immediately reverberated on Capitol Hill. Senate Democrats walked away from ongoing bipartisan talks on permitting reform, warning the decision could effectively kill the effort. Senate Environment and Public Works Committee Ranking Member Sheldon Whitehouse (D-R.I.) and Senate Energy and Natural Resources Committee Ranking Member Martin Heinrich (D-N.M.) said negotiations will not resume unless what they called “illegal attacks on fully permitted renewable energy projects” are reversed. Without Democratic participation, prospects for a permitting overhaul appear bleak.

TRADE POLICY

—Indonesia, U.S. clear final hurdles for tariff deal ahead of Trump/Prabowo signing

Agreement would grant U.S. access to Indonesia’s critical minerals while easing tariffs on palm oil, coffee, and tea, with leaders aiming to sign by late January.

Indonesia and the United States have resolved all major outstanding issues in negotiations over a reciprocal tariff agreement, clearing the way for a formal signing by Indonesian President Prabowo Subianto and President Donald Trump by the end of January, according to Indonesia’s chief negotiator.

Senior Economic Minister Airlangga Hartarto said talks in Washington with U.S. Trade Representative Jamieson Greer concluded successfully, despite earlier friction this month when negotiations appeared close to breaking down. Airlangga characterized those tensions as normal “dynamics” and said all substantive issues are now settled.

Under the draft deal, the United States would gain access to Indonesia’s critical minerals, while Indonesia would receive tariff exemptions for key exports including palm oil, tea, and coffee. Indonesia is the world’s largest palm oil exporter and a major supplier of robusta coffee, making the concessions economically significant.

Airlangga emphasized the agreement would not restrict Indonesia from pursuing trade deals with other countries and described it as “commercial and strategic” in nature, balancing market access for both sides. He also said there is no risk of Washington reimposing the higher 32% tariff threatened earlier in the year if the January signing is delayed, noting that the full draft text has already been agreed.

The deal is also expected to include cooperation on digital trade, technology, and national security, though few details have been released. Trump had imposed a 19% tariff on Indonesia in July — down from an earlier 32% threat — in exchange for Jakarta’s commitments to reduce trade barriers and increase purchases of U.S. goods.

From January through October, two-way trade totaled $36.2 billion, with Indonesia posting a $14.9 billion surplus. The United States is Indonesia’s second-largest export market.

—U.S. presses EU to confine retaliation to Spain in long-running WTO olive dispute

Washington argues any EU tariffs authorized in the ripe olives case must apply only to Spain, warning broader retaliation would violate WTO limits on proportional countermeasures 

The U.S. told a World Trade Organization (WTO) dispute panel that the European Union must limit any retaliatory tariffs to goods entering Spain, following a ruling that authorized up to $13.6 million in retaliation over U.S. countervailing duties on Spanish ripe olives.

The dispute dates back to 2018, when the Commerce Department imposed countervailing duties of roughly 30%–44% on Spanish ripe olives. A WTO panel found those duties inconsistent with WTO rules in 2021. Although the U.S. revised the measures, a compliance panel in 2024 concluded they still violated WTO obligations, prompting an arbitrator in October to authorize EU retaliation.

In remarks delivered last week at a WTO Dispute Settlement Body meeting, the U.S. sharply criticized the arbitrator’s methodology. While the EU brought the case as a single WTO member, the arbitrator calculated trade harm — known as “nullification and impairment” — only with respect to Spain, since the duties targeted Spanish exporters alone. The U.S. argued this approach necessarily limits any authorized retaliation to Spanish imports from the U.S., not the entire EU market.

Washington warned that if Brussels imposed tariffs across the bloc, or in member states other than Spain, it would exceed the level of harm calculated by the arbitrator and violate WTO rules requiring retaliation to be equivalent to the damage suffered. The U.S. pointed out that some EU countries, such as Greece, actually increased olive exports to the U.S. after the duties were imposed, benefiting rather than suffering harm.

The EU did not directly address the U.S. argument at the meeting but welcomed the arbitrator’s ruling and reiterated calls for the U.S. to bring its measures into full compliance. Brussels also signaled it remains open to negotiations to resolve the dispute and provide relief to Spanish olive exporters affected by the duties.

—FMC confirms Spain barred U.S. ships, opens door to possible retaliatory maritime actions

Commission seeks industry input on port denials tied to Israel cargoes as investigation moves toward potential remedies

The Federal Maritime Commission (FMC) says it has confirmed that Spain barred several U.S.-linked vessels from entering its ports last year and is now soliciting public comments as part of a formal investigation that could result in retaliatory measures against Spanish shipping. In a Dec. 19 statement, the FMC said it verified reports that Spain denied port access to at least three ships sailing from the United States and that “the policy behind those refusals remains in place.” Spanish authorities previously said the ships were denied entry over suspicions they were carrying military supplies destined for Israel.

The commission is now seeking stakeholder input on Spain’s “current policy of denying or refusing port access to certain vessels carrying cargo bound for or coming from Israel,” how that policy is enforced, and its broader impact on U.S. foreign trade shipping conditions.

In a Federal Register notice published Monday (link), the FMC asked whether Spain is creating “general or special conditions unfavorable to shipping in foreign trade” and what “remedial actions” should be considered if that standard is met. Comments are due by Feb. 20.

Specifically, the FMC is requesting information on additional cases of port refusals, the Spanish government’s rationale, and the operational impacts on vessel routing, schedules, cargo transfers, and overall maritime commerce.

Under U.S. shipping law, the FMC has wide authority to respond, including restricting voyages to or from U.S. ports, limiting cargo, or imposing per-voyage fees. The commission said fines on Spanish-flagged vessels could reach as much as $2.3 million per voyage.

The notice also states that the FMC could ask the Department of Homeland Security to deny entry or clearance to vessels, collect imposed fees, or detain ships preparing to depart U.S. ports.

The investigation adds another layer of geopolitical risk for maritime trade tied to Spain and Israel-related cargo flows, with potential spillover effects for U.S. exporters and global shipping routes if the FMC ultimately moves toward enforcement.

POLITICS & ELECTIONS

—Democrats’ real autopsy problem isn’t 2024 — it’s 2021

Charlie Cook argues Democrats misread a razor-thin 2020 victory as a governing mandate, setting in motion political decisions that doomed them years before the last campaign even began 

In a sharply critical post-election analysis, veteran political analyst Charlie Cook contends that Democrats are asking the wrong questions about their 2024 defeat — and compounding the mistake by burying the party’s official autopsy.

Cook opens by skewering Democratic National Committee Chair Ken Martin for shelving a post-election review based on more than 300 interviews across all 50 states. The decision, Cook argues, appears less about electoral strategy and more about shielding party leaders from accountability, a move unlikely to reassure skeptical donors or rank-and-file Democrats.

But the deeper failure, Cook writes, is analytical. A serious autopsy would not dwell on tactical errors in 2024 or whether Kamala Harris had enough time to run a campaign. Instead, it would focus on the first nine months of the Joe Biden presidency — when Democrats badly overread their 2020 victory and governed as if they had won a landslide.

Cook underscores how narrow that victory actually was: fewer than 43,000 votes across Georgia, Arizona, and Wisconsin determined the outcome. Democrats also held Congress by the thinnest of margins — a 50-50 Senate dependent on the vice president’s tie-breaking vote and a slim House majority. In that context, Cook argues, sweeping policy ambitions were politically reckless.

The result was a rapid collapse in Biden’s approval ratings amid voter backlash over inflation, border policy, and the Afghanistan withdrawal. Once inflation surged to 40-year highs and the cost of living jumped roughly 25 percent over Biden’s term, Cook says, the presidency was effectively “dead” politically — long before the 2024 race began.

Cook dismisses the idea that a different nominee, demographic profile, or campaign team would have altered the outcome. Any Democrat tied to the Biden administration, he argues, would have been “guilty by association,” especially after voters had already rejected Donald Trump once and then turned back to him less than four years later.

The central lesson, Cook concludes, is not about messaging or mechanics but about governing humility. In an era of razor-thin majorities and entrenched polarization, parties that mistake narrow wins for sweeping mandates risk sowing the seeds of their own defeat. Whether Democrats internalize that lesson the next time they hold power — particularly if they regain the House — remains the unanswered question.

WEATHER

— NWS outlook: There is a High Risk of excessive rainfall over parts of Southern

California on Wednesday… …Moderate to heavy snow over the Northeast… …Rain/freezing rain possible over the Pennsylvania and Great Lakes.