Treasury/IRS Slow Walk on 45Z Guidance Creates Uncertainty for 2025 and Beyond

U.S. soybean market 2025, outlook for 2026: Big supplies, choppy demand — and biofuels took the wheel | Bioceanic Railway takes shape as China and Brazil push $18.5b Atlantic-Pacific link

LINKS

Link: Outlook: Brazil’s Farm Boom is Rewriting Global Grain Trade —
          and Squeezing U.S. Export Share

Link: Video: Wiesemeyer’s Perspectives, Dec. 27
Link: Audio: Wiesemeyer’s Perspectives, Dec. 27
 

Updates: Policy/News/Markets, Dec. 29, 2025

UP FRONT

 TOP STORIES

— Economic calendar of reports this week: A holiday-shortened stretch with housing (Pending Home Sales), regional activity reads (Dallas Fed, Chicago PMI), key home-price gauges (Case-Shiller, FHFA), and an early read on labor-market steadiness via weekly jobless claims and FOMC minutes.

— Calendar of ag reports this week: A dense run of USDA/CFTC updates led by Export Inspections/Export Sales, COT positioning, Slaughter Weekly, broiler hatchery, and price/production snapshots for peanuts, eggs, cotton/wool, and broader ag prices — plus Friday delays into Jan. 5 for some reports.

— Calendar of energy reports for this week: Markets track inventory and supply signals via EIA petroleum/natural gas and ethanol production, API stocks, Baker Hughes rigs, ICE positioning data, and multiple contract expirations — complicated by holiday closures and delayed ICE COT to Jan. 5.

— Bomb cyclone bears down on post-holiday travel: A rapidly intensifying storm threatens widespread disruption — blizzard conditions and power risks in the Upper Midwest/Great Lakes, freezing rain hazards in New England, severe storms followed by an Arctic plunge across the South/Central U.S., and easing conditions in the West after an atmospheric-river stretch.

— Western states push for emergency fuel stockpile beyond crude oil: Sen. John Curtis’ (R-Utah) proposal would create a 10-million-barrel refined-fuel reserve (gasoline/diesel/jet) west of the Rockies, arguing the crude-only SPR is ill-suited for Western supply constraints and rapid crisis scenarios.

FINANCIAL MARKETS

— Equities today: Futures modestly lower amid thin year-end trade; oil firmer on geopolitics while gold/silver/copper slide on positioning. The focus is early jobless claims for confirmation of a “no hire/no fire” labor backdrop.

— Equities Friday: Indexes were narrowly mixed/flat on the session but posted solid weekly gains — reflecting resilient risk tone into year-end despite lighter liquidity.

— Silver’s breakout raises red flags: Silver’s explosive, industrial-demand-fueled surge has outpaced gold, but its “financial + industrial” identity amplifies volatility — history argues for sharp swings and sentiment-driven reversals even in strong uptrends.

AG MARKETS

— U.S. soybean market 2025 / outlook for 2026: Big supplies and uneven export demand kept futures range-bound, while record crush and policy-driven soybean oil demand (biofuels/RFS/45Z dynamics) became the main lever — making 2026 especially sensitive to EPA final volumes, 45Z implementation details, and U.S. competitiveness vs. Brazil/China timing.

— Japan sets March 2026 sanitary audit for Brazilian beef: Japan will inspect Brazil’s disease control and inspection system — an important procedural step toward market access, likely starting with Brazil’s southern states, even as packers in major producing regions watch for broader inclusion.

— Agriculture markets Friday and weekly change: Mixed closes across grains/oilseeds/livestock, with modest weekly strength in corn/soybeans/wheat and continued attention on the soybean oil–biofuels linkage.

45Z PROGRAM

— Treasury/IRS slow walk on 45Z guidance creates uncertainty: Proposed regs have moved into OMB review but producers still lack key definitions and compliance mechanics for 2025 planning — raising financing and investment caution, especially where credit value swings can make or break project IRRs.

ENERGY MARKETS & POLICY

— Monday: Oil prices climb as geopolitics overshadow supply glut: Crude rebounds on Ukraine/Middle East headlines and thin liquidity, even as the market remains anchored by expectations of ample 2026 supply and inventory watching.

— Friday: Oil slides as supply glut fears trump geopolitics: A sharper selloff underscored how surplus expectations and potential sanctions-easing scenarios can overwhelm intermittent headline risk premiums.

TRADE POLICY

— U.S. challenges China beef safeguard move at WTO: Washington seeks consultations to test Beijing’s “serious injury” claim and clarify whether safeguard remedies are coming — an early signal that beef trade friction could flare even as broader bilateral commitments are tested.

— Canada and Mercosur accelerate free trade talks: Ottawa and Mercosur are aiming to conclude an agreement within about a year, reflecting trade diversification urgency as protectionist pressures rise elsewhere.

RURAL BROADBAND

— Rural broadband: Billions spent, gaps still wide: After major funding waves across Obama, Trump, and Biden-era efforts, rural coverage and quality remain uneven — raising accountability questions about fragmented oversight, mapping failures, and slow project execution.

— Satellites step in — but don’t replace fiber: Satellite options like Starlink are delivering faster near-term improvements in rural access, but capacity, consistency, and cost constraints keep them framed as a bridge solution rather than a full substitute for high-capacity terrestrial networks.

POLITICS & ELECTIONS

— Midterm shake up: Record wave of retirements: An unusually large number of House and Senate retirements signals institutional strain and sets up a volatile cycle defined by open seats, crowded primaries, and reduced incumbency advantages.

— Pelosi says it’s “when, not if” Democrats retake the House: Pelosi projects confidence and unity, but the piece flags her mixed forecasting record — suggesting her certainty is as much mobilizing rhetoric as hard electoral math.

FOOD POLICY & FOOD INDUSTRY

— Is Big Food approaching its tobacco moment? A landmark San Francisco lawsuit and rising scrutiny of ultraprocessed foods sharpen the “tobacco-style reckoning” debate, with RFK Jr.’s MAHA push elevating the issue while also dividing advocates over whether the momentum becomes structural or symbolic.

TRANSPORTATION & LOGISTICS

— Bioceanic Railway takes shape: China and Brazil’s $18.5b Atlantic-to-Pacific rail/port corridor could reroute South American exports toward Asia, reduce Panama Canal dependence, and deepen China’s infrastructure footprint — while raising environmental and geopolitical stakes.

— Mega railroad merger push leans on political muscle: Union Pacific/Norfolk Southern’s $85b bid is being sold via broad political endorsements more than shipper concessions, with regulators and opponents focused on competition and service risks as the STB review stretches toward 2027.

WEATHER

— NWS outlook: Peak storm impacts from the Upper Midwest to the Great Lakes with icing in interior New England, followed by an Arctic surge into much of the East (including Florida) and then a quick warm-up in parts of the Plains.

TOP STORIES—Economic calendar of reports this week Mon., Dec. 29• Pending Home Sales Index • Dallas Fed Mfg. Survey  Tue., Dec. 30 • S&P Cotality CoreLogic Case-Shiller HPI • FHFA House Price Index • Chicago PMI  Wed., Dec. 31• Jobless Claims • FOMC Minutes Thur., Jan. 1• Holiday. U.S. markets, gov’t offices are closed. Several markets around the world are closed. Fri., Jan. 2• U.S. gov’t offices are closed with no economic data to be released. U.S. markets will trade normal hours. —Calendar of ag reports this week:  Mon., Dec. 29 • CFTC Commitments of Traders • Export Inspections   • Slaughter Weekly • Peanut Stocks and Processing  • Peanut Prices Tue., Dec. 30• Egg Products  • Cotton and Wool Yearbook Wed., Dec. 31• Export Sales for week ended Dec. 18 • CFTC Commitments of Traders report for week ended Dec. 23 • Broiler Hatchery • Agricultural Prices Thur., Jan. 1• Holiday. U.S. markets, gov’t offices closed. Several markets around the world are closed. Fri., Jan. 2 • CFTC Commitments of Traders, delayed until Jan. 5•  Cotton System • Fats & Oils • Grain Crushings • Slaughter Weekly  • Peanut Prices — Calendar of energy reports for this week: Mon., Dec. 29• EIA Petroleum Status Report  • Weekly Ethanol Production • EIA Natural Gas Report • Main North Sea programs (February) • ICE weekly Commitments of Tradersreport for Brent, gasoil Tue., Dec. 30• API US inventory report • Baker-Hughes Rig Count• Brent February futures expire Wed., Dec. 31• EIA Petroleum Status Report  • Weekly Ethanol Production• EIA Natural Gas Report • Nymex gasoline January futures expire • Holiday: Several countries observing holiday Thur., Jan. 1• Holiday. U.S. markets, gov’t offices are closed. Several markets around the world are closed. Fri., Jan. 2• ICE weekly Commitments of Tradersreport for Brent, gasoil delayed until Jan. 5 —Bomb cyclone bears down on post-holiday travel, raising blizzard and ice risks nationwideA rapidly intensifying winter storm is set to snarl flights, shut roads, and deliver heavy snow, ice, and a sharp Arctic chill across much of the U.S. through early week A powerful winter system — expected to strengthen into a “bomb cyclone” — is threatening post-holiday travel and creating hazardous conditions across large swaths of the country as 2025 winds down. Forecasters warn of blizzard conditions in the Upper Midwest and Great Lakes, icy roads in New England, severe storms followed by plunging temperatures in the South, and a gradual calming trend in the West. More than 30 million people across the Midwest and Northeast are under winter weather alerts as hazardous conditions disrupt travel during one of the busiest stretches of the holiday season. Midwest: Blizzard conditions and power risks. The most severe impacts are expected across the Upper Midwest, where blizzard warnings stretch across parts of Iowa, Minnesota, Wisconsin, Michigan, and North Dakota. According to the National Weather Service, the storm will rapidly intensify as cold Arctic air collides with warmer, moisture-laden air — the hallmark of a bomb cyclone, as defined by National Oceanic and Atmospheric Administration. Snow totals could range from 6 inches to as much as 2 feet, especially near the Great Lakes. Wind gusts up to 60 mph may produce whiteout conditions, downed tree limbs, and scattered power outages, according to AccuWeather. Travel disruptions are already mounting. By Sunday afternoon, roughly a quarter of flights departing Chicago O’Hare International Airport and Minneapolis–St. Paul International Airport were delayed, with thousands of U.S. flights affected nationwide. Central and Southern U.S.: Storms, then a deep freeze. After an unseasonably warm stretch, much of the Central and Southern U.S. will see an abrupt shift as Arctic air surges southward. Strong thunderstorms are expected to develop Sunday afternoon and evening, sweeping east from Arkansas toward the Ohio and Tennessee valleys and into coastal Southern states by Monday. Behind the storms, temperatures are forecast to plunge into the teens and 20s, raising concerns about flash-freezing on roads as rain quickly turns to ice. New England: Freezing rain threat. In the Northeast, freezing rain poses a major hazard, particularly on Sunday. Even modest ice accumulation could make roads treacherous and complicate air and ground travel during one of the busiest return-travel periods of the year. West: Storms ease after holiday deluge. Conditions are improving across much of the West. The atmospheric river that soaked Southern California — triggering mudslides, evacuations, power outages, and several fatalities — is expected to taper off. A quieter, drier weather pattern should settle in through early week, though light snow may linger in the central Rockies, Pacific Northwest, and parts of southeastern New Mexico. Bottom Line: With blizzards, ice, severe storms, and rapid temperature swings unfolding simultaneously across regions, forecasters urge travelers to monitor local advisories closely and prepare for significant delays as the year ends. — Western states push for emergency fuel stockpile beyond crude oilCurtis bill would create a refined fuel reserve for gasoline, diesel, and jet fuel to address regional supply risks A new bill introduced by John Curtis (R-Utah) would expand U.S. emergency energy planning beyond crude oil by establishing a dedicated reserve of refined fuels in the western United States. The proposal, titled the Western Refined Fuel Reserve Act, would direct the Department of Energy to create a stockpile of gasoline, diesel, and jet fuel located west of the Rocky Mountains. Curtis argues that the current Strategic Petroleum Reserve — which holds only crude oil — does not adequately protect Western states during emergencies, when time delays for refining and transportation can worsen fuel shortages. Curtis said Western communities face unique vulnerabilities due to declining regional refining capacity, infrastructure bottlenecks, long transportation distances, and geological risks such as earthquakes. In those conditions, he argues, access to ready-to-use fuels matters more than access to crude oil. Under the legislation, the refined-fuel reserve would total 10 million barrels, broken down into at least 5 million barrels of gasoline, 3 million barrels of diesel, and 2 million barrels of jet fuel. The government would be required to maintain at least 75% capacity for each product during the first five years of operation. The fuels could be released during emergencies or major supply disruptions affecting the region. The bill would require the Department of Energy to establish the reserve within six months of enactment and to submit annual reports to Congress detailing operations, storage locations, and mechanisms used to support the fuel stockpile. The proposal comes as the federal government continues efforts to rebuild crude inventories in the existing SPR. As of early December, the reserve held roughly 412 million barrels of crude oil — well below its authorized capacity of 714 million barrels. The Trump administration has made replenishing the SPR a priority, with about $171 million included in the president’s tax and spending legislation for oil purchases and maintenance. The DOE has also signaled interest in opportunistic crude purchases amid relatively low oil prices. Curtis’ bill reflects a broader debate over whether U.S. emergency energy policy — largely designed in the 1970s — needs updating to reflect modern fuel use, regional infrastructure constraints, and faster-moving crisis scenarios, particularly in the western half of the country.

FINANCIAL MARKETS

—Equities today: U.S. equity futures are modestly lower following a mostly quiet weekend of news and as the Trump/Zelenskyy meeting failed to produce material progress on peace in Ukraine.Oil prices are rising moderately (2%) in response. Notably, gold, silver and copper are all down 2% – 4% pre-market but that’s likely due to year-end positioning.

The key economic report is Wednesday’s weekly jobless claims (it’s a day early because of the holiday) and the Sevens Report says “markets will want to see stability in the data to reinforce that we remain in a no hire/no fire environment as we begin the year. Ideally, we’d also see Continuing Claims drop solidly to imply that those looking for work were better able to find it (which implies a healthier labor market).”

—Equities Friday: 

Equity Index	Closing Price  Dec. 26	Point Difference  from Dec. 24	% Difference  from Dec. 24	Weekly Change
Dow	48,710.97	-20.19	-0.04%	+1.20%
Nasdaq	23,593.10	-20.21	-0.09%	+1.22%
S&P 500	6,929.94	-2.11	-0.03%	+1.4-%

—Silver’s breakout raises red flags, even as precious metals surge

The white metal’s explosive run past gold reflects real industrial demand — but history suggests volatility, hype, and sharp reversals are never far behind

Silver closed out 2025 in dramatic fashion, capping a year in which prices surged more than 150% and blasted through a 45-year ceiling. After breaking higher in October, the metal pushed to fresh records above $80 an ounce over the weekend before slipping back toward $75 — a reminder of just how turbulent silver markets can be.

The rally has outpaced even gold’s impressive 70% gain this year, but investors are being cautioned against treating the two metals as interchangeable. While both benefit from a weaker U.S. dollar and Federal Reserve rate cuts, silver behaves very differently once momentum takes hold.

Some demand appears to be coming from investors priced out of gold, as well as traders rotating away from so-called “digital gold” like Bitcoin. But silver’s unique role in the global economy adds another layer: it is a critical input for solar panels, electric vehicles, and data centers powering artificial intelligence — making it both a financial asset and an industrial commodity.

That dual identity amplifies volatility. Prices recently spiked ahead of China’s new export restrictions, prompting warnings from Elon Musk that tighter supply could disrupt industrial processes. Such headlines can send silver sharply higher — or lower — in short order.

History offers a cautionary tale. Silver’s past includes extreme episodes, from the Hunt brothers’ failed attempt to corner the market in 1980 to meme-stock-era enthusiasm during the 2021 bull run. The metal’s devoted following often grows during periods of market frenzy, but enthusiasm can evaporate quickly.

That pattern appears intact. After racing above $80, silver quickly retreated, underscoring the kind of swings rarely seen in gold. For investors tempted to swap gold for silver, the message is clear: silver’s shine can be blinding — and just as blinding when it fades.

AG MARKETS

—U.S. soybean market 2025, outlook for 2026: Big supplies, choppy demand — and biofuels took the wheel

Record crush and a policy-driven soybean oil boom helped offset weaker export momentum as Brazil’s dominance and U.S./China friction reshaped trade flows heading into 2026

Prices: range-bound futures, pressured by supply and export uncertainty

Soybean futures spent much of 2025 fighting a familiar mix: large global supplies and uneven import demand. Analysts underscored how abundant grain/oilseed production and trade tension weighed on prices, with U.S. soy exports losing share while Brazil expanded its lead in global trade.

USDA’s December WASDE kept the 2025/26 U.S. soybean balance sheet steady, pointing to ending stocks of 290 million bushels and a season-average farm price of $10.50/bu (marketing-year).

What it meant in 2025: downside pressure was rarely about a single headline; it was the cumulative effect of (1) Brazil’s export machine, (2) uncertainty around China demand timing/pace, and (3) U.S. stocks remaining comfortable enough to cap rallies.

Exports & trade: share lost to Brazil; China demand became more “episodic”

Exports were the soft spot. Reuters Renewed U.S./China friction hit U.S. soybean export momentum, while Brazil was expected to capture ~60% of global soybean exports, reinforcing a structural competitiveness gap.

USDA’s December outlook pegged U.S. soybean exports at 1.64 billion bushels (MY 2025/26). It also noted early season shipments were heavily tilted away from China (Sept–Nov shipments to non-China destinations up sharply year over year, while shipments to China were minimal), even as “flash” sales/commitments later improved after a U.S./China purchase commitment deal announcement.

Trade flow reality in 2025: China buying looked more stop-start — more sensitive to price spreads vs. Brazil and to policy/trade signals — making the market more headline-driven than a “steady pipeline” year.

Domestic demand: crush was the anchor — and it hit record territory

With exports less reliable, domestic demand did more of the heavy lifting. USDA projected record U.S. soybean crush of 2.56 billion bushels for MY 2025/26, supporting meal supply and especially oil availability.

This matters because, in 2025, soybeans increasingly traded like a two-product market:

1. Meal: tied to livestock margins/feed demand.

2. Oil: increasingly tied to energy policy, credits, and renewable diesel economics.

Energy: soybean oil became the swing factor (RFS + tax-credit changes)

The biggest structural story in 2025 was the policy-supported pull from biofuels into soybean oil.

USDA’s December WASDE shows 15.5 billion pounds of soybean oil going to biofuel in 2025/26 (forecast), a dominant share of the oil balance sheet.

Biofuels will consume a record 15.5 billion pounds and framed it as a step-change driven by federal policy and blending requirements.

Two policy currents mattered:

1. RFS “Set 2” proposal for 2026–2027: EPA proposed higher future biofuel volumes and proposed that imported renewable fuel/foreign feedstocks generate only half the RIN value of domestic pathways — supportive for domestic feedstock demand (including soyoil).

2. Tax credit regime shifted in 2025: EIA noted that the move to the Section 45Z Clean Fuel Production Credit (which applies to domestic production) contributed to a sharp drop in imports and reshaped renewable diesel/biodiesel economics.

2025 takeaway: soybean oil pricing and crush incentives were increasingly “policy-and-credits driven,” meaning soybean fundamentals can tighten quickly even when soybean exports lag.

Policy backdrop: farm economics and aid, plus trade policy spillovers

Low crop prices and margin stress stayed central. USDA is unlikely to issue additional farm aid beyond an announced package, reflecting the tight policy constraints around farm support even as producers flagged sizable revenue pressure.

Meanwhile, the export sales reporting disruptions tied to the fall shutdown (and year-end schedule shifts) mattered because soybeans trade weekly export signals heavily.

Key issues to watch in 2026

1. Can the U.S. win back export share — especially with China?

Brazil’s scale/seasonality advantage isn’t going away; U.S. competitiveness hinges on price spreads, logistics, and trade policy tone

2. Biofuel policy finalization is the soybean oil “big lever”

• Final EPA decisions on 2026–2027 RFS volumes and the “half-RIN” treatment for imports/foreign feedstocks could shift soyoil demand and pricing power.

• 45Z implementation details will keep influencing whether renewable diesel demand translates into more domestic crush vs. demand leakage elsewhere.

3. Crush capacity vs. meal/oil balancing

With USDA projecting record crush, the question becomes whether meal demand (domestic + exports) can keep pace without pressuring meal values — while oil stays supported by fuels policy.

4. Acreage competition and production risk

If biofuels keep supporting oil (and therefore crush bids), soybeans may compete harder with corn/cotton acres — yet weather risk and South American crop outcomes will still set the global tone.

5. Farm finances and Washington’s willingness to backstop margins

Any 2026 market downturn will quickly revive the “aid vs. no aid” debate — but USDA has already been signaling limits.

—Japan sets March 2026 sanitary audit for Brazilian beef

Inspection seen as a critical step toward opening Japan’s high-value beef market, with early focus on Brazil’s southern states

Japan will conduct a sanitary audit of Brazil’s beef inspection and disease-control system in March 2026, marking a significant procedural step in Brazil’s long-running effort to gain access to Japan’s premium beef market, according to Brazil’s Agriculture Ministry.

Brazil — the world’s largest beef exporter — has pursued entry into Japan for decades, but talks gained renewed momentum this year following a visit by President Luiz Inácio Lula da Silva to Japan. The upcoming audit will evaluate Brazil’s sanitary controls as part of Japan’s market-opening process.

Japanese authorities are expected to initially concentrate on Brazil’s southern states — Rio Grande do Sul, Santa Catarina, and Paraná — which were recognized as free of foot-and-mouth disease earlier than other regions. While these states account for less than 4% of Brazil’s beef exports by volume, the narrow regional focus has raised concerns among meatpackers in major producing states such as São Paulo, Mato Grosso, Mato Grosso do Sul, and Pará, as previously reported by Reuters.

Brazil achieved nationwide recognition in May as free of foot-and-mouth disease without vaccination from the World Organization for Animal Health. The country’s last outbreak occurred in 2006. Although the disease poses no risk to human health, it can sharply reduce herd productivity — explaining Japan’s stringent sanitary scrutiny.

For Brazil, passage of the March 2026 audit would represent a major breakthrough toward accessing one of the world’s most lucrative beef markets, even if initial approvals are limited to a subset of regions.

—Agriculture markets Friday and weekly change:

Commodity	Contract Month	Close  Dec. 26	Change vs  Dec. 24	Weekly Change
Corn	March	$4.50	-$0.01	+$0.0625
Soybeans	March	$10.72½	-$0.04	+$0.13
Soybean Meal	March	307.4	-0.70	+7.6
Soybean Oil	March	49.20¢	-0.32¢	+1.41¢
Wheat (SRW)	March	$5.19	-$0.0275	+$0.0925
Wheat (HRW)	March	$5.33½	-$0.005	+$0.18
Spring Wheat	March	$5.7925	-$0.01	+$0.0125
Cotton	March	64.49¢	+0.25¢	+0.24¢
Live Cattle	February	$229.65	+$1.10	-$1.15
Feeder Cattle	January	$340.425	+$1.625	+$1.025
Lean Hogs	February	$84.525	-$0.525	+$0.025

45Z PROGRAM

—Treasury/IRS slow walk on 45Z guidance creates uncertainty for 2025 and beyond

Complex statute, regulatory bottlenecks, and resource constraints delay final rules — and while lawmakers press for action, there’s little momentum in Congress to revert to the old program 45Z replaced 

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Note: 45Z rulemaking: Treasury’s year-end pledge still unfulfilled. Treasury and the IRS said earlier this year (link) they would release additional details on the Section 45Z clean fuel production tax credit by the end of 2025 to give taxpayers clarity for the first year of compliance. While initial guidance was issued in January — outlining emissions rate tables and signaling forthcoming regulations — the full proposed rules have not yet been published, but could be very soon.

By late December, Treasury had sent the draft 45Z regulations to the White House Office of Management and Budget for review, a key procedural step. But that review means producers heading into 2026 still lack finalized definitions, certification rules, and compliance mechanics needed for tax planning. Industry groups and lawmakers have criticized the delay, warning it undermines investment certainty just as the credit replaces the long-running biodiesel and renewable diesel incentives.

An industry analyst emailed: “When the proposed rule was sent to OMB, I noted a few issues:

“First, the fact that it’s a proposed rule. Keep in mind, historically Treasury has preferred to implement using guidance because it provides flexibility. Rulemaking via regulation, rather than guidance, is more definitive.

“Secondly, the listing with OMB stated no economic significance allowing expediency but the notion that the proposed regulation is not economically significant is interesting to me. It also notes no international impact. My understanding is the fuel must be domestic but what about the feedstock from North America? Something to watch…

“Lastly, the use of RECs (renewable electricity credits) can significantly lower CI scores. How that is addressed will be interesting to watch.” Link
 

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The delays in providing full guidance on the Section 45Z clean fuel production tax credit stem from several factors: 

1. High complexity of the statute:

The 45Z credit — enacted as part of clean energy tax changes — involves detailed lifecycle greenhouse-gas emissions calculations, reporting requirements and eligibility criteria that intersect multiple federal agencies and technical models. Sorting through these nuances for clear regulatory language takes considerable time.

2. Resource and workload strain:

The Treasury and IRS are simultaneously implementing a suite of new and expanded tax incentives from recent legislation (OB3), straining internal resources and delaying final regulations for several programs, including 45Z.

3. Iterative rulemaking process:

Instead of issuing final regulations quickly, the IRS has released notices of intent to propose rules and interim guidance, which then require public comment and further revision before finalization. This iterative process intentionally slows implementation but ensures legal defensibility and market clarity.

4. Timing across different administrations:

Initial guidance under the prior Biden administration consisted largely of notices rather than binding rules. Treasury recently delivered a proposed rule to the Office of Management and Budget for review, an essential but time-consuming step before publication and comment.

5. Uncertainty from broader tax law changes:

Legislative changes such as the One Big Beautiful Bill Act (OB3) enacted in 2025 significantly altered clean energy tax incentives, adding complexity to the regulatory picture and slowing resolution on how 45Z will operate within the revised tax framework.

6. The 43-day gov’t shutdown helped delay key decisions regarding the 45Z program. But the Biden administration also shares the blame because they shirked their responsibility on 45Z decisions. It all snowballed once key regulatory deadlines or mileposts were missed. It didn’t seem like it at the time, but now that this is far down the road, just a simple decision or decisions could have altered key biofuel issues.

What that means for 2025 and beyond. Because final guidance — including eligibility rules, emissions modeling requirements, and compliance pathways — has been delayed, many clean fuel producers face uncertainty about how to claim the credit for 2025 production. Even with interim steps, such as registration notices and proposals, stakeholders have pressed Treasury and the IRS for clearer rules. The prolonged delay is not merely procedural. The 45Z credit is designed to replace and improve upon prior biofuel incentives by tying credit values to lifecycle carbon intensity. Without final rules, producers cannot confidently price fuel, farmers lack clarity on which practices will be rewarded, and lenders remain cautious about financing new capacity.

Are lawmakers trying to revert to the old program 45Z replaced? As of now, there is no serious legislative effort to revert to the previous tax regime that 45Z replaced (e.g., the older blenders credit structure) while guidance is finalized:

• Members of both the House and Senate have urged Treasury to finalize the 45Z rules, emphasizing the need for certainty rather than seeking to undo the statute. These lawmakers are focused on completion of the regulatory process, not repeal of the credit itself.

• Earlier in 2024 and 2025, some House members pressed the IRS for action and documentation related to 45Z so producers could plan for compliance, but those efforts were about expediting guidance, not reversing the policy.

• The 2025 overhaul of clean energy tax credits under OB3 did not reinstate the old blenders credit or rescind 45Z, instead expanding and extending 45Z while layering on additional conditions.

Outlook: The clearest near-term development is that Treasury and IRS have advanced proposed regulations through the OMB review process, a key procedural milestone that suggests final rules could follow (though timing remains uncertain). Congressional pressure will likely continue — but mainly to ensure timely and workable guidance, not to overturn the statute. Also, we previously detailed the growing role of the National Energy Dominance Council (link) in the Trump administration regarding energy policy announcements.

Summary of key details still awaited

• Coming rules will reflect changes made in the OB3 including authorization for the program through 2029, the removal of indirect land use (ILUC) provisions and making the credit only available for renewable fuels produced from domestic feedstocks or imported feedstocks from North America — Canada and Mexico.

• Eligibility of specific feedstocks and farming practices

• Credit stacking rules with state and other federal incentives

• Audit, reporting, and compliance requirements

Open 45Z Questions That Still Matter for 2025 PlanningWhat Treasury/IRS still haven’t settled — and why producers, lenders, and Congress remain frustrated Below is a practical, issue-by-issue breakdown of what remains unresolved (or only partially resolved) under 45Z, why each item is slowing decisions for 2025 and beyond, and how it connects to the political pressure campaign you’re seeing on Capitol Hill. 1. Lifecycle Emissions Modeling (The Biggest Bottleneck)  What’s unresolved• Which official lifecycle model Treasury will lock in (GREET variants, updates, or Treasury-specific modifications)• How frequently emissions factors can be updated• Whether producers can rely on point-in-time modeling or must re-certify annually  Credits: The maximum Section 45Z credit varies by fuel type and whether a producer meets prevailing wage and registered apprenticeship (W&A) requirements:• Sustainable Aviation Fuel (SAF): Legislative changes effective after 2025 (e.g., under the One Big Beautiful Bill Act): The special $1.75/gallon SAF top rate was eliminated for fuel produced after Dec. 31, 2025, leaving $1.00 per gallon as the maximum for all qualifying fuels when wage/apprenticeship rules are satisfied.   What’s happening behind the scenes• Treasury and IRS must coordinate with DOE and EPA, and are wary of legal challenges if the model is seen as arbitrary• This is a major reason guidance has stalled at Office of Management and Budget review; the process has also been slowed as it must go before the National Energy Dominance Council• Ethanol, biodiesel, renewable diesel, and SAF projects cannot finalize economics without knowing which model governs  Capitol Hill pressure• Farm-state senators (notably Grassley, Ernst, Klobuchar) are pushing Treasury to avoid model changes that would retroactively penalize Midwest ethanol 2. Feedstock Eligibility & Verification  What’s unresolved• Treatment of corn ethanol with carbon capture• How imported feedstocks are handled• Whether book-and-claim systems are allowed for certain inputs  Why it matters• Determines whether existing plants qualify or need costly retrofits• Drives lender hesitation — banks won’t underwrite without certainty  Political angle• Agriculture committees are warning Treasury not to recreate the complexity that plagued earlier SAF and clean fuel incentives 3. Carbon Capture & Co-Location Rules  What’s unresolved• How to credit off-site or shared carbon capture pipelines• Permanence and monitoring standards for sequestration• Interaction between 45Z and 45Q  Why it matters• Many ethanol plants are planning capture projects specifically to qualify for higher 45Z tiers• Unclear stacking rules could kill project IRRs (internal rates of return)  Congressional concern• Quiet bipartisan pressure to avoid Treasury “double penalizing” producers who invested early in CCS 4. Registration, Recordkeeping & Audit Risk  What’s unresolved• Final registration process for producers• Documentation burden and audit look-back periods• Penalties for modeling errors discovered after credit claims  Why it matters• CFOs are worried about clawbacks years later• Producers are delaying claims or hedging exposure  Treasury reality• IRS is under orders to strengthen compliance — which slows guidance but raises audit standards 5. Transition From the Old Credit (What Congress Is Really Worried About)  Key point There is no serious, live legislative vehicle to formally reinstate the blender credit (or other pre-45Z programs).  But…• Multiple lawmakers are floating temporary relief options, including:Allowing limited use of old credit methodologies for 2025Providing safe-harbor reliance on interim guidanceDelaying enforcement penalties until final rules are published  These ideas are being discussed privately because leadership does not want to reopen clean-energy tax law — but pressure is building. 6. Timing Reality Check (What to Expect)  Most realistic sequence• Treasury clears OMB review• Proposed regs published (with comment period)• Limited safe-harbor reliance language for 2025• Final rules late 2025 but later for other years What that means for 2025• Claims may be made, but many producers will:Discount expected credit valueDelay capital investmentsSeek congressional backstops Bottom Line for Ag & Biofuels  • The delay is not accidental — Treasury is prioritizing legal defensibility over speed• Congress is not trying to undo 45Z, but is increasingly focused on damage control• For agriculture, the biggest risk is not repeal — it’s paralysis

Why IRRs (internal rates of return) matter in the 45Z context. For biofuel, ethanol, SAF, and carbon-capture projects:

• 45Z credit value directly feeds project cash flow

• Changes in Treasury/IRS guidance can raise or crush IRRs

• Even a 10–20¢/gallon swing in expected credit value can:

• Push IRRs above lender thresholds (project moves forward), or
• Drop IRRs below hurdle rates (project gets shelved)

That’s why developers are freezing decisions until rules are final.

Typical IRR benchmarks (rough, real-world ranges)

• Low-risk infrastructure: ~6–8%

• Ethanol plant retrofits / CCS add-ons: ~9–12%

• New SAF or advanced biofuel projects: ~12–18%+

• Anything below lender hurdle: often dead on arrival

Bottom line: When you see language like “uncertain 45Z rules could kill project IRRs,” it means: The credit uncertainty is big enough to determine whether projects get financed or don’t happen at all.

ENERGY MARKETS & POLICY

—Monday: Oil prices climb as geopolitics overshadow supply glut

Crude rebounds more than 2% as Ukraine peace talks and Middle East tensions offset concerns about abundant supplies

Oil prices rose by more than $1 a barrel on Monday as investors balanced diplomatic momentum toward ending the war in Ukraine against fresh concerns about potential supply disruptions in the Middle East. Brent crude futures climbed $1.22, 2%, to $61.86 a barrel, while U.S. West Texas Intermediate (WTI) rose $1.22, about 2.2%, to $57.96.

The rebound followed a sharp selloff on Friday, when both benchmarks fell more than 2%. Analysts noted that thin year-end liquidity is amplifying price swings as markets react to geopolitical headlines.

Ukraine’s president, Volodymyr Zelenskuy, said “significant progress” had been made in talks with President Donald Trump, with U.S. and Ukrainian teams set to meet next week to finalize issues aimed at ending Russia’s war. Zelenskyy said any talks with Russia would only occur after Washington and European leaders agree on a Ukrainian-proposed peace framework.

At the same time, renewed tensions in the Middle East added a risk premium to prices. Analysts pointed to Saudi air strikes in Yemen as a factor heightening market concerns about possible supply disruptions, even as global crude supplies remain ample.

Those supply dynamics were underscored by expectations that Saudi Arabia will cut the February official selling price for its Arab Light crude to Asia for a third straight month, reflecting weaker spot prices and abundant availability. Investors are also watching U.S. inventory data — delayed by the Christmas holiday — with crude stocks expected to have fallen last week, while gasoline and distillate inventories likely rose.

Looking ahead, analysts see WTI trading in a roughly $55–$60 range, with markets also monitoring U.S. enforcement actions against Venezuelan oil shipments and the potential fallout from U.S. military strikes against ISIS targets in Nigeria.

—Friday: Oil slides as supply glut fears trump geopolitics

Prices fall more than 2% as markets price in a prolonged surplus and potential sanctions relief

Oil prices sank sharply on Friday, with Brent crude falling 2.6% to $60.64 a barrel and U.S. WTI dropping 2.8% to $56.74, as concerns about a deepening global supply glut overwhelmed recent geopolitical support. Despite a midweek rebound, both benchmarks are on track for their steepest annual losses since 2020—down roughly 19% for Brent and 21% for WTI in 2025.

Markets are increasingly focused on oversupply heading into 2026. The International Energy Agency projects global supply will exceed demand by nearly 3.9 million barrels per day next year, reinforcing expectations of sustained inventory builds. Analysts say intermittent geopolitical risk premiums have failed to shift the broader balance as stockpiles remain elevated.

Diplomacy is also in focus. Investors are watching for progress toward a Russia-Ukraine peace agreement, with Ukrainian President Volodymyr Zelenskyy was expected to meet President Donald Trump to discuss territorial issues and security guarantees. Any movement toward a ceasefire could pressure prices further by opening the door to eventual easing of sanctions on Russian oil and the return of additional supply.

Meanwhile, U.S. enforcement actions aimed at curbing sanctioned Venezuelan oil flows have had limited price impact. Analysts note Washington’s emphasis on enforcement rather than escalation has muted supply risks, keeping the market squarely focused on surplus conditions rather than headline geopolitical threats.

TRADE POLICY

—U.S. challenges China beef safeguard move at WTO

Washington seeks clarity on Beijing’s injury claim as imports slow and trade tensions resurface

The United States has formally requested consultations with China at the World Trade Organization, pushing back against Beijing’s assertion that rising beef imports have caused “serious injury” to China’s domestic cattle industry.

China launched a safeguards investigation into beef imports in December 2024 and has extended it several times, most recently through January 2026. In a recent WTO notification, China said increased imports had harmed domestic producers — but did not spell out any proposed remedy, such as tariffs or quotas.

In response, the U.S. requested WTO consultations under the Safeguards Agreement, saying the talks are intended to clarify China’s injury determination and any safeguard measures under consideration. Washington also pointed to Article 8.1 of the agreement, which requires countries imposing safeguards to maintain a “substantially equivalent” level of trade concessions — often through compensation to affected exporters.

China’s own data show beef imports have risen steadily since 2019, with import market share climbing from about 20.5% that year to nearly 28% in 2023. For the first half of 2024, import share rose further to roughly 31%, up from about 28% a year earlier. Those figures underpin Beijing’s injury claim.

However, U.S. analysts argue the broader trend has shifted. A recent outlook from USDA Foreign Agricultural Service projects only modest growth in Chinese beef imports in 2026, citing weaker household consumption and sluggish demand. Imports in the first five months of 2025 were already down more than 10% from a year earlier, with full-year volumes unlikely to match 2024 levels even if shipments recover later in the year.

The dispute also lands amid a fragile thaw in U.S./China trade relations. A White House fact sheet issued after a November 2025 meeting between Donald Trump and Xi Jinping said Beijing agreed to lift retaliatory tariffs on U.S. beef as part of a broader trade deal. U.S. officials now appear wary that a safeguard action could undermine that commitment.

For U.S. cattle producers and exporters, the WTO talks are an early test of whether China’s safeguard probe becomes a new barrier — or remains a procedural warning shot in an already volatile ag trade relationship.

—Canada and Mercosur accelerate free trade talks

Ottawa and South American bloc aim to conclude a deal within a year as global trading patterns shift

Canada and the Mercosur trade bloc – comprising Argentina, Brazil, Paraguay and Uruguay, with Bolivia moving toward full membership – are stepping up negotiations on a comprehensive free trade agreement, with officials from both sides targeting a conclusion by the end of 2026.

The discussions, which first began in 2018 and were stalled during the pandemic, have gained urgency amid rising protectionist measures elsewhere, including heightened U.S. tariff activity. Canada’s International Trade Minister, Maninder Sidhu, underscored Ottawa’s commitment to swift progress during recent meetings in Brazil, where negotiators discussed tariff elimination on most goods, support for small and medium-sized businesses, and anti-dumping safeguards.

Bilateral trade with Brazil already stands as Canada’s largest within Mercosur, accounting for $12.7 billion in merchandise trade in 2024, though it remains small compared with Canada’s commerce with the United States.

Negotiators are prioritizing practical, speed-oriented outcomes to secure early gains, even as longstanding Mercosur talks with the European Union continue to face delays, with hopes to finalize that pact by January.

Political analysts see the push for a Canada/Mercosur deal as part of a broader strategy by Ottawa to diversify trade relationships and hedge against protectionist pressures from Washington, contributing to an evolving pattern of trade alliances in the Americas.

RURAL BROADBAND

— Rural broadband: Billions spent, gaps still wide

After more than a decade of federal promises and funding, large swaths of rural America remain stuck with slow, unreliable internet — raising hard questions about how Washington spends broadband dollars

Disconnect in rural America. Drawing on recent Wall Street Journal commentary (link), the disconnect between ambition and outcomes in rural broadband is becoming harder to ignore. Federal officials routinely tout broadband as essential infrastructure — on par with roads and electricity — yet millions of rural households and farms still lack reliable, high-speed service. The problem is no longer a lack of money or authority, but execution.

The WSJ item underscores a core reality: federal broadband programs are long on announcements and short on finished connections. Complex grant rules, shifting definitions of “served” versus “unserved,” and overlapping agencies have slowed deployment. In many cases, money sits unspent for years while rural communities wait. Meanwhile, private providers face regulatory uncertainty and cost overruns that make sparsely populated areas unattractive without heavy subsidies.

The result is a paradox familiar to rural America — record federal spending alongside persistent digital dead zones.

Billions across three administrations: 

• Under Barack Obama, the federal government launched major broadband initiatives through the Recovery Act and early USDA and FCC programs, promising to jump-start rural connectivity after the financial crisis. Billions flowed out, but many projects stalled or delivered minimal speed upgrades.

•The Joe Biden administration dramatically escalated the effort, most notably through the Infrastructure Investment and Jobs Act. The Broadband Equity, Access, and Deployment (BEAD) program alone committed more than $40 billion. Yet years later, most of that money has not reached the ground, tied up in mapping disputes, state plans, and federal approvals.

• The Donald Trump administration also poured billions into rural broadband through USDA ReConnect, FCC auctions, and pandemic-era relief. While some areas benefited, audits later flagged inefficiencies, over-subsidization, and funds flowing to areas that already had service.

Across all three administrations, the cumulative federal commitment runs well into the tens of billions of dollars — with results that remain uneven at best.

Why rural America is still waiting. Despite the spending, several structural problems persist:

• Fragmented oversight: USDA, FCC, NTIA, and Treasury all run broadband programs, often with conflicting rules.

• Mapping failures: For years, federal maps overstated rural coverage, delaying eligibility for truly unserved areas.

• Cost realities: Fiber builds across farmland and remote terrain are expensive, and grants often fail to cover long-term maintenance.

• Political optics over outcomes: Announcing funding has proven easier than ensuring projects actually deliver usable speeds.

For farmers, ranchers, and rural businesses, the consequences are tangible — from precision agriculture tools that don’t work to telehealth and education options that remain out of reach.

Bottom Line: The rural broadband story is no longer about whether Washington cares or whether funding exists. It is about whether federal policy can translate massive appropriations into functioning infrastructure. As the Wall Street Journal notes, the gap between spending and service has become the defining feature of rural broadband policy. Until accountability, simpler rules, and realistic deployment models replace press releases and grant announcements, rural America risks becoming the cautionary tale of how throwing billions at a problem does not guarantee results.

Satellites Step In — But Don’t Replace FiberStarlink and rival space-based networks are improving rural internet access quickly, though limits remain Satellite broadband — led by Starlink, the low-Earth-orbit system backed by Elon Musk — is emerging as one of the fastest ways to bring usable internet to rural America. By beaming service from space, Starlink bypasses the high cost and slow pace of laying fiber across sparsely populated areas, delivering speeds far superior to dial-up or legacy DSL for millions of users worldwide. That capability has fueled arguments from market-oriented analysts that private innovation is succeeding where government programs have lagged, and prompted some states to subsidize satellite service alongside fiber and fixed wireless for quicker results. Still, even supporters concede satellite broadband has hard constraints. Compared with fiber, it typically falls short on upload speeds, latency, and consistency, and may never fully match terrestrial networks because of capacity limits. Equipment costs can also be higher for households, and congestion risks grow as subscriber numbers rise. As a result, experts increasingly frame satellite internet as a practical near-term bridge — sufficient for everyday use, telehealth, and schooling — rather than a permanent substitute for high-capacity infrastructure. Starlink is also not alone. Competing LEO systems such as Project Kuiper and OneWeb, along with advances in 5G and fixed wireless, are expanding the menu of options. Policymakers now face a trade-off: whether to keep federal broadband dollars focused on fiber — long seen as the gold standard — or adopt a more technology-neutral approach that prioritizes speed of deployment, even if performance varies. Upshot: Satellite broadband is materially improving rural connectivity faster than past federal efforts alone, but it is not a cure-all. Closing the rural digital divide will still require a mix of technologies, matched to geography — and better execution than Washington has delivered so far.

POLITICS & ELECTIONS

—Midterm shake up: Record wave of retirements signals unusual volatility on Capitol Hill

With dozens of lawmakers stepping aside halfway through the 119th Congress, both parties face a rare mix of open seats, leadership churn, and heightened uncertainty heading into the next election cycle.

At the midway point of the 119th Congress, Capitol Hill is experiencing one of its most pronounced turnover moments in more than a decade. According to data compiled by C-SPAN, 43 House members — 19 Democrats and 24 Republicans — have already announced they will not seek reelection, making it the highest number of House retirements in any odd-numbered year since 2011. The Senate is also seeing notable movement, with nine incumbent senators — four Democrats and five Republicans — planning to retire.

While retirements are a routine feature of congressional life, the scale and timing of this year’s announcements stand out. Mid-cycle retirement waves often reflect deeper political and institutional forces, and this one is no exception.

A Congress under strain. The elevated number of departures underscores the strain lawmakers face in a sharply polarized environment. Members from both parties have cited a mix of factors in recent months: legislative gridlock, fundraising pressures, redistricting uncertainty, and the personal toll of life in Washington. For some, stepping aside offers a chance to exit a Congress defined by narrow majorities, constant brinkmanship, and frequent procedural standoffs.

The House retirements, in particular, suggest frustration with the chamber’s operating climate. With control often hinging on only a handful of seats, rank-and-file members can feel simultaneously indispensable and powerless — expected to toe the party line while having limited influence over outcomes.

Senate departures add to the stakes. The nine Senate retirements amplify the political consequences. Senate races are expensive, high-profile, and often nationalized, meaning each open seat can quickly become a battleground for control of the chamber. Even in states that lean clearly toward one party, the absence of an incumbent removes a powerful advantage and forces both sides to invest resources earlier and more heavily.

Of note: In an evenly divided Senate environment, a handful of open seats can shift not only electoral math but also committee leadership, confirmation pipelines, and legislative priorities for years to come.

What this means for the next election cycle. Open seats typically attract crowded primary fields, intensify intraparty competition, and raise the odds of unpredictable outcomes. For party leadership, the retirement wave presents both opportunity and risk: chances to recruit fresh faces and recalibrate messaging, but also the danger of losing institutional experience and hard-won district or state advantages.

For voters, the turnover signals a moment of transition. Long-serving lawmakers departing means fewer familiar names on ballots and a greater role for challengers who may better reflect shifting demographics, policy priorities, or ideological currents.

A marker of a transitional era. Historically, spikes in retirements often coincide with periods of political realignment or heightened dissatisfaction with governing institutions. While it remains unclear whether the current wave marks a lasting trend or a temporary surge, the numbers alone point to a Congress in flux.

As the 119th Congress heads into its second half, the unusually high number of announced retirements ensures that the next election cycle will be defined less by incumbency and more by open-seat competition — setting the stage for a consequential reshaping of Capitol Hill.

—Pelosi says it’s “when, not if” Democrats retake the House — history suggests caution

Former Speaker projects confidence for 2026 midterms, but her past election forecasts often outpaced political reality

Outgoing Rep. Nancy Pelosi (D-Calif.) says Democrats are all but assured to reclaim the House in the 2026 midterm elections, framing the outcome as inevitable rather than uncertain. In an interview with Jonathan Karl on ABC’s This Week, Pelosi interrupted a hypothetical about a Democratic victory to insist, “No, no — when the Democrats win the House back.”

Pelosi also forcefully endorsed House Minority Leader Hakeem Jeffries (D-N.Y.) as the next Speaker should Democrats regain the majority, calling him “ready,” “eloquent,” and a unifier respected across the caucus.

The political math. Democrats currently need to flip three seats to retake control of the chamber. According to the Cook Political Report, there are 17 toss-up races heading into 2026 — 12 held by Republicans — while the Democratic Congressional Campaign Committee is targeting 40 potential pickup opportunities nationwide.

Party optimism has been buoyed by recent Democratic wins in off-year elections in New Jersey, Virginia, and New York City, where campaigns leaned heavily on cost-of-living issues. With inflation running around 2.7%, down from earlier in the year but still above the Federal Reserve’s target, Democrats see economic unease as fertile ground heading into a midterm under President Donald Trump.

Pelosi made clear that a Democratic House would act as a direct counterweight to the White House, emphasizing Congress’s spending authority. “We have the power of the purse,” she said, arguing that Republicans have ceded legislative independence to the president — a condition she promised would “be over” under Democratic control.

A record of overconfidence. Pelosi’s certainty, however, revives a familiar pattern. Over the past decade, she has repeatedly projected strong Democratic House outcomes that largely failed to materialize:

• 2018 proved a rare exception, when Democrats did flip the House decisively during Trump’s first term — reinforcing Pelosi’s belief in midterm backlash dynamics.

• 2020 and 2022, however, were more sobering. Pelosi and other Democratic leaders anticipated expanded or at least secure House majorities, only to see Democrats narrowly lose the chamber in 2022 despite favorable polling and expectations of a larger “blue wave.”

• In both cycles, Democratic turnout underperformed leadership expectations, while Republican gains in swing and rural districts blunted Democratic ambitions.

That history has made many strategists wary of treating structural indicators — presidential approval, inflation trends, or off-year election wins — as guarantees. While the 2026 map is undeniably competitive, Pelosi’s framing of the outcome as a foregone conclusion may resonate more as motivational rhetoric than as a hard-nosed forecast.

Bottom Line: Pelosi is projecting confidence and party unity at a moment when Democrats are eager to signal momentum. But given her mixed track record on election predictions, her declaration that Democrats will retake the House should be read less as a prediction grounded in electoral certainty — and more as a strategic statement aimed at energizing donors, candidates, and voters ahead of a highly volatile midterm cycle.

FOOD POLICY & FOOD INDUSTRY

—Is Big Food approaching its tobacco moment?

A landmark lawsuit, rising science, and RFK Jr.’s polarizing role fuel a debate over whether ultraprocessed foods face a true reckoning

A first-of-its-kind lawsuit by San Francisco is intensifying a long-running debate over whether the U.S. food industry is nearing a “Big Tobacco”–style reckoning — and whether the Trump administration’s health leadership is accelerating that shift or complicating it.

San Francisco City Attorney David Chiu has sued 11 major food companies, alleging deceptive marketing and harmful business practices tied to ultraprocessed foods. According to reporting by the Boston Globe, the case explicitly draws parallels to tobacco litigation in the 1990s, arguing that food companies adopted industry tactics designed to promote addictive products while obscuring health risks.

Advocates say the moment feels ripe. Research increasingly links ultraprocessed foods — now estimated to make up more than half of U.S. diets — to obesity, diabetes, heart disease, and other chronic conditions. Some scientists argue that the way foods are processed may matter more than their nutritional labels, reinforcing claims that these products are engineered for overconsumption.

Note: There isn’t a single agreed-upon definition of ultraprocessed foods, though the term generally refers to a classification system developed by Brazilian researchers about 15 years ago. Beyond obvious items like chips and candy, they include many breakfast cereals, lunch meats, and pre-made meals. A recent Centers for Disease Control study found that more than half of the food in American diets is ultraprocessed, defining them as products that “consist of industrial formulations … that typically contain unnatural additives, such as colorings or emulsifiers.”

The Trump administration has elevated the issue to unprecedented prominence. Health and Human Services Secretary Robert F. Kennedy Jr. has labeled ultraprocessed foods “poison” and made them central to the administration’s “Make America Healthy Again” (MAHA) agenda. Federal agencies have begun soliciting public input on defining ultraprocessed foods, and officials have highlighted voluntary industry steps such as removing artificial dyes. States including California and West Virginia have also moved to restrict such foods in schools or ban certain additives.

Yet whether this adds up to a true inflection point remains contested. Veterans of the tobacco fight argue that litigation — particularly lawsuits that can force companies to disclose internal documents — was the catalyst that shifted public opinion and led to regulation. They see the San Francisco case as a crucial first step, especially because it is brought by a government entity rather than a private plaintiff.

At the same time, experts and advocates are sharply divided over Kennedy’s role. Some credit him with pulling Republicans into a coalition that once dismissed similar efforts under former first lady Michelle Obama, and with energizing parents and grassroots activists. Others worry his embrace of controversial or non-scientific positions — and his focus on symbolic fixes like swapping artificial dyes for natural ones — risks producing superficial wins without addressing deeper health harms.

Critics also fear that Kennedy’s political baggage could fracture bipartisan cooperation, which many believe is essential for any tobacco-scale reckoning. Supporters counter that momentum is momentum, and that unprecedented attention from Washington outweighs internal disagreements.

The clash now playing out — in courts, statehouses, and federal agencies — will help determine whether ultraprocessed foods face sustained scrutiny akin to tobacco, or whether the moment dissipates into partial measures and cultural skirmishes, the Boston Globe reports,  The lawsuit in San Francisco may be the test case for whether Big Food’s practices are finally put under the same microscope that once transformed America’s relationship with cigarettes.

TRANSPORTATION & LOGISTICS

—Bioceanic Railway takes shape as China and Brazil push $18.5b Atlantic-Pacific link

New transcontinental rail corridor aims to cut freight costs, bypass Panama Canal bottlenecks, and reshape South American trade flows

China and Brazil have begun work on an $18.5 billion Bioceanic Railway, a transcontinental rail-and-port corridor designed to link Atlantic ports in Brazil with Pacific shipping lanes via Peru, offering a faster alternative to the Panama Canal for South American exports.

The project is being developed by Brazil’s state-owned Infra SA in partnership with China Railway, alongside four private rail operators in Brazil and Peru. Developers describe it as a “new Panama Canal over land.”

How the corridor works

• The rail line will originate in Lucas do Rio Verde, a major agricultural hub in Brazil’s grain belt.

• It will run west across Mato Grosso, pass near Bolivia, cross Rondônia, and continue through southern Acre toward Peru.

• The corridor will terminate at the Port of Chancay, a Chinese-built deep-water port inaugurated in August 2025.

While large portions of the rail network already exist, the plan requires significant upgrades and new construction, including sensitive new stretches through the Amazon region in western Brazil and northern Peru.

Strategic and geopolitical implications

• The railway is intended to lower freight costs and shorten shipping times for exports from Brazil, Uruguay, and Argentina, particularly soybeans, corn, meat, minerals, and industrial goods bound for Asia.

• By redirecting cargo flows directly to the Pacific, the corridor would reduce reliance on the Panama Canal, where congestion, drought-related capacity limits, and rising tolls have become persistent issues.

• The project reinforces China’s growing infrastructure footprint in Latin America, following its investments in ports, railways, and logistics hubs across the region.

Broader context. The Bioceanic Railway follows China’s earlier, unsuccessful attempt to build a transoceanic canal in Nicaragua — a project quietly abandoned due to political and logistical hurdles. Beijing’s strategy has since shifted toward land-based corridors and port control, including Chinese firms’ controlling interests in terminals connected to the Panama Canal.

If completed, the Bioceanic Railway would represent one of the most consequential logistics projects in South America in decades — reshaping trade routes, strengthening China/Brazil ties, and intensifying competition with traditional maritime chokepoints.

—Mega railroad merger push leans on political muscle, not compromise

Union Pacific/Norfolk Southern seek backing from thousands of officials as regulators weigh an $85 billion bid

Union Pacific and Norfolk Southern are pressing ahead with an $85 billion merger proposal by mobilizing an unusually broad political and civic coalition — while offering few concrete concessions to rivals or shippers that oppose the deal.

In a nearly 7,000-page application filed with the Surface Transportation Board, the two railroads emphasize endorsements from roughly 2,000 elected officials, trade groups, and nonprofits. Many of the letters echo identical language promising improved service reliability, faster transit times, expanded market reach, and increased infrastructure investment, rather than detailing remedies to competitive concerns.

Support spans party lines and geography, with backing from governors, members of Congress, state legislators, manufacturers’ associations, and even small nonprofits. The coordinated campaign is aimed at countering critics who argue the deal fails to meet the STB’s 2001 standard requiring mergers to enhance competition and serve the public interest.

Skeptics say the strategy reflects an effort to influence public opinion — and indirectly pressure regulators — without addressing core objections. “UP is trying to game the system,” said rail consultant Anthony Hatch, who nonetheless acknowledged the tactic reflects long-standing railroad lobbying playbooks.

The companies face opposition from labor unions, multiple Republican attorneys general, U.S. senators, and major commodities and energy shippers concerned about reduced competition and higher costs. The merger would reduce the number of major U.S. freight railroads from six to five, continuing decades of consolidation.

Union Pacific has also sought to cultivate ties with Donald Trump, who has publicly said the merger “sounds good,” even as some of his allies align with shipper concerns. Analysts say political engagement could draw influential figures into the debate at relatively low cost, though it may not ultimately sway the independent STB.

Notably absent from the application are firm financial concessions. Union Pacific previously disclosed setting aside $750 million for potential remedies, but references to that fund were omitted from the filing — a move some observers view as an opening negotiating posture rather than a final stance.

The STB is expected to comment on the completeness of the application shortly, with a final decision unlikely before 2027. Whether political backing can outweigh regulatory skepticism remains one of the central questions as the merger review unfolds.

WEATHER

— NWS outlook: Potent winter storm reaching peak intensity this morning from the upper Midwest to the Great Lakes with freezing rain across interior New England… …Arctic air will surge into the eastern two-thirds of the country including Florida followed by a quick warm-up across the northern and central Plains.