U.S. Farmer Aid Package Deemed Insufficient
China continues to buy U.S. soybeans, frees up storage for more ahead
Link: USTR Greer: China Is Meeting Terms of New Agreements
Link: Week Ahead: U.S. Farmer Aid Package Announcement May Finally Come
This Week
Link: Video: Wiesemeyer’s Perspectives, Dec. 5
Link: Audio: Wiesemeyer’s Perspectives, Dec. 5
Today’s Updates:
TOP STORIES
— New $12 billion aid package aims to steady farm country amid tariff strains
— China soy auction signals room-making for new state purchases
— China’s surplus smashes $1 trillion barrier again — even under tariffs
— USDA releases early baseline tables, offering first glimpse at 2026 acreage outlook
— Copper’s surge poses new trouble for Trump’s inflation fight
FINANCIAL MARKETS
— Equities today: Global stock markets were mixed overnight
— Equities Friday and weekly change: Stocks finished the week near records
— Global markets brace for data deluge and central bank crosswinds
— Hassett warns Fed against pre-setting rate path
— Two pillars under pressure: A defining week for the Fed and AI-fueled market rally
— BRICS currency rumors resurface
AG MARKETS
— USDA daily export sales: 132,000 MT of soybeans to China for 2025/26
— USDA weekly Export Sales data includes more U.S. activity for China
— U.S. sorghum exports to China show fresh momentum
— Grain markets enter a critical 40-day window
— Agriculture markets Friday and weekly change
FARM POLICY
— USDA moves to finalize major OBBBA overhaul of farm safety-net programs
— Commentary: Trump’s EPA faces a crossroads on ethanol mandates amid
rising fuel cost concerns
ENERGY MARKETS & POLICY
— Monday: Oil slips as peace talks and Fed cut loom over market
— Friday: Oil markets find two-week highs as rate-cut bets rise
— U.S. natural gas price spike deepens economic strain as winter demand collides
with record LNG exports
TRADE POLICY
— Trump’s tariff experiment shows weak early returns as manufacturing jobs fall
and trade deficit widens
— Tariff pressures build as businesses warn of higher prices and production cuts
POLITICS & ELECTIONS
— Allred abandons Senate bid, will run for House instead
— America’s economic split becomes a political risk
FOOD & FOOD INDUSTRY
— California’s Prop 12 has inflated pork prices — but mostly within California
WEATHER
— NWS outlook: Atmospheric river to usher in several days of heavy rain into
the Pacific Northwest… …Heavy snowfall expected in south-central Virginia today.
Updates: Policy/News/Markets, Dec. 8, 2025
UP FRONT Top Stories — New $12 billion aid package aims to steady farm country amid tariff strains New FBA payments would deliver $12B in support to offset weak prices and tariff-hit exports, but the aid likely falls well short of what farm-state lawmakers say is needed.— China soy auction signals room-making for new state purchases Sinograin’s 512,500-mt soybean auction is widely seen as clearing storage for a new round of state-directed buying, likely including more U.S. cargoes.— China’s surplus smashes $1 trillion barrier again — even under tariffs China’s trade surplus has topped $1T in just 11 months, as a weak renminbi and export surge outpace U.S. and European rivals despite Trump’s tariffs.— USDA releases early baseline tables, offering first glimpse at 2026 acreage outlook USDA’s early baseline pegs 2026 plantings at 95M corn, 85M soybeans, 44M wheat and 9.8M cotton acres, giving markets a first look at its long-term assumptions.— Copper’s surge poses new trouble for Trump’s inflation fight Record copper prices, driven by AI data-center demand, supply issues and tariff fears, threaten to add to inflation just as the White House battles affordability concerns.FINANCIAL MARKETS— Equities today: Global stock markets were mixed overnight U.S. futures are slightly firmer as traders look ahead to the Fed meeting and major AI-linked earnings.— Equities Friday and weekly change Stocks ended last week near records, supported by expectations of an imminent Fed rate cut.— Trump administration waives $11 million Southwest Airlines fine The administration scrubbed most of a Biden-era penalty over Southwest’s 2022 meltdown, easing the carrier’s regulatory hit.— Global markets brace for data deluge and central bank crosswinds A packed week of global inflation data, rate decisions and the Fed’s high-stakes meeting will set the tone for year-end trading.— Hassett warns Fed against pre-setting rate path NEC Director Kevin Hassett says the Fed must avoid promising a six-month rate roadmap and instead “watch the data” as it cuts.— Two pillars under pressure: A defining week for the Fed and AI-fueled market rally The Sevens Report says the rally hinges on both dovish Fed signals for 2026 and strong AI news from Oracle, Broadcom and the new ChatGPT model.— BRICS currency rumors resurface Fresh chatter about a gold-backed BRICS “UNIT” revives de-dollarization fears even as officials insist plans remain exploratory.AG MARKETS— USDA daily export sales: 132,000 MT of soybeans to China for 2025/26 China booked another 132,000 mt of U.S. soybeans, adding to evidence of a modest demand pickup.— USDA weekly Export Sales data includes more U.S. activity for China Weekly data showed additional Chinese buying of wheat and soybeans, but softer cotton and mixed meat sales into 2026.— U.S. sorghum exports to China show fresh momentum New sorghum sales and loadings suggest the U.S.–China sorghum trade channel is reopening after a long lull.— Grain markets enter a critical 40-day window Analyst Richard Crow says upcoming USDA reports, South American weather and China’s soy purchases will set grain price direction well into 2026.— Agriculture markets Friday and weekly change Grains ended the week mostly lower while cattle rallied sharply, reflecting ample stocks but firm beef demand.FARM POLICY— USDA moves to finalize major OBBBA overhaul of farm safety-net programs A final ARC/PLC/DMC rule at OMB would lock in higher reference prices and new rules starting with 2026 elections and a one-year transition in 2025.— Commentary: Trump’s EPA faces a crossroads on ethanol mandates amid rising fuel cost concerns Heritage authors urge EPA to scale back RFS volumes they say exceed the blend wall and risk higher gasoline prices with limited environmental payoff.ENERGY MARKETS & POLICY— Monday: Oil slips as peace talks and Fed cut loom over market Crude prices eased on hopes for Ukraine peace progress and ahead of a contentious Fed meeting that could reshape demand expectations.— Friday: Oil markets find two-week highs as rate-cut bets rise Oil closed last week at two-week highs as stronger odds of a Fed cut and geopolitical risks offset worries about a 2026 supply glut.— U.S. natural gas price spike deepens economic strain as winter demand collides with record LNG exports A cold snap and record LNG exports are driving U.S. gas prices higher, stoking affordability and political headaches for the White House.TRADE POLICY— Trump’s tariff experiment shows weak early returns as manufacturing jobs fall and trade deficit widens Bloomberg finds manufacturing jobs down, factory construction cooling and the trade deficit widening despite aggressive tariffs and reshoring rhetoric.— Tariff pressures build as businesses warn of higher prices and production cuts Import-dependent firms tell the New York Times Trump’s broad levies are raising costs, forcing cutbacks and prompting a surge of exemption requests.POLITICS & ELECTIONS— Allred abandons Senate bid, will run for House instead Colin Allred is dropping his Texas Senate run to challenge fellow Democrat Rep. Julie Johnson in the 33rd District.— America’s economic split becomes a political risk FT analysis warns that widening affordability gaps mean Trump’s strong macro numbers may translate into voter resentment, not electoral reward, in 2026.FOOD & FOOD INDUSTRY— California’s Prop 12 has inflated pork prices — but mostly within California Prop 12 has sharply raised prices for covered pork cuts in California while leaving most national pork markets only marginally affected.WEATHER— NWS outlook: Atmospheric river to usher in several days of heavy rain into the Pacific Northwest… …Heavy snowfall expected in south-central Virginia today. Forecasters see an atmospheric river soaking the Northwest and heavy snow hitting parts of Virginia, with localized flooding and travel disruptions possible. TOP STORIES — New $12 billion aid package aims to steady farm country amid tariff strainsReport: Trump to roll out $12 billion “farmer bridge” program as prices, exports lag The Trump administration will unveil a long-anticipated $12 billion farm aid package designed to shore up producers hit by low commodity prices and the lingering drag from tariff-driven trade disruptions, Bloomberg reported. The announcement — set for 2 p.m. ET Monday in Washington — will feature President Donald Trump alongside Treasury Secretary Scott Bessent and USDA Secretary Brooke Rollins, with farmers representing corn, cotton, sorghum, soybeans, rice, cattle, wheat and potatoes in attendance. According to Bloomberg’s reporting, the package includes up to $11 billion in one-time payments under USDA’s newly created Farmer Bridge Assistance (FBA) program, with the remaining funds going to crops not eligible under FBA. The funding comes via the Commodity Credit Corporation Charter Act and will be administered by the Farm Service Agency. The release of the aid follows months of tension in rural America over stalled Chinese purchases earlier this year, when Beijing tightened imports in response to Trump’s tariff escalations. While buying has gradually resumed — triggered by the late-October agreement between Trump and President Xi Jinping — current volumes remain far below farmers’ expectations. China has booked 2.25 million tons of U.S. soybeans since Oct. 30, Bloomberg noted, but that still trails the 12-million-ton pledge by the end of February, which Bessent recently insisted China is “on track” to meet. (Other reports now note the deadline is “the season.”) U.S. Trade Representative Jamieson Greer told Fox News on Sunday that China is “about a third” of the way through its purchase commitments for the growing season and is complying with the terms of the bilateral agreement. This confronts errant reporting last Friday about this topic. The new program revives Trump’s earlier strategy from his first term, when he deployed a total of $28 billion in trade-war payments in 2018–19. Despite those efforts, the conflict delivered lasting shifts: Chinese buyers deepened reliance on Brazil, and U.S. farmers lost significant market share even as global soybean demand accelerated.Farm finances remain strained. Even with a recent uptick in soybean futures on improved trade sentiment, prices are hovering near 2020 lows, and producers face climbing input costs — fertilizer among them. Earlier this year, USDA rolled out a separate Emergency Commodity Assistance Program, authorized by Congress Dec. 21, 2024, with more than $9 billion already paid out. Monday’s announcement comes at a politically sensitive moment, with rural frustration rising and Republican lawmakers urging faster relief before the 2026 midterms. Trump had previously floated using tariff revenue for the package, but the rollout was delayed by the government shutdown. The administration hopes the new program will stabilize farm income, accelerate China’s purchase pace, and reassure growers that Washington is prepared to intervene again if markets fail to recover. But farm-state lawmakers note needed farmer aid approaches $50 billion. Comments: The package, $11 billion for mainstream crops, is below the $12 billion and $18 billion Trump provided in the last trade war with China. Farm-state lawmakers will be pressured to provide more aid to boost the relatively stated administration package. Some observers are surprised big-news Trump did not go higher in the aid amount. Efforts for a package totaling above $20 billion were defeated within the administration. Others question whether some USDA officials had a hard time reading the ag sector’s much higher aid needs. It will be interesting to see if any farm-state lawmakers join the aid entourage and also whether Trump, Bessent or Rollins says additional administration aid could come later if warranted. That would temper some of the initial disappointment that the package comes woefully short of ag sector needs. Also of note will be the payment factor and what aid levels are being distributed by crop. — China soy auction signals room-making for new state purchasesSinograin to sell 512,500 mt of imported soybeans ahead of expected government buying China’s state stockpiler Sinograin will auction 512,500 metric tons of imported soybeans — produced between 2022 and 2023 — on Dec. 11, according to a notice from the National Grain Trade Center. It is Sinograin’s first auction in three months, and the size of the sale is drawing market attention. Reuters reports that analysts view the relatively large volume as a likely signal that Beijing is clearing storage space for upcoming state-directed soybean purchases. The move comes as China prepares for a heavier U.S. buying program under the latest trade commitments, increasing expectations that additional auctions or reserve rotations may follow. Comments: This and additional information over the weekend compares with some errant reports last week about China’s purchases of U.S. soybeans and its purchase commitments. — China’s surplus smashes $1 trillion barrier again — even under tariffsExport wave accelerates as China outpaces U.S., Europe and key manufacturing rivals China has crossed a historic threshold for the second year in a row, booking more than $1 trillion in trade surplus — and doing it in just 11 months, despite the drag from President Trump’s tariff measures. China’s customs agency reported the country’s accumulated surplus reached $1.08 trillion through November, up nearly 22% from a year earlier. China’s November surplus alone was $111.7 billion, its third-largest monthly total ever, underscoring the global scale of its export competitiveness. Tariffs hurt U.S. sales — but China offsets elsewhere. Trump’s tariffs caused China’s exports to the United States to fall nearly 20%, yet Beijing simultaneously cut American imports — particularly soybeans — by almost the same rate. China still sells three times as much to the U.S. as it buys, a gap that has remained largely intact despite policy friction. Chinese firms have also used assembly shifts to Southeast Asia, Mexico, and Africa to route finished products into the U.S., partially sidestepping tariffs. Global flood of exports hits Europe, Japan, South Korea. China’s export machine is sweeping across global markets:• Cars, solar panels, and electronics are surging into Southeast Asia, Africa, Europe, and Latin America.• Industrial giants like Germany, Japan, and South Korea are losing customers as Chinese producers undercut them.• Factories in Indonesia and South Africa have scaled back or shut down as they struggle with price competition. China now exports more than twice as much to the European Union as it imports, widening a politically sensitive trade imbalance. Weak renminbi turbocharges competitiveness. A dominant driver of the export surge is China’s weak currency, which has fallen sharply relative to the euro and other major currencies. EU Chamber president Jens Eskelund says the renminbi is undervalued by 30% or more against the euro, making it “exceedingly difficult, if not impossible” for European manufacturers to compete — even under optimal policy conditions. Combined with deflationary pressures at home, Chinese goods are becoming systematically cheaper relative to Western products. A surplus bigger than the U.S. after world wars. As a share of national output, China’s factory-goods surplus now exceeds: • U.S. surpluses after World War II, when competitors were in ruins• U.S. surpluses during World War I, when America supplied civilian goods while Europe was at war China’s surplus now amounts to more than a tenth of its entire economy — a historically unprecedented scale for a peacetime industrial power. IMF review and growing calls for currency adjustment. The International Monetary Fund is in Beijing this week for its annual review and is expected to issue preliminary findings on Wednesday. A rising number of business leaders, economists, and even former Chinese central bank officials are urging Beijing to allow the renminbi to appreciate, which would:• Lower import prices (e.g., gasoline, wines, cosmetics)• Boost household purchasing power• Support China’s weak domestic consumption But it would hurt exporters by reducing the renminbi value of their dollar earnings — a politically risky move given the millions of jobs tied to manufacturing. Geopolitics and export power. China’s enormous trade surplus continues to:• Fund technological development• Strengthen China’s ability to support authoritarian allies like Russia, North Korea, and Iran•Increase global concern about Beijing’s influence over supply chains and emerging economies Even so, Chinese leaders insist that foreign governments should not turn to protectionism, with Xi Jinping arguing that industrial restructuring — not tariffs — is driving today’s trade frictions. A long-term shift ahead? Some Chinese economists argue that Beijing must eventually rebalance toward domestic consumption, even if that means allowing the surplus to shrink — or turn negative. “For China to expand domestic demand, it is necessary to minimize the trade surplus,” said Zhang Jun of Fudan University, adding that China may one day need to consider running a trade deficit to support consumers. For now, though, China’s export juggernaut remains unmatched — and increasingly central to the global economic landscape. — USDA releases early baseline tables, offering first glimpse at 2026 acreage outlookShutdown delays push projections to December, with markets parsing initial assumptions USDA on Friday (Dec. 5) published its “early release” tables (link) that form part of its annual long-term baseline projections normally issued each February. The agency typically posts these preliminary projections in November, but this year’s federal shutdown pushed the timeline back. Because USDA never released an October WASDE, analysts instead used the November WASDE as the starting point for constructing the baseline. The early tables outline USDA’s working assumptions for 2026 plantings: 95 million acres of corn, 85 million acres of soybeans, 44 million acres of all wheat, and 9.8 million acres of upland cotton. Officials emphasize these numbers are not survey-based; rather, they are part analytical outlook and part budget exercise used for long-term planning. Even so, markets will scrutinize the release closely. The early baseline provides the first formal indication of how USDA analysts are thinking about 2026 acreage competition, crop economics, and planting behavior — offering an initial framework the trade will use ahead of next year’s more detailed reports. — Copper’s surge poses new trouble for Trump’s inflation fightRecord prices, AI-driven demand, and trade fears push the metal into volatile territory Copper’s record-breaking run in London has become one of the year’s most dramatic commodity stories — and one of the most politically fraught. The red metal’s skyward climb, driven by trade-war jitters and Big Tech’s AI-era appetite for wiring and cabling, is emerging as an unexpected inflation threat just as the Trump administration faces a growing affordability crunch ahead of the 2026 midterms. Demand has surged across manufacturing, autos, and national defense, but the biggest catalyst appears to be the breakneck expansion of AI data centers, each requiring miles of copper infrastructure. Historically, spikes in copper prices — which also tend to trigger waves of scrap-metal theft — filter into inflation more slowly than oil. But they are potent: the IMF estimates that a 1% rise in copper prices can add a tenth of a percentage point to headline inflation in some countries within two years. Trade policy has added fuel to the rally. Prices jumped earlier this year as President Trump considered steep copper tariffs, then briefly fell when the administration opted against duties on raw copper. But renewed fears of 2026 levies have reversed that decline, prompting a rush to ship copper into the U.S. to beat potential tariffs and triggering what analysts describe as unprecedented distortions in global supply flows. Compounding the volatility are supply disruptions in major mining regions including the Democratic Republic of Congo, Chile, and Indonesia. With shortages mounting and geopolitical tensions growing, analysts warn that prices could remain unstable — raising a critical question for the White House: Will the inflation risk force Trump to back off new copper tariffs once again? |
| FINANCIAL MARKETS |
— Equities today: Global stock markets were mixed overnight. U.S. stock indexes are pointed to slightly firmer openings. Futures are little changed following a generally quiet weekend of news and as investors look forward to important Fed and AI events later this week.
— Equities Friday and weekly change: Stocks finished the week near records, lifted by investors’ expectations that the Federal Reserve will cut interest rates in the coming days.
| Equity Index | Closing Price Dec. 5 | Point Difference from Dec. 4 | % Difference from Dec. 4 | Weekly Change |
| Dow | 47,954.99 | +104.05 | +0.22% | +0.50% |
| Nasdaq | 23,578.13 | +72.99 | +0.31% | +0.91% |
| S&P 500 | 6,870.40 | +13.28 | +0.19% | +0.31% |
— Trump administration waives $11 million Southwest Airlines Fine: The penalty was part of a fine imposed by the Biden administration after it determined the airline had failed to provide prompt customer service and refunds to passengers in 2022.
— Global markets brace for data deluge and central bank crosswinds
Fed’s high-stakes meeting anchors a week packed with inflation reports, GDP revisions, and policy decisions
Global economic watchers face a crowded week as central banks, statistical agencies, and trade authorities across major economies release high-impact data that will shape market expectations into year-end.
Across the Asia-Pacific, the Reserve Bank of Australia is widely expected to hold rates steady despite a mild inflation uptick, while India and China issue CPI and PPI readings that will indicate whether recent disinflationary momentum has staying power. Japan’s revised GDP is forecast to show a deeper third-quarter contraction, reflecting weaker exports in the wake of U.S. tariffs. Additional sentiment and labor indicators from the region will help refine growth outlooks as regional policymakers weigh persistent global headwinds.
In Europe, a run of industrial production and inflation releases from Germany, the UK, Switzerland, and France is expected to reinforce the picture of softening activity and gradual disinflation. Brazil, confronting slightly firmer CPI, is also projected to hold rates steady as its central bank balances domestic pressures with a slower global environment.
In North America, the Bank of Canada is likewise anticipated to keep its policy rate unchanged following stronger-than-expected employment data.
But the centerpiece of the week remains the U.S. Federal Reserve’s FOMC meeting. With several key economic indicators still delayed due to earlier reporting disruptions, policymakers must make decisions with a less-than-complete dataset. Markets overwhelmingly expect a 25-basis-point rate cut on Wednesday, as the Fed weighs deteriorating labor-market signals against stubbornly elevated inflation. Chair Jerome Powell is expected to underscore the heightened uncertainty, emphasize data-dependence, and warn that no “risk-free path” exists as the central bank navigates a highly mixed economic landscape.
— Hassett warns Fed against pre-setting rate path
NEC director and leading Fed-chair contender says policymakers must “watch the data,” not signal a six-month plan
White House National Economic Council Director Kevin Hassett said Monday it would be “irresponsible” for the Federal Reserve to outline where it intends to take interest rates over the next six months, arguing that the central bank’s credibility depends on responding to incoming economic data rather than pre-committing to a path. “The Fed chair’s job is to watch the data and to adjust and to explain why they’re doing what they’re doing,” Hassett said on CNBC. “And so to say, ‘I’m going to do this over the next six months’ would be irresponsible, really.”
Hassett — a top candidate to replace Chair Jerome Powell when Powell’s term expires in May — sidestepped questions about how many additional rate cuts he expects will be warranted in 2026. “I hate to disappoint with the sort of counting of cuts, but I can say that what you need to do is watch the data,” he said.
President Donald Trump has repeatedly urged the Fed to push its benchmark rate below 2%, far lower than the current 3.75%–4% target. Powell and fellow policymakers are widely expected to deliver a 25-basis-point cut on Wednesday.
Hassett praised Powell’s leadership in building consensus inside the Federal Open Market Committee ahead of this week’s decision. “I think that Chairman Powell agrees with me on this one, that we should probably continue to get the rate down,” he said.
— Two pillars under pressure: A defining week for the Fed and AI-fueled market rally
Sevens Report warns that rate-cut expectations and AI enthusiasm face critical tests
The Sevens Report argues that the coming days mark one of the most consequential stretches of the fourth quarter, with two of the rally’s core drivers — Federal Reserve policy expectations and AI enthusiasm — facing major inflection points.
Fed: The first pillar faces its biggest test. According to the report, Wednesday’s FOMC decision is “not just about the December rate cut,” which markets overwhelmingly expect. The real market-moving variable is how aggressively the Fed signals a cutting cycle for 2026.
The rally since mid-year has been anchored in the belief that the Fed will continue easing, bringing down rates toward more “normal” levels.
If the updated dot plot shows fewer cuts — or hints at a shallower path — the Sevens Report cautions that investors would have to re-price financial conditions higher, potentially triggering year-end volatility.
Conversely, a reaffirmation of multiple 2026 cuts would reinforce one of the rally’s main pillars and extend the year-end momentum.
AI enthusiasm: Earnings and ChatGPT update in spotlight. The second pillar — AI-driven market enthusiasm — faces a trio of events that could impact sentiment:
1. Oracle (ORCL) earnings
ORCL has become the “poster child” for concerns about AI overcapacity and runaway capex. As the report notes, credit default swap spreads have widened and investors are seeking reassurance that:
• Revenue and earnings growth justify the spending surge
• Order books remain strong
• Management emphasizes returns on investment, not just expansion
A disappointing tone or weak guidance could deepen skepticism about AI infrastructure spending.
2. Broadcom (AVGO) earnings
Demand for AI chips — still the core resource constraint of the AI investment cycle — must remain visibly strong. AVGO’s forward guidance will help confirm whether hyperscaler spending is still accelerating or beginning to plateau.
3. The new ChatGPT model release
The Sevens Report stresses that OpenAI’s model update must meet or exceed the performance of Google’s Gemini 3, which it calls a “mortal threat” to OpenAI. With trillions in future capex committed to the AI race, any underwhelming performance risks cooling the enthusiasm that has powered Big Tech—and by extension the broader equity market.
A weak release would “increase AI skepticism,” the report warns, potentially creating a new source of volatility.
Bottom Line: The Sevens Report concludes that the rally can continue into year-end only if both pillars hold:
• The Fed signals additional cuts into 2026, strengthening the easing narrative.
• AI tailwinds stay intact, supported by strong ORCL and AVGO guidance and an impressive ChatGPT model update.
If either pillar falters, markets may lose their “auto-pilot” glide path into December and instead face renewed turbulence.
— BRICS currency rumors resurface
Speculation builds over gold-backed “UNIT” proposal as analysts warn of dollar implications
A new round of speculation is swirling around the long-discussed idea of a BRICS gold-backed “UNIT” currency, even as the bloc has issued no official confirmation. Analysts and major public commentators — including author Robert Kiyosaki — are amplifying rumors that the BRICS nations may soon act on proposals for an alternative trade-settlement currency aimed at reducing reliance on the U.S. dollar.
Kiyosaki reignited market chatter by declaring that a gold-anchored BRICS currency could spell “the end of the U.S. dollar,” urging investors to shift toward gold, silver, Bitcoin, and Ether. His comments revived broader questions about BRICS de-dollarization efforts that began as far back as the 2023 South Africa summit and intensified at the 2024 gathering in Russia, where leaders showcased a symbolic banknote featuring the bloc’s flags.
Just exploratory. While Russia, China, and Brazil continue pushing for alternative payment systems — such as the “BRICS Bridge” for CBDC-based settlements — officials insist that plans for a common currency remain exploratory. The proposed UNIT, developed by the International Reserve and Investment Asset System (IRIAS), would be backed 40% by gold and 60% by member fiat currencies, minted through a decentralized mechanism rather than by any single nation.
Despite renewed hype, BRICS has not endorsed UNIT as an official initiative, leaving the proposal as one of several options under consideration in the bloc’s broader effort to reduce dependence on the dollar and reshape global trade dynamics.
| AG MARKETS |
— USDA daily export sales: 132,000 MT of soybeans to China for 2025/26.
— USDA weekly Export Sales data includes more U.S. activity for China. The USDA weekly Export Sales report covering the week ended Nov. 6 included sales activity to China of 130,000 metric tons of wheat, and 232,000 metric tons of soybeans, the latter of which was known via a daily export sales announcement. The update also included net reductions of 1,909 running bales of upland cotton, when combined with exports of 6,885 running bales trims China’s outstanding sales balance to 99,675 running bales. Activity for 2025 included net sales of 36 metric tons of beef (all of which were shipped) with outstanding sales of 196 metric tons. The report also included net sales of 1,930 metric tons of pork for 2025 with exports of 2,844 metric tons puts their outstanding sales balance at 13,886 metric tons. There were also net reductions of 464 metric tons of pork for 2026, putting sales at 1,217 metric tons.
— U.S. sorghum exports to China show fresh momentum
New shipments signal potential reopening of key agricultural trade channel
There are encouraging signs on the sorghum export front, with USDA Secretary Brooke Rollins highlighting notable new U.S. agricultural sales to China. The latest deals include 123,000 metric tons of American sorghum, alongside two vessels preparing to ship additional volumes — one now loading in Corpus Christi and another staged in the Pacific Northwest, both destined for China. The National Sorghum Producers say these movements signal that the U.S./China agricultural trade channel is “beginning to meaningfully reopen, raising hopes that these shipments mark the start of a steadier, more predictable flow in the weeks ahead.”
— Grain markets enter a critical 40-day window
Richard Crow: Rising global stocks, shifting demand, and South American weather will define price direction into early 2026
Grain trader and analyst Richard Crow argues that the next 30–40 days will be highly determinative for grain markets, setting the tone well into 2026 as traders digest USDA reports, South American weather, and China’s evolving soybean purchase behavior. Futures trading involves risk of loss and is not suitable for everyone.
USDA S/D Report and demand signals. Crow expects limited U.S. supply changes in Tuesday’s USDA supply-and-demand update, but believes soybeans may reveal overstated export projections. Wheat could see confirmation of expanding global supplies, with world ending stocks possibly 15 million tons higher than a year ago.
The key milestone remains Jan. 12, when USDA publishes final crop and stock numbers — timed with clearer visibility into South American soybean and early corn production, which will heavily influence market direction.
China’s purchases and implications for U.S. soybean stocks. Crow notes that the market is now trying to interpret China’s 12-million-ton soybean purchase agreement for the current year (season) — an amount he says “most likely will never be announced.” Instead, traders will rely on basis moves and vessel loadings as clues.
With late-week sales, Crow estimates China has already booked 5–6 million tons, more than many expected for this period. However, global cash spreads will redirect other buyers toward South America, he says, implying the U.S. could see soybean ending stocks swelling into the low- to mid-400-million-bushel range.
Looking ahead, stronger forward prices and lower production costs relative to corn suggest soybean acreage could rise 3–5 million acres in 2026, Crow predicts. If production cooperates, Crow warns that next year’s soybean carryout could approach 600 million bushels. He suggests producers may want to consider forward marketing opportunities, noting that too many fixate on spot prices and “lose sight of the forward market.”
Corn: Risk of pressure if USDA doesn’t cut supply. Corn’s near-term fate lies squarely in this 40-day window. If USDA does not revise the U.S. corn crop lower, Crow sees forward values coming under pressure, with additional headwinds from wheat’s competitiveness as spring approaches.
Wheat: Big crops everywhere, weakening demand. Crow emphasizes that world wheat stocks expanded sharply thanks to strong harvests in Argentina, Canada, Australia, and other exporters. Major-shipper stocks alone may rise 15 million tons. Compounding the weight, Crow says global wheat demand is slipping as world population edges lower. With acreage largely steady, yields will dictate next year’s supply outlook.
A market driven by rising stocks — and weather that is currently favorable. The overarching theme, Crow says, is rising world grain stocks. China’s recent buying helped fuel rallies, but sustainable strength will depend on data from Jan. 12 stocks/production and the March 30 planting intentions report. Between those dates, the market will have a firm read on South American crop outcomes, and for now, weather looks favorable, he notes.
Cattle market: Volatile but supported by demand. Crow notes that cattle have recovered modestly after recent weakness, though volatility remains high. Screwworm detections in Mexico continue to push back the reopening of the U.S./Mexico cattle border — an eventual reopening would weigh on prices but would “not be a lasting break.”
For now, Crow says the cattle market is supported by strong carcass weights and no signs of consumer pullback in beef demand.
— Agriculture markets Friday and weekly change:
| Commodity | Contract Month | Closing Price Dec. 5 | Change vs Dec. 4 | Weekly Change |
| Corn | March | $4.44 3/4 | -2 1/2¢ | -3¢ (Dec) |
| Soybeans | January | $11.05 1/4 | -14 1/4¢ | -32 1/2¢ |
| Soybean Meal | January | $307.40 | -$3.80 | -$11.30 |
| Soybean Oil | January | 51.69¢ | -10 pts | -36 pts |
| SRW Wheat | March | $5.35 3/4 | -4 1/2¢ | -2 3/4¢ |
| HRW Wheat | March | $5.31 1/4 | -2 3/4¢ | +3 3/4¢ |
| Spring Wheat | March | (unch) | 0 | -5¢ |
| Cotton | March | 63.93¢ | -15 pts | -78 pts (Dec) |
| Live Cattle | February | $227.15 | +3.15 | +11.225 |
| Feeder Cattle | January | $339.05 | +2.475 | +15.075 |
| Lean Hogs | February | $82.275 | +0.425 | +1.275 |
| FARM POLICY |
— USDA moves to finalize major OBBBA overhaul of farm safety-net programs
Final rule sent to OMB would implement higher reference prices and new ARC/PLC/DMC provisions starting with 2026 elections
USDA appears to be nearing the final stage of implementing key changes to U.S. farm programs under the One Big Beautiful Bill Act (OBBBA). The Farm Service Agency (FSA) has forwarded a final rule to the Office of Management and Budget (OMB) titled “Changes to Agriculture Risk Coverage, Price Loss Coverage, and Dairy Margin Coverage Programs.”
The rule is expected to codify OBBBA’s major updates — including higher reference prices and other program adjustments that will directly influence producer benefits. FSA has already published a timeline for rolling out the new structure. Farmers will be required to make their ARC/PLC election for the 2026 growing season, while 2025 will operate under an interim approach: FSA will issue payments based on whichever program — ARC or PLC — provides the higher benefit for each eligible producer.
While many of the policy shifts have been publicly detailed for months, FSA’s action marks a critical step in the regulatory process to fully implement OBBBA’s provisions across the federal farm safety-net system.
— Commentary: Trump’s EPA faces a crossroads on ethanol mandates amid rising fuel cost concerns
Heritage Foundation authors argue the agency is poised to raise gasoline prices by enforcing ethanol quotas far above what the fuel market can safely absorb
President Trump has promised lower energy costs, yet his Environmental Protection Agency is preparing to finalize decisions that analysts say will push gasoline prices higher. The agency’s latest proposal stems from the long-running political collision between Midwestern corn-state interests and refiners strained by federal ethanol mandates.
The commentary in the Wall Street Journal (link), authored by Mario Loyola and Derrick Morgan of the Heritage Foundation, argues that the U.S. ethanol sector — now a $34 billion industry — continues to exist largely because of what they call a “hidden federal subsidy”: the Renewable Fuel Standard (RFS). The mandate requires refineries to blend fixed volumes of ethanol into the gasoline supply, volumes they say the EPA has set well above what the U.S. fuel market can absorb.
An alleged mandate detached from market reality. The authors note that Congress originally designed the RFS assuming U.S. gasoline consumption would reach 150 billion gallons annually. That would have made a 10% ethanol blend (E10) compatible with a 15-billion-gallon ethanol mandate. Instead, consumption has plateaued closer to 139 billion gallons, meaning the practical “blend wall” caps feasible ethanol use around 13.9 billion gallons — far below current EPA requirements.
Despite this mismatch, the EPA not only insists refiners buy at least 15 billion gallons of ethanol for 2026–27, it also proposes making them retroactively absorb exempted volumes from previous years. According to the authors, this approach is legally questionable and openly acknowledged by the EPA to raise fuel costs.
Economic and environmental tradeoffs. Loyola and Morgan argue that the RFS provides little environmental benefit while imposing substantial economic and ecological costs. They highlight:
• Higher pump prices driven by compliance burdens on refineries.
• Potential engine damage from ethanol concentrations exceeding what many vehicles are designed to handle.
• The diversion of land “the size of Michigan” to corn grown for fuel rather than food or habitat.
They assert that the RFS has become a system for managing political grievances rather than an environmental program.
A possible exit ramp for the EPA. While Congress is unlikely to repeal the RFS, the authors contend that the EPA already possesses authority — under post-2022 rules — to reduce annual volume mandates based on economic and infrastructure considerations. They advocate for using that discretion to lower ethanol obligations gradually until they align with the actual blend wall.
The authors’ bottom line: Given today’s established production capacity, ethanol would remain competitive at near-E10 levels even without federal mandates, they say. What it shouldn’t do, in their view, is rely on “the decrees of an agency bent on enriching [producers] at everyone else’s expense.”
Comments: Both The Wall Street Journal (especially its editorial page) and the Heritage Foundation have consistently been critical of the Renewable Fuel Standard (RFS) for well over a decade. The WSJ editorial board has been one of the most persistent national critics of the RFS since the mid-2000s. Their editorials and op-eds have repeatedly argued that:
• The RFS functions as a hidden tax on motorists.
• Ethanol mandates distort energy markets and raise fuel prices.
• The program benefits politically powerful farm states at the expense of consumers.
• Lifecycle GHG benefits of corn ethanol are overstated.
• Refiners face unfair compliance burdens, especially small refiners.
Over the past 15–20 years, the WSJ editorial page has published dozens of pieces using language similar to what appeared in the Loyola/Morgan commentary — calling the RFS “subsidy by mandate,” “political favoritism to corn,” or “regulatory distortion.”
| ENERGY MARKETS & POLICY |
— Monday: Oil slips as peace talks and Fed cut loom over market
Prospects of a Ukraine ceasefire and a divisive Fed meeting drive caution across energy markets
Oil prices fell Monday as traders balanced geopolitical uncertainty with expectations of a U.S. Federal Reserve rate cut later this week. Brent crude dropped 85 cents, 1.3%, to $62.90 a barrel, while U.S. West Texas Intermediate slid 86 cents, 1.4%, to $59.22. Both benchmarks had closed Friday at their highest levels since Nov. 18.
Analysts say the biggest wildcard remains the slow-moving Ukraine peace negotiations. Any breakthrough, they note, could sharply increase Russian oil exports and exert additional downward pressure on prices. “If there’s any kind of agreement reached in the near future on Ukraine, then Russian oil exports should increase,” said Tamas Varga of PVM.
Markets are meanwhile pricing in an 84% chance of a quarter-point Fed rate cut this week, though policymakers’ recent comments suggest the meeting may be the most contentious in years. Investors will be watching closely for clues on the central bank’s internal divisions and longer-term policy trajectory.
Geopolitics cloud supply outlook. Progress in Ukraine talks remains limited, with major disputes unresolved and U.S. and Russian officials far apart on key elements of President Trump’s proposed peace framework. Ukrainian President Volodymyr Zelenskyy is meeting European leaders in London on Monday as negotiations continue.
ANZ analysts estimate the range of potential outcomes from Trump’s push could swing global oil supply by more than 2 million barrels per day. Commonwealth Bank’s Vivek Dhar told Reuters that a ceasefire is the primary downside risk for crude, given the likelihood that Russian oil flows would expand as sanctions circumvention accelerates. Dhar expects oversupply concerns to rise and futures to gradually move toward $60 through 2026.
Sanctions shifts and supply maneuvers. The Group of Seven and the European Union are discussing replacing the current price cap on Russian crude with a full maritime services ban, a move that could tighten supply by restricting shipping and insurance access. The U.S. has also increased pressure on Venezuela, including strikes on vessels accused of drug smuggling and renewed signals of potential military action against President Nicolás Maduro.
Meanwhile, Chinese independent refiners are absorbing more sanctioned Iranian crude from onshore tanks under newly issued import quotas — helping ease a localized glut and adding another layer of complexity to global supply flows.
— Friday: Oil markets find two-week highs as rate-cut bets rise
Geopolitical tensions offset supply-glut expectations for 2026
Oil prices finished higher Friday, reaching their strongest levels in two weeks as renewed expectations for a Federal Reserve rate cut and a backdrop of geopolitical instability supported crude. Brent settled up $0.49 at $63.75, while WTI closed $0.41 higher at $60.08. Both benchmarks posted weekly gains — Brent up about 1% and WTI roughly 3%.
Traders increased wagers on a Fed rate cut at the Dec. 10 FOMC meeting following fresh inflation and consumer-spending data that signaled cooling momentum in the U.S. economy. Lower borrowing costs would bolster economic activity and energy demand, while a weaker dollar added additional support. A steadier tone in risk markets was reinforced by continued cooperation between U.S. and Chinese officials on implementing their trade deal.
Geopolitics remained a dominant driver. Little progress in U.S./Russia talks over the war in Ukraine kept expectations low for any easing of sanctions on Moscow’s oil sector. Meanwhile, President Trump’s warning that action against Venezuela’s drug-trafficking networks could begin “very soon” raised questions about potential disruptions to Venezuelan crude output.
Concerns over Russian supply were further heightened by reports that G7 and EU members are considering replacing the current price-cap system with a ban on maritime services — a step that would significantly tighten enforcement and limit Russia’s export options. Ukrainian drone strikes on Russian Black Sea infrastructure, including a Friday fire at the port of Temryuk, added to supply anxieties.
Russia attempted to reassure markets by offering India expanded and uninterrupted fuel supplies during President Putin’s visit to New Delhi. Yet Indian refiners have recently diversified toward non-sanctioned suppliers to capitalize on widening discounts. The conflicting signals underscored the market’s broader theme: persistent geopolitical risk supporting prices even as abundant supply expectations limit upside.
Overall, crude ended the week firmer but continued to trade under the shadow of market views that global supply will outpace demand in 2026, keeping rallies contained.
— U.S. natural gas price spike deepens economic strain as winter demand collides with record LNG exports
A frigid December cold snap and relentless LNG export growth are tightening U.S. fuel supplies, pushing natural gas prices sharply higher and creating a politically volatile affordability challenge for President Trump
A powerful convergence of factors — record U.S. liquefied natural gas (LNG) exports, constrained domestic supply growth, and the season’s first major Arctic cold wave — has pushed natural gas prices sharply higher, aggravating an affordability crisis already felt across much of the country.
The Financial Times reports that natural gas futures surged to their highest level in months as heating demand jumps just as export terminals along the Gulf Coast run near full capacity. The United States is now the world’s largest LNG exporter, a position that has increased geopolitical leverage but tightened the domestic market.
LNG exports now a double-edged sword. According to the FT, almost 15% of U.S. natural gas production is leaving the country as LNG, a structural shift that was barely imaginable a decade ago. While LNG sales have boosted U.S. energy companies and strengthened Washington’s hand in Europe and Asia, high utilization of export terminals leaves little slack when domestic demand spikes.
Pipeline operators and utilities warn that during sustained cold snaps, the U.S. system becomes less flexible — meaning price spikes ripple quickly into household heating bills and industrial energy costs.
Cold weather shock hits at the worst possible time. The surge comes as millions of Americans confront rising energy, food, and housing expenses. The early-winter Arctic blast has magnified demand for gas-fired heating in the Midwest, Northeast, and Plains states. Regional utilities have begun preparing customers for higher winter bills, even as inflation pressures remain one of the public’s top concerns.
Wholesale gas prices in some hubs — including the Northeast — have already jumped multiple dollars per MMBtu as weather forecasts turned sharply colder.
A political problem for the White House. The FT notes that rising gas and electricity costs pose a mounting political vulnerability for President Trump, who campaigned on restoring affordability and who has publicly celebrated expanded U.S. energy exports.
Democrats point to LNG exports as a “supply drain” that exacerbates domestic price spikes. Republicans counter that regulatory bottlenecks and pipeline constraints — particularly in the Northeast — are at fault. But the optics remain difficult: consumers see higher heating bills at a time when the administration is touting America’s energy dominance.
Some Trump advisers privately concede that high winter heating costs could fuel new calls for export controls or temporary limits on LNG volumes — a politically sensitive option that energy companies strongly oppose.
Industrial users sound the alarm. The FT highlights growing concerns from manufacturers, fertilizer producers, and chemicals plants that rely heavily on natural gas. Several trade groups warn that sustained price pressures could force cutbacks or production shifts overseas, echoing the competitiveness concerns seen during earlier gas-price spikes in 2021–22.
Outlook: Prices may remain volatile through winter. Analysts tell the FT that unless temperatures moderate or production jumps significantly, the combination of strong LNG exports and winter demand could keep U.S. gas prices elevated into early 2026.
Storage levels remain adequate but are declining faster than normal. Any disruption — whether from severe storms, freeze-offs in the Permian, or LNG facility outages — could swing prices sharply in either direction.
For now, the U.S. finds itself caught between two competing realities:
• A booming global LNG export market that strengthens US geopolitical power, and
• A domestic affordability crisis that threatens both household budgets and political stability.
| TRADE POLICY |
— Trump’s tariff experiment shows weak early returns as manufacturing jobs fall and trade deficit widens
Bloomberg analysis finds employment losses, fading factory construction, and a larger trade gap — even as the administration touts long-term reshoring pledges and major shifts in U.S. supply chains
President Donald Trump’s second-term bet on historically high tariff rates to force production back to the United States is delivering underwhelming early results, according to Bloomberg reporting. Despite the administration’s aggressive use of duties to compel companies to reshore, U.S. manufacturing has shed jobs in nearly every month of 2025, with total payrolls down 54,000 since the end of 2024. Output has inched up 1.6% over that period but remains below 2023 levels, Federal Reserve data show.
The factory-construction boom driven by Biden-era semiconductor and clean-energy subsidies is also losing momentum. Census Bureau data indicate that manufacturing construction spending peaked last year and then fell for seven consecutive months through August, signaling that one of the most powerful investment engines of recent years is slowing.
Trump aides insist their strategy will pay off in time and frequently cite what they portray as trillions of dollars in investment pledges for future U.S. production. A Bloomberg investigation, however, found major questions in how the administration tallies those commitments — even as the analysis acknowledged that the true figure could still be historically large.
But the standout number is the U.S. trade deficit, Trump’s original economic target. Instead of narrowing under his tariff regime, the deficit has surged more than 17% this year, reaching $889 billion through August — a widening gap that undercuts the administration’s argument that tariffs would reduce America’s reliance on foreign goods.
One notable structural change is emerging: U.S. supply chains are being rapidly rewired. Direct trade with China has fallen back to levels last seen in 2001, the year Beijing joined the WTO and triggered the “China Shock.” Analysts say this decoupling effect may prove the most lasting legacy of Trump’s tariff experiment—even if its broader economic benefits remain uncertain.
— Tariff pressures build as businesses warn of higher prices and production cuts
New York Times: Import-dependent firms say Trump’s broad levies have passed their practical limit
A growing number of American companies are warning the Trump administration that its sweeping tariffs have reached a breaking point, arguing the levies are raising consumer prices, curbing production and undermining confidence in the economy, according to the New York Times.
The pushback is coming from manufacturers, retailers, and processors whose businesses rely on foreign inputs with no U.S. substitutes — and who say tariff exemptions granted so far are too limited to offset the damage.
Factory slowdowns, rising costs, and tough choices. Chicken of the Sea International is among the most visible examples. Before tariffs took effect, the company ran its Lyons, Ga., canning plant at full speed, stockpiling months of imported tuna and ingredients. But after President Trump imposed global tariffs, costs for fish, olive oil, and steel cans surged. The inventory buffer is gone, and production has slowed to one shift, four days a week. “It is squeezing us… inevitably, I think you will see some inflation coming if we don’t see some relief pretty soon,” President Andy Mecs said.
Imports of the warm-water tuna varieties used for canning — sourced from Thailand, Vietnam, Ecuador, and Indonesia — have no domestic alternative. As Mecs put it: “It’s not like there’s just tuna swimming along in Ohio.”
Exemptions spark a flood of new petitions. Last month the administration granted limited exemptions on products not produced in the U.S., such as bananas and coffee. The decision triggered a wave of petitions from firms seeking relief on goods ranging from machinery to artificial Christmas trees.
Trade lawyers and former officials told the Times the White House appears more willing to discuss exceptions for raw materials and industrial inputs, even as it expands levies elsewhere — including new tariffs on steel and aluminum used in thousands of imported items.
Political and legal pressure mounts. The Supreme Court is expected to rule soon on whether many Trump tariffs were legally imposed under emergency economic authorities. Executives hope that if the Court reins in those powers, the administration might shift toward narrower, more targeted tariffs instead of its current broad-based strategy.
Meanwhile, internal research — including from the Federal Reserve Bank of St. Louis — shows tariff-impacted durable goods prices have “increased notably,” contradicting administration claims that tariffs aren’t raising prices.
The Peterson Institute for International Economics estimates Trump’s exemptions so far would save a typical household just $35 a year, compared with an estimated $1,700 in additional annual tariff-related costs.
Companies say tariffs ignore basic economics. Economists warn the administration is sidelining the principle of comparative advantage by taxing goods Americans cannot or will not produce. The result: firms slash jobs, cancel expansion plans, and raise prices. Holiday décor maker Balsam Brands, facing double-digit tariffs on goods like pre-lighted artificial trees — items that have never been made domestically — raised prices more than 10%, cut 10% of its workforce, and canceled new investments. Its U.S. sales are down 8% this year, compared with double-digit growth in Europe and Australia.
White House sees no need for a strategic shift. Despite corporate alarm, the administration has shown little interest in a broader retreat from tariffs. Officials argue the economy’s strength, stock-market gains, and foreign investment pledges justify their confidence in the strategy. Former Trump trade official Kelly Ann Shaw put it bluntly: recalibrations may occur at the margins, but they do not signal a “pivot.”
What Comes Next: Businesses hope exemptions will expand. Others pin their hopes on a Supreme Court ruling that forces a rethinking of tariff policy. But for now, Trump continues to champion tariffs as central to U.S. economic and geopolitical strength — even as companies warn that the costs are piling up fast.
| POLITICS & ELECTIONS |
— Allred abandons Senate bid, will run for House instead
Texas Democrat pivots as Senate primary field shifts and prepares challenge to Rep. Julie Johnson
Former Rep. Colin Allred (D-Texas) announced he is ending his Senate campaign and will instead run for the U.S. House, a shift prompted by rapid changes in the state’s Democratic primary landscape. The move comes as Rep. Jasmine Crockett (D-Tex.) signals she will enter the Senate primary against state Rep. James Talarico, reshaping the field Allred once sought to lead.
Allred will now run for his former political home: Texas’s 33rd District. In doing so, he is preparing to challenge incumbent Rep. Julie Johnson (D-Tex.), setting up a competitive intraparty contest in a safely Democratic seat.
— America’s economic split becomes a political risk
FT analysis: Widening divides on income, prices, and opportunity threaten to turn Trump’s strongest card into a 2026 midterm liability
The Financial Times expands on a theme increasingly evident in recent polling and market commentary: the U.S. economy, long viewed as one of President Donald Trump’s central political strengths, is now showing fractures that could materially weaken Republicans ahead of the 2026 midterms.
Divergence is key. While headline indicators remain solid — low unemployment, cooling inflation earlier in the year, and resilient consumer spending — the FT underscores that the lived economy is diverging sharply between America’s high-income households and everyone else. That divergence is reshaping voter sentiment.
A two-track economy deepens. According to the FT reporting, affluent Americans continue to benefit from rising financial-asset values, AI-driven productivity gains, and elevated returns on savings — reinforcing economic optimism among the top third of households.
But lower- and middle-income Americans are confronting a very different reality:
• Persistent food inflation and record-high protein prices
• A housing market frozen by high mortgage rates
• Rising auto insurance and medical costs
• Credit-card balances at all-time highs, with delinquency rates climbing
• Slowing wage gains relative to costs
This split means that macro aggregates no longer reflect voter experience. Households earning under ~$75,000 — the majority of swing-district voters — tell pollsters they feel they are in recession, even as GDP grows.
Why it matters for Trump. The FT frames the risk succinctly: the economy is no longer a uniform political asset for Trump. Instead, it is becoming a point of dissatisfaction among key constituencies he needs:
• Working-class suburban voters
• Rural households stressed by high input costs and weak commodity prices
• Young families locked out of homeownership
• Seniors squeezed by rising healthcare bills
Republican strategists tell the FT that the administration’s tariff strategy — popular among some manufacturing and farm groups — is also driving up the price of everything from durable goods to electronics. If inflation flares again in early 2026, the political damage could be substantial.
A messaging problem: “Good numbers, bad feelings.” The FT notes that the White House continues to point to strong macro data, but voters increasingly report that their personal economic conditions are diverging from the national narrative. This mismatch is allowing Democrats to argue that Trump’s policies favor corporations and asset-holders while leaving working families exposed to higher prices and borrowing costs.
Even some Republicans concede that the administration’s gains on growth and reshoring are being overshadowed by frustration over affordability. As one aide put it to the FT: “If people don’t feel better off, the numbers don’t matter.”
Midterm outlook. The FT concludes that Trump’s challenge is not recession — it is resentment. The widening economic divide threatens to energize Democratic turnout, especially among younger and lower-income voters, while softening enthusiasm among the GOP’s swing-district base.
Unless affordability improves decisively in the next 6–9 months, the FT suggests the economy could shift from a traditional electoral advantage for Trump to the defining vulnerability of the 2026 midterms.
Link to Inside Elections outlook for House races via The Week Ahead item.
| FOOD & FOOD INDUSTRY |
— California’s Prop 12 has inflated pork prices — but mostly within California
Bacon, chops and other “covered” cuts have risen sharply in the state, while the rest of the country has seen far milder effects
California’s Proposition 12 — the landmark animal-welfare law governing sow-housing standards for pork sold in the state — has produced exactly what many analysts predicted: a significant jump in retail prices for certain pork cuts in California, especially bacon, ribs and loins. But the broader takeaway is more nuanced. The price impacts have been overwhelmingly regional, with California absorbing the bulk of the increase while most U.S. states have seen little change directly attributable to Prop 12.
A noticeable price shock where the law applies. Since implementation and court-cleared enforcement began, retail data show a clear trend: pork prices in California have risen faster and higher than those in the rest of the country.
• USDA and industry data indicate that covered pork products surged by nearly 19% year-over-year in California at one point in 2025.
• Some individual cuts experienced even sharper increases, with analysts estimating that pork loins rose more than 40%.
• Bacon, one of the most closely watched items, has consistently carried a substantial premium in California — reportedly as much as 46% higher than comparable bacon products sold elsewhere in the country.
Consumption patterns have shifted accordingly. With fewer compliant hogs and higher retail prices, California’s share of national fresh-pork demand has fallen, mirroring the supply-chain adjustments required to meet the law’s standards.
Limited spillover beyond California. Despite fears of a nationwide price shock, the evidence points to relatively minimal impacts outside California. Economic modeling had long suggested that if only a single state adopted these standards, national price effects would be modest. Post-implementation data largely confirm this.
Other U.S. regions have not experienced the same price spikes in bacon, chops or ribs. Wholesale and retail pork markets in the Midwest, South and East Coast have moved primarily in response to general inflation, feed costs, labor, and export demand — not Prop 12.
This regional divide is rooted in the structure of the law: Prop 12 applies only to whole uncooked pork cuts sold in California, regardless of where the hogs are raised. Ground pork, sausages, hot dogs, deli meats and other processed products are exempt, limiting the law’s reach and insulating national price averages.
Why the price gap exists. Producers and packers serving California must either invest in compliant sow-housing systems or segregate Prop 12-compliant product through the supply chain. Those changes come with costs:
• Reduced barn efficiency and sow density
• Higher labor and transportation requirements
• Slower supply-chain throughput
• Fewer integrated systems willing to dedicate animals exclusively for the California market
Some producers simply opted out of supplying California, tightening available supply and raising prices for those who remained in the compliant channel.
The Bottom Line: California consumers are paying more for bacon and other fresh pork products as a direct result of Prop 12. The law’s effects are real, measurable and concentrated. But the feared nationwide spike never materialized. Instead, the impact is sharply regional, largely limited to California’s retail market, and focused on the specific cuts covered by the regulation.
| WEATHER |
— NWS outlook: Atmospheric river to usher in several days of heavy rain into the
Pacific Northwest… …Heavy snowfall expected in south-central Virginia today.
