USDA’s Fordyce: Funding Constraints Make Additional Aid Unlikely Beyond $12 Billion Package

UP/Norfolk Southern seek STB approval for first U.S. transcontinental railroad

---

Link: USDA’s SDRP2 Pricing Choice Raises Fresh Questions Over Accountability
Link: Video: Wiesemeyer’s Perspectives, Dec. 13
Link: Audio: Wiesemeyer’s Perspectives, Dec. 13

---

Updates: Policy/News/Markets, Dec. 19, 2025

UP FRONT BRIEFS— Congress & calendar: Congress heads out starting today (Senate back Jan. 5, House Jan. 6). Key data and market closures ahead: Q3 GDP (Dec. 23), Durable Goods (Dec. 23), U.S. markets close early Dec. 24 and shut Dec. 25; federal government closed Dec. 24–26 after President Trump granted federal workers Christmas Eve and the day after Christmas off.— USDA farm aid: Undersecretary Richard Fordyce says USDA will publish FBA per-acre payment rates next week, but he’s signaling the $12B package is likely the ceiling given limited funding (with $1B reserved for specialty crops and sugar).— Specialty crops push: A bipartisan House letter urges ag leaders to ensure fast, equitable specialty-crop relief under FBA, arguing past aid often shortchanged the sector and calling for formulas that reflect specialty-crop costs, risks, and business models.— China soy auctions: Sinograin soybean auction demand cooled sharply, selling about one-third of offered volume versus strong sell-through the prior two weeks — hinting at softer near-term buying appetite and rising price sensitivity.— CAST initiative: CAST formed an 18-member Strategic Advisory Council (chaired by Ray Starling) to map what it would take for CAST to function as a National Academy of Agriculture, with recommendations due mid-2026.— Shutdown avoidance: Senate leaders are nearing a bipartisan five-bill “mini-bus” that could fund ~85–90% of government through FY 2026, pushing the next major shutdown risk to late January for remaining agencies if the House and Trump sign off.— Bird flu vaccine funding: Moderna secured up to $54.3M from CEPI for a late-stage bird flu vaccine trial after HHS ended a much larger federal contract, with Moderna reserving 20% of capacity for lower-income countries in a pandemic.— Troop bonuses vs housing funds: The Pentagon is shifting billions from military housing-related funding to pay $1,776 “warrior dividend” checks to about 1.45M troops/reservists — drawing questions about authority and backfilling housing support.— EU support for Ukraine: EU leaders agreed to provide €90B in loans over two years via joint EU borrowing, with repayment tied to future Russian reparations, while continuing to debate potential use of frozen Russian assets.— Cannabis policy shift: President Trump ordered the administration to restart rulemaking to move cannabis to Schedule III, a change that could ease taxes (notably 280E) and expand medical research — without legalizing marijuana nationwide.— Fed chair search: Trump says he’s interviewing “three or four” candidates (including Waller and Bowman) and expects a decision within weeks, reinforcing pressure for faster rate cuts.— Japan rates & global spillovers: The Bank of Japan lifted rates to a 30-year high, nudging global yields up; guidance remained cautious, leaving markets focused on direction but uncertain on pace.— Inflation report skepticism: Core CPI cooled to a four-year low, but economists flagged odd category moves and data-collection gaps, stoking questions about reliability even as some officials welcomed the print.—USDA daily export sale: 134,000 MT soybeans to China, 2025/2026 marketing year.— Beef supply squeeze: Record beef prices persist amid the smallest herd in decades; analysts warn more processing plant closures are possible as supply tightness and disrupted Mexican imports keep pressure on the system.— River logistics: Midwest deep freeze is slowing grain barge traffic via ice buildup and low water, prompting operational restrictions in parts of the Mississippi/Illinois system.— South America weather: A wetter two-week pattern supports crop development in much of Brazil/Paraguay and boosts Argentina moisture, but saturated soils slow fieldwork and dry pockets linger in parts of NE Brazil.— Farm machinery economics: New farmdoc analysis shows big farms spend less per acre on machinery than smaller farms, highlighting economies of scale—even as per-acre costs have risen since 2021 with equipment inflation.— EU-Mercosur backlash: Farmer protests intensified as France/Italy push to delay or change the EU/Mercosur pact; Brussels is now aiming for a January signing window if member-state concerns can be resolved.— Oil market watch: Crude prices remain rangebound as traders weigh potential U.S. sanctions on Russia and Venezuelan tanker disruptions against weak price levels and supply-glut fears.— California E15: Regulators cleared a major scientific hurdle for E15, but statewide adoption still depends on rulemaking, infrastructure upgrades, and federal constraints.— Iowa biofuels: Iowa approved $4.6M for renewable fuel infrastructure projects ahead of its Jan. 1, 2026 E15 access mandate.— Permitting overhaul: The House passed the SPEED Act to streamline reviews, but the bill faces a tougher Senate rewrite—especially after offshore-wind carveouts fractured parts of the pro-reform coalition.— Trade law dispute: Sen. Ron Wyden warns USTR cannot unilaterally discard WTO MFN principles, arguing Congress controls such a shift—amid broader fights over executive trade authority.— USMCA early talks: Canada and the U.S. plan to launch formal discussions in mid-January ahead of the 2026 USMCA review, with tariffs, dairy, and critical minerals expected to loom large.— Congress staffing debate: Rep. Joe Morelle argues the post-Chevron legal landscape forces Congress to draft more precise laws and needs a major staffing boost to keep up.— Nominations: Senate confirmed a bloc of Trump nominees including CFTC chair Michael Selig, USDA food safety undersecretary Mindy Brashears, USTR chief ag negotiator Julie Callahan, and other USDA roles.— Rail mega-merger: UP and NS filed at the STB for a landmark transcontinental merger, pitching competition and service gains; the deal faces a long, high-bar review under the 2001 “enhance competition” standard.— Chesapeake Bay Bridge: Maryland approved a preferred alternative for a $15B–$18B bridge replacement plan, with environmental review and federal approvals ahead and construction targeted for the early 2030s.— Weather outlook: NWS flags heavy snow risks in parts of the Great Lakes and the Cascades/Northern Rockies, plus a slight excessive-rainfall risk in the Pacific Northwest. TOP STORIES—Congress goes on break starting today with the Senate returning Jan. 5 and the House returning Jan. 6. Gross domestic product for the third quarter will be reported Dec. 23. Durable goods orders for October will be reported Dec. 23. U.S. stock and bond markets close early on Dec. 24 and will remain closed on Christmas Day, Dec. 25. The federal government will be closed Dec. 24 through Dec. 26 — federal workers are getting a Christmas gift from President Trump. The president took executive action Thursday to ensure that federal workers get Christmas Eve and the day after Christmas off from work. —USDA official signals limits on future farm aid as FBA details near releaseFordyce says funding constraints make additional assistance unlikely beyond $12 billion package A senior USDA official on Thursday played down the likelihood of another round of emergency farm aid, even as the department prepares to roll out key details of its current assistance program. USDA Undersecretary for Farm Production and Conservation Richard Fordyce told Bloomberg that the department is still on track to announce per-acre payment rates next week for the Farmer Bridge Assistance (FBA) program, but suggested the $12 billion package unveiled last week is likely the extent of what USDA can deliver. Quote of note: “We’re kind of where we are and that’s kind of going to be it — just based on dollar availability,” Fordyce said, signaling that funding constraints limit prospects for additional aid. The forthcoming crop-specific payment rates will determine how much assistance individual farmers receive under the program. Fordyce said those rates will vary by commodity and reflect differences in production costs and market prices. “They’re going to be unique to the crop, based on cost of production, based on the price of that crop,” he said. “We just don’t have enough money to pay 100% of the difference between the cost of production and the price, but we’re going to do all we can.” USDA said the $12 billion package includes $1 billion set aside for specialty crop and sugar producers. The assistance is intended to provide near-term cash flow as farmers head into financing discussions with lenders and input suppliers ahead of the 2026 crop season. USDA has indicated additional details on payment levels will be released alongside the per-acre rate announcement.Comments: Veteran farm policy watchers say they wonder if USDA Secretary Brooke Rollins will confirm what Fordyce stated. Meanwhile, farm-state lawmakers have indicated several times that they are working on additional farmer aid, and are asking USDA officials to determine how much is needed. But the last time that occurred, USDA’s answer to Congress did not match farmer needs. Note: Link to a special report on the SDRP2 pricing issue. —Lawmakers press agriculture leaders for swift, equitable aid to specialty crop growersBipartisan letter urges USDA and Congress to tailor Farmer Bridge Assistance and future relief programs to the unique risks and cost pressures facing fruits, vegetables, and other specialty crops A bipartisan group of House members is urging congressional agriculture leaders to ensure specialty crop growers receive fast and equitable access to federal farm relief, warning that past aid programs often left the sector behind despite its broad economic footprint and mounting cost pressures. In a Dec. 18 letter (link) to House and Senate Ag Committee leaders, lawmakers representing specialty crop regions called on Congress to prioritize fruits, vegetables, tree nuts, greenhouse, nursery, and floriculture producers as USDA rolls out the Farmer Bridge Assistance (FBA) Program. They emphasized that specialty crops are grown in 95% of U.S. farming counties and generate more than $75 billion annually in cash receipts, making them central to both rural economies and the administration’s “Make America Healthy Again” agenda. Specialty crop growers face many of the same — and in some cases more acute — challenges as row-crop and livestock producers, including sharply higher input costs, labor shortages, export barriers, and repeated weather disasters, the lawmakers argue. Between 2020 and 2025, growers paid roughly 25% more for pesticides, 31% more for fuel, 37% more for fertilizer, and nearly 50% more for labor, increases that were not matched by higher market prices.  Against that backdrop, the letter stresses that USDA must recognize the diversity and complexity of specialty crop operations when designing payment formulas and eligibility rules. Lawmakers point to shortcomings in earlier relief efforts — including the 2018 Market Facilitation Program and the first round of the Coronavirus Food Assistance Program (CFAP-1) — which relied on limited data and commodity-centric models that slowed or reduced aid to specialty crop producers. By contrast, the group highlights CFAP-2 as a more effective template. That program adjusted payment structures and application processes to better reflect specialty crop business models and later served as the foundation for the Marketing Assistance for Specialty Crops (MASC) program. The lawmakers argue that using a familiar, proven framework would also help USDA’s Farm Service Agency offices deliver assistance more quickly by avoiding unnecessary administrative delays. The letter specifically urges USDA to release the $1 billion currently set aside for specialty crops under FBA as soon as possible and to work closely with industry to fully assess losses from the past year. Dozens of House members from both parties signed the appeal, underscoring the breadth of congressional concern that specialty crop growers not again be sidelined as federal farm relief moves forward. —China state soybean auctions cool sharply after strong startSinograin sells less than one-third of offered volumes in latest weekly sale as buyer appetite eases Sales of state-owned soybeans in China slowed markedly in the latest weekly auction, signaling softer near-term demand after two strong weeks. China’s state stockpiler, Sinograin, sold 179,702 metric tons of soybeans, representing 32.7% of the volumes offered, according to Reuters, citing the consulting firm Mysteel. That compares with 77.5% sell-through rates in each of the two previous weekly auctions.The soybeans were sold at an average price of 3,750.83 yuan per metric ton (about $532.74/mt), with deliveries scheduled from January through late May. The supplies came from 2022 and 2023 crop inventories, the report said. The sharp drop in participation suggests crushers and traders may be comfortable with current coverage or are becoming more price sensitive as they assess domestic demand and alternative import options. Comments: If demand for auctions continues to slow, the next step is requiring firms to buy a certain amount before they can get import certificates. That’s been used in the past to clear out state-owned reserves. —CAST launches advisory council to explore National Academy rolePanel led by former USDA chief of staff will map what it would take for agriculture to gain a formal science academy by mid-2026 The Council for Agricultural Science and Technology (CAST) has created an 18-member Strategic Advisory Council to examine whether — and how — the organization could evolve into a National Academy of Agriculture, a role that does not currently exist in the U.S. The council will be chaired by Ray Starling, a former USDA chief of staff and now general counsel of the North Carolina Chamber, and is tasked with defining the structural, governance, and resource requirements for CAST to serve as a national, authoritative voice on agricultural science and technology. Recommendations are due to the CAST Board of Directors by mid-2026. CAST Chief Executive Officer Chris Boomsma said the effort reflects growing pressure on U.S. agriculture from rapid technological change, geopolitical competition, shifting consumer expectations, and food and national security risks. He argued that CAST’s nonpartisan structure, cross-sector membership, and long-standing role translating science for policymakers position it to fill a leadership gap. The advisory council brings together leaders from academia, agribusiness, government, and nonprofits, including representatives from Pairwise, CropLife America, UCLA, Syngenta, the National Council of Farmer Cooperatives, land-grant universities, and the Foundation for Food and Agricultural Research. Over the coming months, the group will meet regularly to assess what partners, governance changes, and funding models would be needed for CAST to function as a de facto National Academy of Agriculture — providing strategic foresight and trusted scientific guidance for U.S. agriculture. CAST, founded in 1972, is a 501(c)(3) nonprofit based in Ames, Iowa, that convenes experts to develop and communicate science-based information on agriculture, food systems, and natural resources. —Senate moves toward stopgap funding package to avert early-2026 shutdownFive-bill appropriations deal could cover up to 90% of government operations through FY 2026 Senate leaders are closing in on a bipartisan agreement to pass a five-bill “mini-bus” appropriations package that would fund most of the federal government through fiscal year (FY) 2026, significantly reducing the risk of a government shutdown early next year. The package would fund the Departments of Defense; Labor, Health and Human Services, and Education; Commerce and Justice; Interior; and Transportation and Housing and Urban Development. Appropriators estimate the legislation would cover roughly 85% to 90% of federal operations if enacted, pushing the next major shutdown deadline to late January for a smaller set of agencies. Passage in the Senate would still require approval by the House and President Trump. Without additional action, parts of the government would begin shutting down on Feb. 1. Last month, Trump signed a separate appropriations measure funding military construction, veterans’ affairs, USDA, the legislative branch, and the Supplemental Nutrition Assistance Program through Sept. 30, 2026 — removing a key flashpoint from earlier shutdown negotiations. Of note: If the House also approves the Senate minibus, only the Departments of Homeland Security, State, energy and water programs, foreign operations, and financial services would face a funding deadline around Jan. 30. Negotiations late this week have focused on how many amendments each party can bring to the floor. Republicans have narrowed their list to eight proposed amendments, with several potentially resolved by voice vote. Democrats initially sought votes on roughly 40 amendments but have since pared that list to about 15. Some of the remaining proposals are politically sensitive. Democrats are pressing amendments tied to Justice Department authorities and the fallout from the 2020 election investigations, while Republicans are pushing measures to strip earmarks and to remove language governing federal management of national park lands. The funding talks remain intertwined with unresolved disputes over expiring Affordable Care Act subsidies, which triggered last month’s 43-day shutdown. While the government reopened without extending those subsidies, bipartisan momentum is building in the House to force a vote on a three-year extension in January — though its fate in the Senate remains uncertain. Senators from both parties were negotiating on the floor as the chamber worked to finalize a path forward before adjourning for the year, with leadership aiming to pass the minibus and largely take a February shutdown off the table. —Moderna secures outside funding to advance bird flu vaccine after HHS pullbackCEPI steps in with up to $54 million for late-stage trial as federal support for mRNA research is cut Moderna Inc. will receive up to $54.3 million from the Coalition for Epidemic Preparedness Innovations (CEPI) to fund a late-stage clinical trial of its bird flu vaccine, filling a funding gap left after the Trump administration terminated a major federal contract. The trial is expected to begin early next year and is aimed at ultimately securing regulatory approval for the vaccine, Moderna said. The CEPI backing comes months after the Department of Health and Human Services canceled a contract worth as much as $766 million that was intended to support Moderna’s work on bird flu and other potential pandemic influenza vaccines. That decision forced the company to seek alternative funding sources for later-stage trials, underscoring broader concerns in the scientific community about the administration’s pullback from federally funded biomedical research, including studies involving mRNA technology. Under the new agreement, Moderna committed to reserving 20% of its manufacturing capacity for low- and middle-income countries in the event of a flu pandemic. Investors reacted positively to the announcement, with Moderna shares rising 2.7% in early trading Thursday, though the stock remains sharply lower for the year.While the U.S. already maintains a stockpile of bird flu vaccines, Moderna argues its mRNA platform could enable a much faster response during a pandemic than traditional vaccine technologies, which often take months to produce. —Trump redirects military housing funds to pay troop holiday bonusesPentagon shifts billions from housing aid to finance $1,776 “warrior dividend” checks, with limited pushback from GOP lawmakers President Donald Trump is redirecting money set aside for military housing to fund one-time “warrior dividend” bonuses for service members, a move that has drawn some concern on Capitol Hill but little resistance from the Republican-led Congress. Under the plan, about 1.45 million active-duty troops and reservists will receive $1,776 tax-free checks by Saturday. A Pentagon official confirmed the payments will be financed by shifting billions of dollars from funding approved in the One Big Beautiful Bill, including money originally intended to support the Basic Allowance for Housing (BAH) program. Lawmakers from both parties raised questions about the reallocation. Sen. Thom Tillis (R-N.C.) cautioned that using housing funds for bonuses is “problematic” without a clear plan to backfill the money, while Sen. Joni Ernst (R-Iowa) said Congress should be involved in authorizing such a shift. Democrats were sharper in their criticism, with Sen. Tim Kaine (D-Va.) arguing the president lacks the authority to repurpose the funds unilaterally. Still, most Republicans signaled acceptance of the move, noting the broad discretion Congress granted the Pentagon over roughly $150 billion in defense reconciliation funding. Senate Majority Leader John Thune (R-S.D.) said the department has latitude in how it uses the money, and Armed Services Chair Roger Wicker said the bonus plan was developed “in consultation with the Congress.” According to defense officials, the bonuses will cost about $2.6 billion of the $2.9 billion allocated for housing subsidies under the reconciliation law, leaving roughly $300 million for the program as originally envisioned. The payments will go to roughly 1.28 million active-duty personnel and 174,000 reservists, including some who do not currently receive housing allowances. The shift comes amid broader congressional efforts to improve service members’ quality of life. Recent defense legislation included a 14.5% pay raise for junior enlisted troops and billions for housing, childcare, and education. It also marks the latest instance of the Pentagon repurposing reconciliation funds; during the government shutdown, the department redirected $2.5 billion from the same pot to cover troop pay. —EU backs Ukraine with €90 billion loan as war drags onBrussels agrees to joint borrowing plan while sidestepping immediate seizure of Russian assetsThe European Union has struck an agreement to provide Ukraine with €90 billion ($106 billion) in loans over the next two years, following marathon negotiations among leaders in Brussels. The funding will be raised through jointly issued EU debt backed by the bloc’s common budget, marking another significant step in collective financial support for Kyiv. Under the arrangement, Ukraine would only be required to repay the loans once Russia pays reparations for the damage caused by its invasion. While the deal stops short of directly tapping frozen Russian sovereign assets, EU leaders said discussions would continue whether those funds could eventually be used to support Ukraine’s war effort and reconstruction. —Trump orders marijuana reclassification, opening door to tax relief and medical expansionExecutive action directs shift to Schedule III, reviving stalled rulemaking while stopping short of nationwide legalizationPresident Donald Trump signed an executive order directing his administration to begin moving cannabis into a less restrictive federal drug category, reviving a long-stalled regulatory process and delivering a major win for the marijuana industry. The order instructs the Justice Dept. and Health and Human Services to restart formal rulemaking to reclassify cannabis as a Schedule III substance, recognizing accepted medical uses and lower abuse potential. Marijuana is currently listed as Schedule I, the most restrictive category under federal law. Trump said the decision was driven by patient demand and medical considerations, citing chronic pain, cancer, seizure disorders and neurological conditions. The president consulted with HHS Secretary Robert F. Kennedy Jr., CMS Administrator Mehmet Oz and cannabis-industry executives ahead of the move, according to people familiar with the discussions. If finalized, rescheduling would significantly ease regulatory and financial burdens on cannabis businesses. Most notably, it would eliminate the punitive IRS Section 280E rule, which prevents companies tied to federally illegal substances from deducting ordinary business expenses. It could also accelerate clinical research and open pathways for FDA-reviewed cannabis-based medicines, potentially attracting large pharmaceutical firms. The order also signals a broader federal pivot on cannabinoids. CMS is expected to launch a pilot in April 2026 to test Medicare coverage for certain cannabinoid-derived therapies, including CBD. The White House said it will work with Congress to preserve access to some hemp-derived CBD products that could otherwise be restricted under a spending bill Trump signed in November. Trump urged lawmakers to clarify CBD’s regulatory status, potentially allowing it to be treated as a dietary supplement. Currently, Epidiolex — used to treat rare childhood epilepsy — is the only FDA-approved CBD medication. The directive does not legalize marijuana nationwide and will not take immediate effect. Cannabis would remain federally illegal even under Schedule III, leaving banking and capital-access challenges unresolved without congressional action, such as passage of cannabis banking legislation. The move nonetheless jump-starts a process first initiated under the Biden administration in 2022 that later stalled amid legal and bureaucratic delays.

FINANCIAL MARKETS

 —Equities today: Global stocks were muted after markets rallied on softer-than-expected U.S. inflation data and a boost in tech stocks. Wall Street futures were mixed after major North American markets closed up yesterday. Some U.S. tocks are ticking higher as traders gear up for the year-end stretch that typically delivers equity gains. Investors are pumping money into the market at a near-record pace as they position for lower borrowing costs, Bank of America says.

—Equities yesterday: 

Equity Index	Closing Price  Dec. 18	Point Difference  from Dec. 17	% Difference  from Dec. 17
Dow	47,951.85	+65.88	+0.14%
Nasdaq	23,006.36	+313.04	+1.38%
S&P 500	6,774.76	+53.33	+0.79%

—Trump signals imminent Fed chair decision, applauds multiple contenders

President says shortlist includes Waller and Bowman as he presses for faster rate cuts

President Donald Trump said he is interviewing “three or four” candidates to succeed Jerome Powell as Federal Reserve chair and expects to decide within weeks, underscoring his push for a more aggressive interest-rate cutting agenda.

Speaking Thursday, Trump praised several potential nominees, including Fed Governor Christopher Waller — whom he said he met again this week — and Fed Vice Chair for Supervision Michelle Bowman. He also reiterated earlier comments that National Economic Council Director Kevin Hassett and former Fed Governor Kevin Warsh remain leading contenders.

Trump said he may or may not announce the pick before year-end but emphasized the decision is coming soon. He has repeatedly argued the Fed should cut rates sharply — suggesting levels near 1% — to reduce borrowing costs, particularly mortgages.

The remarks come after the Fed cut its benchmark rate earlier this month to a 3.5%–3.75% range, marking the third consecutive reduction. The move drew three dissents, highlighting internal divisions as policymakers debate how much further rates should fall.

—Bank of Japan pushes rates to 30-year high, signals more tightening ahead

Rising Japanese bond yields ripple through global markets as investors parse cautious BOJ guidance

The Bank of Japan lifted its benchmark interest rate to the highest level in three decades, underscoring its gradual but decisive shift away from ultra-easy monetary policy and reinforcing expectations that additional increases are likely in coming months. Rising prices, driven by a relatively weak yen and dependence on imports, are transforming Japan, which for decades battled deflation.

The move sent yields on 10-year Japanese government bonds above 2% — a level not seen in years — adding upward pressure to global bond markets as investors reassessed yield differentials and capital flows. U.S. and European yields edged higher in sympathy, reflecting concerns that Japan’s long-suppressed rates are no longer acting as a global anchor.

Despite the hawkish action, the yen weakened after the decision as traders judged the BOJ’s accompanying message as less forceful than expected. Policymakers reiterated that future rate hikes would depend on sustained wage growth and durable inflation, stopping short of offering firm guidance on the pace or timing of further tightening.

Governor Kazuo Ueda emphasized that while inflation dynamics have improved, the central bank remains cautious about moving too aggressively, given lingering uncertainties around consumption and global growth. That restraint disappointed some investors who had hoped for clearer signals that Japan was entering a more rapid normalization phase.

The BOJ’s policy shift carries broad implications beyond Japan. Higher domestic yields could encourage Japanese investors to repatriate funds long deployed overseas, potentially affecting demand for U.S. Treasuries and other global assets. At the same time, a weaker yen could complicate inflation dynamics by raising import costs, adding another layer of complexity to the central bank’s balancing act.

For now, markets are left with a clear message on direction — but continued uncertainty on speed — as Japan cautiously exits an era of extraordinary monetary accommodation.

—Anomalies cloud surprise inflation cooldown

Economists flag missing data and collection gaps as core CPI slips to four-year low, raising questions about reliability

Economists greeted Thursday’s long-awaited inflation report with a mix of surprise and skepticism, as U.S. price pressures appeared to cool sharply — but under circumstances some analysts say are highly unusual.

The November consumer price index showed core inflation, which strips out food and energy, rising just 2.6% from a year earlier, the slowest pace since 2021 and below every estimate in a Bloomberg survey. The release came after weeks of controversy, including the Trump administration’s earlier decision to cite a government shutdown as justification for delaying data, President Trump’s comments dismissing affordability concerns as a “hoax,” and lingering unease following his August firing of the Bureau of Labor Statistics chief.

The anomalies were especially pronounced in categories that had long driven inflation higher. Shelter costs, which account for roughly one-third of the CPI basket, appeared to cool abruptly. Prices for airfares and apparel also declined, movements some economists said seemed inconsistent with broader cost and demand trends.

Of note: Austan Goolsbee, the Chicago Fed president who has sounded the alarm recently that inflation was running too hot, told Fox Business “there is a lot to like in this CPI report.” He added that more data that shows inflation to be moderating could put the central bank “back on the golden path, rates could come down.”

AG MARKETS

— USDA daily export sale: 134,000 MT soybeans to China, 2025/2026 marketing year.

—Bloomberg: Beef plant closures loom as U.S. cattle supply hits historic lows

Shrinking herds, halted Mexican imports and rising costs threaten processors and keep steak prices elevated

American beef processors are facing mounting pressure as cattle supplies remain far below historical norms, raising the prospect of additional plant closures and prolonging high beef prices, according to Bloomberg.

U.S. cattle placements into feedlots are expected to fall to the lowest November level since 2015, based on a Bloomberg survey of analysts ahead of a USDA report. That follows October placements — typically the strongest month — hitting a record low, underscoring the severity of the supply squeeze tied to the smallest U.S. cattle herd in more than 50 years, Bloomberg reported.

The situation has been worsened by a halt in Mexican cattle shipments aimed at preventing the spread of the screwworm pest. The disruption is especially painful for processors operating at losses and complicates President Donald Trump’s efforts to rein in record beef prices, Bloomberg said.

Tyson Foods Inc., the nation’s largest meatpacker, highlighted the strain last month when it announced the closure of a Nebraska beef plant and cut operations to a single shift at a Texas facility near the Mexican border. Industry veteran Hyrum Egbert told Bloomberg that at least one additional large plant and several regional facilities could shut over the next 18 months, with impacts likely strongest in the South — though no region is immune.

—Deep freeze disrupts Midwest grain barge traffic

Ice buildup and low water levels complicate Mississippi River operations

Extreme cold across the Midwest has created difficult conditions for grain barge movements on the Mississippi River System, with ice accumulation slowing traffic since early December, according to USDA’s Grain Transportation Report. Navigation on the Upper Mississippi River closed for the season on Nov. 25, and growing ice has since hampered movements on the Illinois River, where barges have required ice couplings since Dec. 5, according to operators. While recent warmer temperatures may ease conditions somewhat, ice formation upstream has also contributed to persistently low water levels on the Lower Mississippi River. Water at St. Louis is hovering near the low threshold at –3.2 feet, prompting at least one operator to impose draft and tow-size restrictions, even as the U.S. Coast Guard has not enacted formal low-water limits.

—South American weather pattern brings moisture relief, slows fieldwork

Frequent rains across Brazil, Paraguay, and Argentina bolster crop conditions, with regional dry pockets and planting delays persisting

World Weather Inc. said a wetter pattern over the next two weeks will broadly favor crop development across much of Brazil and Paraguay, as regular rounds of showers and thunderstorms replenish soil moisture and help sustain crops through critical growth stages. Rainfall is expected to be most persistent from Mato Grosso into Goiás and from southern Paraguay into western, central, and northern Rio Grande do Sul and Santa Catarina, leaving soils saturated or nearly saturated and likely slowing planting and other fieldwork activities.

Drier exceptions remain in central and eastern Bahia and northeastern Minas Gerais, where little rainfall is expected for most of the period. However, some timely showers forecast from Saturday into Tuesday should provide short-term relief, buying crops additional time before more serious moisture stress develops. While these rains are not expected to be heavy, they could temporarily stabilize conditions in these drier northeastern areas.

In Argentina, near-term dryness should allow a brief pickup in fieldwork before a wetter pattern takes hold starting today. Nearly widespread rain is expected from Friday through Monday, followed by multiple additional rounds of precipitation in most areas through Jan. 1. This shift will slow field operations but improve soil moisture profiles. Most Argentine crop areas already have adequate moisture to support development, though southwestern regions remain an exception, where soils are short and crop stress is likely to increase until more substantial rainfall arrives later in the forecast window.

—Agriculture markets yesterday:

Commodity	Contract  Month	Close Dec. 18	Change vs  Dec. 17
Corn	March	$4.44 1/2	+4¢
Soybeans	January	$10.52 1/4	-6¢
Soybean Meal	January	$298.40	-$0.20
Soybean Oil	January	48.11¢	-41 pts
Wheat (SRW)	March	$5.07 3/4	+1 1/2¢
Wheat (HRW)	March	$5.17	+9 1/4¢
Spring Wheat	March	$5.72 1/4	+10 1/4¢
Cotton	March	63.51¢	+8 pts
Live Cattle	February	$228.40	-$1.15
Feeder Cattle	January	$340.275	-$1.25
Lean Hogs	February	$84.125	+$1.125

FARM MACHINERY INVESTMENT

—Economies of scale drive wide gaps in farm machinery investment

Large crop farms invest far less per acre in machinery than smaller operations, underscoring cost advantages tied to size, according to new farmdoc daily analysis.

Crop machinery investment varies sharply by farm size, with larger operations benefiting from substantial economies of scale, according to a Dec. 18 analysis by Michael Langemeier, agricultural economist with the Center for Commercial Agriculture at Purdue University, published by farmdoc daily, University of Illinois Urbana-Champaign (link).

Langemeier measures machinery investment by dividing total spending on tractors, combines, and other equipment by crop or harvested acres. Using FINBIN data from the University of Minnesota, the analysis shows that in 2024 farms with more than 2,000 acres averaged $668 per acre in machinery investment, compared with more than $800 per acre for farms under 2,000 acres. Farms with fewer than 500 acres posted the highest per-acre investment at $847.

Over the longer 2007–2024 period, the average gap in machinery investment between the smallest and largest farms was $229 per acre, a clear signal of scale efficiencies. While machinery investment per acre for large farms remained relatively stable between 2014 and 2021, it has climbed roughly 35% since 2021, reflecting rising equipment costs and strong farm incomes.

The same pattern holds for net annual machinery investment, which accounts for purchases minus sales of machinery and titled vehicles. Although large farms invest more in absolute dollars, net investment per acre declines as farm size increases. From 2007 to 2024, small farms averaged $96 per acre in net machinery investment, compared with $63 per acre for farms over 2,000 acres. Net investment closely tracked farm profitability, rising during high-income years such as 2011–2013 and 2022–2023.

Langemeier concludes that these differences translate directly into lower depreciation, interest, and machinery costs per acre for large operations. The findings underscore the importance of benchmarking machinery costs against similarly sized farms and highlight how scale continues to shape the economics of U.S. crop production.

EU TRADE POLICY

—Farm protests roil Brussels as EU leaders clash over Mercosur trade pact

Thousands of farmers block roads and confront police while France, Italy and allies push to delay or amend the EU/South America deal amid growing political and agricultural backlash

Thousands of European farmers descended on Brussels on Thursday, blocking roads with tractors and clashing with police as EU leaders met to debate the long-delayed EU/Mercosur free-trade agreement. Officers used tear gas and water cannons to disperse protesters, who hurled potatoes and eggs near EU institutions, arguing the deal would expose EU farmers to imports produced under looser environmental and animal-welfare standards.

The Commission delayed the signing to secure member-state backing, with January now the target.“We need a few extra weeks to address some issues with member states,” von der Leyen said at a briefing, adding that the Commission had consulted with its Mercosur partners and agreed to push the signing back slightly.

The agreement would phase out tariffs on most goods traded between the EU and five Mercosur nations — Brazil, Argentina, Uruguay, Paraguay and Bolivia — over 15 years, creating a market of roughly 780 million people. Supporters say it would diversify EU trade away from China and counter U.S. tariff pressure, but critics warn it could undercut EU agriculture and weaken environmental safeguards.

Opposition hardened this week as Italy joined France in questioning the timing of the pact. Italy’s Prime Minister Giorgia Meloni called signing the deal “premature” without stronger reciprocal guarantees for agriculture, while French President Emmanuel Macron reiterated that “this accord cannot be signed” in its current form and called for further negotiations in January. France, Italy and several other countries now appear to have enough weight to block approval, which requires backing from at least two-thirds of EU member states.

Of note: Meloni says will sign the Mercosur trade deal after Lula call but does not commit to a date.

Germany and the European Commission struck a different tone. Chancellor Friedrich Merz warned that delay would damage the EU’s credibility in global trade, while Commission President Ursula von der Leyen argued the pact is essential to reducing strategic dependencies and expanding the EU’s free-trade network. Despite resistance, von der Leyen and European Council President António Costa remain scheduled to travel to Brazil this weekend for a potential signing.

Latin American leaders also pressed for closure. Brazil’s President Luiz Inácio Lula da Silva and Argentina’s President Javier Milei — despite sharp ideological differences — both backed the deal, framing it as a defense of multilateral trade amid rising global protectionism. Whether that momentum overcomes European farm-sector opposition now hinges on decisions taken by EU leaders in the coming days.

ENERGY MARKETS & POLICY

— Friday: Oil prices were little changed and poised ‍for a second straight weekly decline as a potential supply glut and prospects of a Russia-Ukraine peace deal ‍offset concern over disruptions from a blockade of Venezuelan oil tankers. Brent crude futures were up 3 cents to $59.85 a barrel. West Texas Intermediate (WTI) crude ⁠was down 3 cents to $56.12.

—Thursday: Oil prices edge up as sanctions risks on Russia, Venezuela support crude

Markets weigh potential new U.S. penalties on Moscow and tanker blockades affecting Venezuelan exports, offset by subdued price levels

Oil prices ticked higher Thursday as traders balanced the prospect of additional U.S. sanctions on Russia’s energy sector against supply risks tied to a blockade of Venezuelan oil tankers. Brent crude rose 14 cents to $59.82 a barrel, while U.S. West Texas Intermediate gained 21 cents to $56.15.

Attention is centered on Venezuela, where enforcement actions against sanctioned tankers could force production shut-ins if cargoes have nowhere to go. While about 160,000 barrels per day of Venezuelan crude continue to flow to the U.S. under existing authorizations, analysts estimate roughly 600,000 bpd bound for China could be disrupted — around 1% of global supply.

At the same time, reports indicate Washington is preparing another round of sanctions targeting Russia’s energy sector if Moscow fails to reach a peace deal with Ukraine. Analysts say broader curbs on Russian oil would pose a larger threat to global supplies than the Venezuelan blockade alone. The U.S. Coast Guard has already seized one Venezuelan tanker, with sources suggesting further interdictions may follow, though enforcement parameters remain unclear.

On the supply side, persistently lower prices could also weigh on U.S. production. Bank of America estimates that if WTI averages $57 per barrel in 2026, U.S. shale output could decline by roughly 70,000 bpd, adding modest upward pressure to global balances.

—California clears scientific hurdle for E15, but full rollout remains a work in progress

Regulators find no major health or environmental risks from higher ethanol blends, yet rulemaking, infrastructure, and federal constraints will shape the pace of adoption

California has taken a significant step toward broader use of E15 ethanol-blended gasoline, but a statewide, year-round rollout is not imminent. A long-awaited multimedia evaluation by California regulatory agencies concluded that gasoline containing 15% ethanol (E15) does not pose significant additional risks to public health or the environment compared with the E10 blend that dominates the state’s fuel market today, according to reporting by Inside EPA.

The findings mark an important milestone. California has historically barred E15 sales pending a comprehensive assessment of impacts across air, water, and soil. The new evaluation clears that scientific hurdle and “paves the way” for formal rulemaking that could permanently allow E15 sales in the state. Regulators emphasized, however, that ongoing monitoring would still be necessary even if E15 is approved for broader use.

Authorization vs. implementation. While the evaluation is a positive signal for ethanol supporters, it does not amount to immediate or automatic statewide adoption. California law now allows E15 sales under a temporary authorization while regulators complete the remaining steps. Permanent approval hinges on additional review and formal rulemaking — processes that typically involve public notice, comment periods, and final approval by state environmental bodies.

In practical terms, the evaluation removes a key legal and scientific barrier, but it does not by itself finalize fuel specifications or establish a firm timeline for full implementation. State officials must still translate the findings into binding regulations before E15 can be treated as a standard gasoline blend under California’s uniquely stringent fuel rules.

Market and infrastructure hurdles. Even after permanent rules are adopted, widespread availability of E15 is not guaranteed. Retailers would need to decide whether to invest in compatible storage tanks, pumps, and labeling, depending on how regulators classify E15 under state fuel standards. Some stations may move quickly, while others could delay adoption due to cost, liability concerns, or uncertainty about consumer demand.

As a result, E15’s presence — at least initially — is likely to be uneven, concentrated in regions or retail chains willing to make early investments rather than universally available across the state.

Federal rules still in play. California’s actions also operate within the bounds of federal fuel regulations. Seasonal volatility limits under the federal Clean Air Act have historically constrained summer sales of E15, though the U.S. Environmental Protection Agency has increasingly relied on waivers and rule changes to allow year-round E15 in many states. California’s evaluation does not override those federal requirements, meaning federal policy will continue to influence how and when E15 can be sold.

A meaningful step, not the finish line. Taken together, the multimedia evaluation represents a genuine breakthrough for E15 in California — but not a final victory. The science now supports E15 as comparable to E10 from a health and environmental standpoint, clearing the path for regulators to act. Still ahead are formal rulemaking, potential legal scrutiny, retailer investment decisions, and coordination with federal fuel standards. For now, California’s move is best viewed as cautious progress rather than a rapid transition: a necessary step toward year-round E15, but one that leaves the timing and breadth of real-world implementation very much an open question.

— Iowa approves new round of biofuel infrastructure grants ahead of E15 mandate

Nearly $4.6 million awarded to expand ethanol and biodiesel access across 46 counties

Iowa agriculture officials approved 108 renewable fuels infrastructure projects statewide, directing nearly $4.6 million in cost-share grants to help fuel retailers upgrade pumps, tanks, and related equipment. The awards include roughly $4.0 million for 93 ethanol-related projects and about $600,000 for 15 biodiesel projects, spanning 46 counties and aimed at expanding access to E15 (Unleaded 88) and biodiesel.

Iowa Agriculture Secretary Mike Naig said the investments are designed to lower costs for drivers, support local jobs, and ensure fuel stations are ready to meet Iowa’s E15 Access Standard, which requires most retailers to offer E15 by Jan. 1, 2026. Iowa was the first state to adopt such a mandate, enacted in 2022.

Since the Renewable Fuels Infrastructure Program launched in 2006, the state has invested nearly $70 million in biofuel infrastructure, leveraging about $280 million in matching funds from fuel retailers. State officials said additional grant funding remains available as Iowa continues pushing to expand availability of higher-blend ethanol and biodiesel at the pump.

—House clears permitting overhaul, Senate talks loom

Bipartisan SPEED Act advances amid offshore wind fight and warnings from clean-energy advocates

The House on Thursday narrowly passed bipartisan legislation aimed at streamlining federal environmental reviews for energy and infrastructure projects, setting up a complex Senate negotiation over how far permitting reform should go.

The SPEED Act (HR 4776) cleared the chamber 221–196, marking the first major test this Congress of efforts to simplify the federal permitting process. Backed by Rep. Bruce Westerman (R-Ark.) and Rep. Jared Golden (D-Maine), the bill reflects industry frustration with what backers describe as slow, bureaucratic reviews that delay projects and investment.

NEPA changes draw fire. Environmental groups and many Democrats argue the bill weakens the National Environmental Policy Act by curbing judicial review and public input, tilting the process toward project approval even when communities could be harmed. Despite those concerns, the bill picked up limited Democratic support and now moves to the Senate, where leaders are expected to significantly revise it.

Offshore wind compromise fractures coalition. To secure House passage, GOP leaders agreed to changes demanded by Republicans opposed to offshore wind. The revised bill excludes expedited permitting for projects reopened or reconsidered between Jan. 20, 2025, and enactment — language designed to preserve the Trump administration’s flexibility to delay or cancel certain offshore wind developments. That concession prompted the American Clean Power Association to withdraw its support, with CEO Jason Grumet warning the change undercuts bipartisan, technology-neutral permitting reform and allows discrimination against clean energy projects.

Senate signals rewrite. In the Senate, Environment and Public Works Chair Shelley Moore Capito (R-W.Va.) said lawmakers would debate restoring “permit certainty” so projects approved through environmental review can proceed without fear of reversal. Ranking Democrat Sheldon Whitehouse (D-R.I.) downplayed concern over the House bill, saying Senate negotiators are drafting their own bipartisan framework drawing from multiple committees. Talks are underway among Capito, Energy and Natural Resources Chair Mike Lee (R-Utah), and Sen. Martin Heinrich (D-N.M.), with senators from both parties emphasizing the need for investment certainty tied to lawfully issued permits.

Other energy and resource bills advance. Alongside the SPEED Act, the House also passed measures on grid reliability, advance notice of power plant closures, delisting the gray wolf, and easing mining companies’ use of federal land while creating a fund to reclaim abandoned hardrock mines — underscoring a broader House push on energy, infrastructure, and natural resource policy as permitting reform heads into a tougher Senate phase.

TRADE POLICY

—Wyden pushes back on USTR, says WTO MFN policy is Congress’ call

Senate Finance Democrat warns Geneva statements can’t override U.S. trade law or constitutional authority

Senate Finance Committee ranking member Ron Wyden (D-Ore.) has told U.S. Trade Representative (USTR) Jamieson Greer that the Trump administration lacks authority to unilaterally abandon the most-favored-nation (MFN) principle at the World Trade Organization, arguing that any such shift must come from Congress.

In a Dec. 18 letter to Greer (link), Wyden criticized a recent USTR submission to the WTO General Council suggesting that MFN — designed to prevent discriminatory trade treatment — belongs to a bygone era. Wyden said Congress has explicitly embedded MFN into U.S. law and that a USTR filing made without consulting lawmakers “does not change the U.S. position.”

Wyden underscored that MFN has anchored U.S. trade policy for nearly 80 years, providing predictability for farmers, manufacturers, and service providers by protecting them from discriminatory tariffs and regulations. Abandoning MFN, he warned, would inject instability into global trade and undermine efforts to pursue meaningful WTO reforms.

The Oregon Democrat also linked the dispute to broader concerns about executive overreach on trade, noting that President Donald Trump’s claim of emergency authority to set country-specific tariffs — now under Supreme Court review — does not supersede Congress’s constitutional role. If U.S. trade policy is to change on MFN, Wyden concluded, it must be legislated by Congress, not asserted by USTR statements in Geneva.

—Canada, U.S. set January launch for USMCA review talks

Ottawa signals early start to 2026 trade pact review as tariffs, dairy rules and critical minerals loom large

Canada and the United States will begin formal discussions in mid-January to review their free trade agreement, effectively kicking off early talks ahead of the United States-Mexico-Canada Agreement (USMCA) review scheduled for 2026, according to the office of Canadian Prime Minister Mark Carney.

Carney told provincial leaders that Dominic LeBlanc, Canada’s lead on U.S.-Canada trade relations, will meet with U.S. counterparts in mid-January to launch the discussions. The update came during a meeting with provincial premiers aimed at aligning Canada’s internal position ahead of negotiations.

USMCA — negotiated by President Donald Trump during his first term — includes a clause allowing for review and potential renegotiation in 2026. The January talks suggest both sides are moving earlier to frame priorities and resolve long-running disputes.

Carney said Canada and the U.S. were close to agreements earlier this fall on sector-specific tariff relief, including for steel and aluminum, before talks were halted in October. Those discussions were derailed after Ontario ran U.S. advertisements opposing tariffs, following months of strained rhetoric — including Trump’s remarks suggesting Canada should become the 51st U.S. state.

Tariffs continue to weigh heavily on key Canadian sectors, including aluminum, steel, autos and lumber. Carney said recent trade concerns raised by U.S. Trade Representative Jamieson Greer — covering dairy market access, alcohol rules and digital services taxes — are part of a broader continental trade discussion tied to the USMCA review.

Canada is among the world’s most trade-dependent economies, with more than 75% of its exports destined for the U.S., most of them currently exempt from tariffs under USMCA. Canada is also the top export destination for 36 U.S. states, with roughly C$3.6 billion ($2.7 billion) in goods and services crossing the border daily.

The U.S. relies heavily on Canada for strategic supplies, including about 60% of its crude oil imports, 85% of electricity imports, and large shares of steel, aluminum and uranium. Canada also holds 34 critical minerals and metals of interest to the Pentagon.

Carney underscored that access to those resources should not be taken for granted. While the U.S. is a key partner, he said Canada has alternatives, including European allies, making critical minerals part of a broader negotiation over the future of the bilateral trade relationship.

Carney and provincial premiers agreed to meet again in person in Ottawa early in the new year as talks with Washington accelerate.

CONGRESS

—Democrat calls for major staffing boost as Congress adjusts to post-Chevron era

Morelle argues Supreme Court ruling forces lawmakers to write far more detailed laws — and Congress lacks the manpower to keep up

A senior House Democrat is pushing for a significant expansion of congressional staffing and resources, arguing that lawmakers are unprepared for the increased workload created by the Supreme Court’s rollback of Chevron deference. Rep. Joe Morelle (D-N.Y.), the ranking member of the House Administration Committee and a likely future chair if Democrats regain the majority in 2026, said Congress must invest more heavily in legislative staff to meet its policymaking responsibilities, according to Bloomberg Government.

Fundamental change. Morelle said the 2024 Loper Bright Enterprises v. Raimondo decision — which ended courts’ long-standing practice of deferring to agencies’ interpretations of ambiguous statutes — has fundamentally shifted responsibility back to Congress to write far more detailed and precise laws. While the ruling was applauded by conservatives seeking to curb agency authority, lawmakers in both parties have acknowledged it requires more intensive drafting and legal analysis on Capitol Hill.

To address that challenge, Morelle said Congress should “dramatically” increase Members’ Representational Allowances and committee staffing levels, allowing lawmakers to hire more policy experts capable of crafting and scrutinizing highly specific legislative language. He acknowledged the proposal is politically difficult, given Congress’s low approval ratings, but argued that inadequate staffing contributes to poor performance and public distrust.

Beyond Chevron-related fallout, Morelle said his agenda would also include tightening ethics rules — particularly around lawmaker stock trading — and increasing funding for member security. On security, he emphasized that additional resources should flow through the Capitol Police or the Sergeant at Arms, rather than individual office budgets.

Morelle said any major overhaul of congressional capacity would take years, but he plans to raise the issue in hearings if he assumes the House Administration Committee gavel in 2027, framing the effort as essential to restoring Congress’s ability to function as a coequal branch of government.

NOMINATIONS

—Senate clears key Trump USDA, USTR and CFTC nominees in bloc vote

Republicans highlight regulatory clarity and support for farmers

The Senate late Thursday confirmed a slate of President Donald Trump’s nominees to senior federal posts, approving the group under SRes 532 by a 53–43 vote. The confirmations fill several influential roles shaping agricultural policy, food safety, commodities regulation and trade.

Those confirmed include Michael Selig as chairman and commissioner of the Commodity Futures Trading Commission; Mindy Brashears as USDA undersecretary for food safety; Atella Yvette Herrell as USDA assistant secretary for congressional affairs and external relations; John Walk as USDA inspector general; and Julie Callahan as chief agriculture negotiator at the Office of the U.S. Trade Representative.

Sen. John Boozman (R-Ark.), in a statement, said he looked forward to working with Selig as Congress considers legislation to expand the CFTC’s authority, particularly over digital commodities, arguing that Selig’s leadership will be critical as the agency takes on broader responsibilities.

Boozman also highlighted the pace of confirmations at USDA, noting that the Senate has now confirmed 12 administration officials to key USDA roles this year, and said Republicans are eager to work with the new leadership to support farmers and strengthen rural America.

FOOD POLICY & FOOD INDUSTRY

—Beef costs climb to new highs as tight herds overpower policy efforts

Shrinking cattle supplies and resilient demand keep prices elevated despite import moves and rancher support

Beef prices continue to set records, underscoring how deeply constrained U.S. supply has become even as the Trump administration moves to curb costs. The average price of ground beef reached $6.78 per pound in November, up 15% from a year earlier, while steak prices climbed to $12.29 per pound, according to the Bureau of Labor Statistics.

The surge is being driven by a historically small U.S. cattle herd combined with strong consumer demand — particularly for ground beef, which remains one of the most affordable meat options. Retailers are seeing growth across both premium cuts and lower-cost proteins. Costco CFO Gary Millerchip told analysts demand is strong “in higher-cost cuts of beef” as well as in ground beef and poultry.

Beef inflation stands out even as broader price pressures ease. Overall CPI slowed to 2.7% year over year in November, down from 3% two months earlier, highlighting beef as a stubborn outlier in the grocery basket. The index for food increased 2.6% over the last year. The index for food at home rose 1.9% over the 12 months ending in November. The meats, poultry, fish, and eggs index rose 4.7% over the last 12 months. The index for nonalcoholic beverages increased 4.3% over the same period and the index for other food at home rose 1.3%. The cereals and bakery products index increased 1.9% over the 12 months ending in November and the fruits and vegetables index rose 0.1% over the year. In contrast, the index for dairy and related products decreased 1.6% over the same period.

The administration has targeted beef prices through multiple channels, including lifting tariffs on Brazilian beef, calling for a price-fixing investigation into meatpackers, and launching USDA programs to support ranchers, such as expanded grazing access. Beef imports are now projected to rise 15% this year, and USDA has increased its 2026 import forecast following the tariff rollback.

Still, relief may be limited. USDA cautioned that higher imports in early 2026 could be offset by declining Brazilian beef production, muting the impact on prices.

For restaurants, the pressure is already biting, according to Bloomberg. Darden Restaurants CFO Raj Vennam said near-record beef costs have lasted longer than expected and remain a “significant headwind,” particularly for brands like LongHorn Steakhouse, with meaningful relief unlikely until later in 2026.

TRANSPORTATION & LOGISTICS

—Rail mega-merger faces make-or-break antitrust test

Union Pacific/Norfolk Southern bid would hinge on a 2001 standard requiring deals to “enhance competition,” setting a precedent that could reshape U.S. freight rail for decades

Union Pacific Corp. filed an application today with the Surface Transportation Board seeking approval for an estimated $85 billion merger with Norfolk Southern Corp., a move that would create the first transcontinental U.S. freight railroad. According to Bloomberg reporting, the outcome hinges on whether regulators conclude the deal would “enhance competition,” a requirement embedded in STB merger rules adopted in 2001. See next item for details.

The filing will kick off a review process expected to run into 2027, drawing scrutiny and public comment from rival railroads, labor unions, shippers, and other stakeholders. Critics warn that approving the merger could accelerate industry concentration toward a duopoly — or even monopoly — after decades of consolidation that have already reduced the number of major U.S. freight railroads to six.

Opponents, including BNSF Railway, argue the STB should judge competition strictly within the rail sector, contending the rules were designed to protect rail-to-rail rivalry. Union Pacific counters that a coast-to-coast railroad would strengthen rail’s ability to compete with trucking, improve efficiency, and enhance U.S. global competitiveness.

Labor reaction is split. Two Teamsters-affiliated unions oppose the deal, warning it could shift traffic to short-line railroads and worsen congestion on main routes. SMART-TD, the largest rail union, has endorsed the merger after securing job-protection commitments. Union Pacific is expected to pursue additional concessions to win over skeptical unions, agricultural groups, and industrial shippers during the STB process.

Industry consultants say the real fight begins once the full application — likely thousands of pages — becomes public. Approval could usher in a new era of rail consolidation, potentially prompting rival carriers such as BNSF and CSX to pursue mergers of their own. If so, this case may become both the first and one of the last times the STB applies the 2001 “enhance competition” standard to a transformational rail merger, according to analysts.

—UP/Norfolk Southern seek STB approval for first U.S. transcontinental railroad

Railroads tout competition gains, shipper benefits, job protections and environmental wins in sweeping merger filing

Union Pacific and Norfolk Southern on Friday formally asked the Surface Transportation Board to approve their proposed merger, a deal the companies say would create America’s first true transcontinental railroad and reshape freight rail competition.

In a nearly 7,000-page application, the railroads laid out detailed claims that the end-to-end combination would enhance competition, improve service for shippers and deliver broad public benefits. The filing includes about 2,000 letters of stakeholder support and follows July 29, 2025, merger agreements approved by roughly 99% of voting shareholders at both companies. Link for more information.

Competition and network changes. UP and NS argue the merger would connect complementary Eastern and Western networks, converting about 10,000 existing interline lanes into faster single-line service and eliminating an estimated 2,400 railcar and container handlings and 60,000 car-miles per day. Only three customer locations out of more than 20,000 would remain served by a single carrier, the companies said. To address pricing concerns, the railroads pledged to keep all gateways open on commercially reasonable terms and to introduce “Committed Gateway Pricing” to streamline interline rates.

Shipper, economic and environmental benefits. The companies project the combined railroad would divert roughly 2 million truckloads annually from highways to rail, easing congestion and lowering emissions. They say underserved “Watershed” markets between East and West would gain single-line rail access for the first time, potentially shifting more than 100,000 carloads of freight from road to rail. The merged network would span about 50,000 route miles across 43 states, serving more than 100 ports and 10 international gateways.

Jobs, safety and investment. Union Pacific and Norfolk Southern pledged to protect all existing union jobs, add about 900 net new union positions within three years of closing, and achieve any efficiencies only through attrition. Average rail compensation, including benefits, is cited at about $160,000. The companies also highlighted safety gains at both railroads and submitted a joint safety integration plan to the Federal Railroad Administration. They expect to invest about $2.1 billion in incremental capital and generate $133 million in annual capital synergies.

Next Steps. The transaction is subject to STB review and ongoing oversight if approved. The companies said they expect the merger to close by early 2027.

—Maryland clears key hurdle for $15B–$18B Chesapeake Bay Bridge replacement

State transportation board backs preferred design promising congestion relief, wider lanes, and major economic impact, with construction targeted for the early 2030s

Maryland has taken a major step toward replacing the aging Chesapeake Bay Bridge, with the Maryland Transportation Authority (MDTA) Board unanimously approving a preferred multibillion-dollar alternative after years of study. Board members selected “Alternative C,” calling it the most affordable option and the least environmentally damaging among seven proposals.

The plan calls for building two new four-lane bridge spans just south of the existing crossings — replacing the eastbound two-lane span built in 1952 and the westbound three-lane span opened in 1973. Construction would occur in phases, beginning with a new eastbound bridge, followed by demolition of the old span and construction of the westbound replacement.

Cost estimates range from $14.8 billion to $16.4 billion without a shared-use pedestrian and bicycle path, and from $16.1 billion to $17.6 billion if that path is included. Funding would come from a mix of state and federal dollars, along with toll revenue.

Transportation officials say the new bridges would significantly increase capacity, add full shoulders for emergency access, and eliminate routine traffic backups on nonsummer weekdays and eastbound summer weekends — a chronic problem for travelers heading to Maryland and Delaware beach destinations. The project also includes widening U.S. Route 50 to eight lanes near the bridge approaches to improve safety and traffic flow.

While the new bridges won’t reduce the height that unnerves some drivers, they will increase vertical clearance to 230 feet from the current 186 feet, allowing larger cargo ships and cruise vessels to reach the Port of Baltimore. MDTA officials say the clearance is critical to keeping the port competitive and aligns with plans for rebuilding the Francis Scott Key Bridge.

According to MDTA estimates, the project could generate $17 billion to $23 billion in economic activity, support more than 60,000 construction-related jobs, and produce up to $6 billion in wages.

Next steps include release of a draft environmental report in January, followed by public hearings in February. Federal approvals are expected in late 2026. If the timeline holds, final design work would begin later that decade, with construction potentially starting by summer 2032.

WEATHER

— NWS outlook: Heavy snow over parts of the UP and northern LP of Michigan and Lakes Erie/Ontario coastline… …Heavy snow for the Cascades and Northern Rockies…

…There is a Slight Risk of excessive rainfall over parts of the Pacific Northwest on Friday.