Will Congress Do Another Farmer Aid Package This Spring?
USDA farm income update shows pain in farm sector | U.S./Argentina trade deal details
| LINKS |
Link: Video: Wiesemeyer’s Perspectives, Feb. 1
Link: Audio: Wiesemeyer’s Perspectives, Feb. 1
| Updates: Policy/News/Markets, Feb. 6, 2026 |
| UP FRONT |
TOP STORIES
— Will Congress do another farmer aid package this spring?
A supplemental spending bill is the most realistic vehicle for additional aid, but “aid fatigue,” strengthened reference prices under OB3, and Senate 60-vote math make a broad bailout unlikely. A narrower, targeted, and offset package tied to disaster framing or bipartisan trade-offs is more plausible.
— U.S. farm income slips again in 2026 as safety net swells
USDA sharply downgraded 2025 income, resetting expectations for 2026. Net farm income dips slightly next year, but only because government payments surge under OB3. Livestock receipts fall, working capital erodes, and debt hits a record — underscoring rising financial strain beneath headline stability.
— USTR, Argentina finalize beef-focused trade deal
The U.S. grants Argentina an 80,000 mt beef TRQ at a reduced tariff, while securing regulatory streamlining and market access commitments from Buenos Aires. The agreement also tightens third-country safeguards and expands cooperation on critical minerals and energy. U.S. cattle groups remain wary of added import competition.
— FDA issues EUA for Ivomec against New World Screwworm
FDA authorized ivermectin injectable for preventive use at key cattle management points to combat NWS infestations. The move provides producers another tool to limit potentially severe economic and animal health impacts if outbreaks occur.
— RFK Jr. pushes beef-focused nutrition message at CattleCon
HHS Secretary Robert F. Kennedy Jr. urged expanded domestic beef production and championed meat-centered dietary guidance, aligning federal nutrition messaging with cattle industry priorities and reinforcing protein’s prominence in updated dietary guidelines.
FINANCIAL MARKETS
— Equities today
Dow up ~650 points on earnings rebound; global markets mixed. Limited economic calendar due to shutdown-delayed jobs report.
— Equities yesterday
Major indices fell Feb. 5, with the Dow down 1.2%, Nasdaq off 1.59%, and S&P 500 down 1.23%.
— Bitcoin slides below $60,000
Bitcoin has fallen by more than half from its October peak above $126,000. Strategy (MSTR), heavily leveraged to Bitcoin, faces mounting unrealized losses, raising liquidity questions amid broader risk-off sentiment.
AG MARKETS
— Cotton AWP falls
Adjusted World Price drops to 49.78 cents/lb, triggering a 2.22-cent LDP — the lowest AWP level since September 2020.
— Agriculture markets yesterday
Corn, soybeans, and wheat futures rose; soybean meal gained; soybean oil slipped. Cotton fell. Live and feeder cattle dropped sharply; lean hogs edged lower.
FARM POLICY
— farmdoc: Crop safety net payments outpace losses
A Feb. 5 farmdoc daily analysis by Carl Zulauf, David Orden, and Gary Schnitkey finds 21st-century safety net payments have frequently exceeded market losses and weakened countercyclicality. Payments now often offset — or surpass — downturn losses, raising structural policy concerns amid current aid debates.
ENERGY MARKETS & POLICY
— Friday: Oil markets pause as U.S./Iran talks loom
Crude prices steady but on track for weekly losses as traders weigh diplomatic risks against oversupply concerns. Strait of Hormuz exposure remains central.
— Thursday: Oil slides nearly 3%
News of U.S./Iran talks reduced immediate supply fears, trimming geopolitical premiums. Stronger dollar, trade shifts, and rising output add downward pressure.
— Year-round E15 push faces mid-February test
Rep. Randy Feenstra (R-Iowa)-led council races to meet a Feb. 15 House deadline, but Senate support remains uncertain. A supplemental spending bill may be the most viable legislative vehicle.
TRADE POLICY
— European Parliament weighs February vote on U.S./EU trade pact
EU lawmakers resume work on the Turnberry deal but add a security “off-ramp” allowing tariff suspensions if U.S. actions threaten EU territorial integrity. Vote possible Feb. 24, with full Parliament consideration in March.
FOOD POLICY & FOOD INDUSTRY
— FAO: Global food prices extend five-month slide
January marked the fifth consecutive monthly decline in global food prices. Dairy and sugar led the drop; record 2025 cereal output and rising stocks help stabilize markets despite pockets of strength in vegetable oils and rice.
— Bloomberg exclusive: Health group urges FDA to name more outbreak-linked companies
STOP Foodborne Illness filed a citizen petition urging FDA to disclose more company and brand names tied to foodborne illness outbreaks, challenging current confidentiality interpretations and calling for expanded transparency under public health authority.
WEATHER
— NWS outlook
Clipper system to bring snow, wind, and dangerous cold to the Great Lakes and Northeast. Heavy Pacific Northwest rainfall expected Saturday. Warmer-than-average temperatures persist across much of the West and Plains.
| TOP STORIES — Will Congress do another farmer aid package this spring? A supplemental is a plausible vehicle — but “aid fatigue,” higher reference prices in OB3, and Senate math could keep any new package narrow, offset, and politically conditionedWashington is still circling the question many producers and lenders care about most heading into spring: whether Congress will add another round of ad hoc farm assistance to a supplemental spending measure that could move in February, March, or April.The near-term backdrop matters. The Trump administration is already moving a $12 billion “Farmer Bridge Assistance” effort, with USDA publicly signaling it is not planning additional aid beyond that package. At the same time, senior agriculture Republicans have been candid that if Congress wants more help — especially disaster-style add-ons — it likely needs a separate legislative vehicle, potentially a supplemental appropriations bill, because the main funding deal didn’t carry it.Why a supplemental is the most realistic path. If a new farm aid package happens this spring, a supplemental spending bill is the cleanest “train” because it can bundle multiple urgent priorities (disaster, defense, border, or other time-sensitive needs like the push for year-round E15) and give leadership a reason to swallow a politically awkward add-on.That said, even farm-state advocates concede the calendar has already been crowded by FY 2026 funding fights, including a DHS extension dynamic that has consumed negotiating bandwidth. In other words: a supplemental could become the opportunity, but not necessarily the priority.The “aid fatigue” problem is real — and it changes the shape of any deal. Multiple rounds of multibillion-dollar aid — spanning both the Trump administration and Congress — have created what some Hill observers describe as “aid fatigue”: a growing resistance among fiscal hawks and even some agriculture allies to another large, broadly distributed check.Practically, “aid fatigue” doesn’t mean “no aid.” It means:• Tighter targeting (e.g., disaster-specific or region/crop-specific),• More offsets (finding pay-fors),• More policy strings (eligibility, payment limits, compliance).OB3 reference price hikes cut both ways. A key argument against another ad hoc package is that Congress already leaned into the “permanent safety net” in the One Big Beautiful Bill Act (OB3) by raising statutory reference prices and extending/adjusting commodity programs, which increases the likelihood and size of PLC/ARC payments when triggered. Farm commodity lobbyists have been signaling a version of this logic: if the standing safety net is stronger, the case for repeated ad hoc assistance weakens. The catch is timing — higher reference prices and program mechanics help most when payments actually materialize, while farm financial stress is often a cash-flow-now problem. That gap is exactly why the administration framed the current bridge aid as short-term relief while OB3 provisions take hold.Senate math is the real choke point. Even if House Republicans decide they want another package, any supplemental that moves in the Senate will almost certainly run through the 60-vote filibuster threshold. That means a GOP push would likely need at least several Democratic votes, which changes the policy center of gravity.That dynamic is already visible in the posture-taking around what “another package” would look like. For instance, House Ag Committee Democrats have floated a much larger $17 billion concept, signaling that if Democrats are providing decisive votes, they may seek to reshape the package (scope, targeting, offsets, or add-ons beyond row crops).On the Republican side, figures such as Sen. John Boozman (R-Ark.) and Sen. John Hoeven (R-N.D.) have pointed to the need for a separate vehicle (like a supplemental) to advance additional assistance — implicitly acknowledging that the politics and parliamentary options are constrained.So what are the odds?Base case (most likely): No big, broad new bailout this spring. The administration’s stance that it is not planning more beyond the $12 billion bridge package raises the bar for Congress to “pile on” quickly.More plausible than a giant package: a narrower add-on folded into a supplemental if:• it is framed as disaster recovery or a clearly documented regional/crop crisis,• it includes offsets or budget guards,• it is paired with something Democrats want (or is structured to attract them).Least likely: a large, broadly distributed “everyone gets a check” program — the classic casualty of “aid fatigue,” OB3’s strengthened reference prices, and Senate vote math.What to watch between now and April• Vehicle formation: signs leadership is assembling a true supplemental (not just extensions/patches). • Bipartisan contours: whether Senate Democrats signal openness and what they demand in return (scope, offsets, policy riders).• Commodity vs. disaster framing: commodity-income arguments may run into the “OB3 already fixed this” rebuttal; disaster framing is often more politically durable. • USDA posture on “bridge” sufficiency: whether USDA messaging stays firm that the current package is the final word — or begins to hint Congress needs to act. Comments: This week’s USDA farm income update (see next item) certainly gives the pro-aid crowd ammo. But another report from farmdoc daily (see Farm Policy section) gives fodder to those citing aid fatigue. Meanwhile, a significant boost for domestic consumption of soybeans and corn is possible if (1) China purchases more U.S. soybeans this season following President Trump’s request to Xi Jinping, and (2) if China fulfills their 25 MMT marketing year commitments ahead. Further domestic use increases could come if (3) year-round E15 for corn is approved and (4) if coming EPA decisions on the RFS for 2026 and 2027 and (5) implementation of the 45Z program, including Sustainable Aviation Fuel (SAF) results in domestic use increases for corn and soybeans. — U.S. farm income slips again in 2026 as safety net swellsSharp 2025 downgrade reshapes outlook; government payments cushion falling receipts and rising debt USDA’s first look at 2026 farm income shows U.S. net farm income dipping to $153.4 billion, down slightly from a sharply revised $154.5 billion for 2025 — and dramatically lower than the $179.8 billion USDA projected for 2025 just last September. That $25.3 billion downgrade to 2025 fundamentally resets the sector’s trajectory heading into 2026. Net cash farm income tells a slightly different story. It is forecast at $158.5 billion in 2026, up from $153.9 billion in 2025 — but that 2025 number itself reflects a nearly $27 billion cut from the September outlook. Cash receipts slide, especially in livestock. A key pressure point remains farm receipts. USDA projects 2026 cash receipts at $514.7 billion, down 2.7% from 2025 and well below prior projections. Crops:Crop receipts rise modestly to $240.8 billion in 2026.Corn receipts are expected to increase by $2.0 billion (3.3%), largely on higher sales volumes.Soybean receipts remain flat year over year.Wheat receipts fall slightly due to lower quantities sold. Livestock and animal products:Total animal receipts drop sharply to $273.9 billion, down 5.8%.Lower prices for milk and eggs drive much of the decline.Cattle and calves remain a relative bright spot, with receipts expected to continue rising. Notably, 2025 livestock receipts were already revised lower from September estimates, compounding the pressure. Government payments surge in 2026 under expanded safety net. The biggest swing factor for 2026 is federal support. Direct government payments are forecast at $44.34 billion, up sharply from $30.54 billion in 2025. The main driver: expanded safety net programs under the One Big Beautiful Bill Act (OBBBA).Price Loss Coverage (PLC) payments jump to $13 billion, compared to just $245 million in 2025.Agriculture Risk Coverage (ARC) payments hold near $1.93 billion.Supplemental and ad hoc disaster payments rise slightly to $23.88 billion.Conservation payments increase modestly.Dairy Margin Coverage flips from a net producer pay-in in 2025 to positive payments in 2026. However, even 2025 government payments were revised sharply lower from September, largely due to smaller-than-expected disaster payments. Without the safety net expansion, the 2026 outlook would appear significantly weaker. While these ratios remain far below the 1985 farm crisis peaks, they have risen three consecutive years — an unmistakable sign of tightening financial conditions. For 2026:Farm income holds relatively steady — but only because of higher government payments.Livestock receipts weaken.Working capital erodes.Debt climbs to new highs. The safety net is doing heavy lifting. Without it, the financial picture would be flashing far more warning lights — and that reality is already fueling renewed calls on Capitol Hill for additional support as lawmakers try to prevent broader financial stress in the farm sector. — Office of the United States Trade Representative, Argentina finalize beef-focused trade dealNew 80,000 mt TRQ for Argentine Beef — U.S. industry weighs market access trade-off The U.S. and Argentina formalized a trade agreement that reshapes beef market access, easing tensions that surfaced last year over expanded Argentine imports. Link to agreement text. Link to tariff schedule. U.S. Trade Representative (USTR) Jamieson Greer joined Argentina’s Foreign Affairs and Trade Minister Pablo Quirno in announcing the deal, which centers on a new tariff-rate quota (TRQ) for Argentine beef entering the U.S. Key beef provisions• 80,000 metric tons annually of Argentine beef eligible under the TRQ• Tariff rate capped at no more than 10% (reportedly it will be 9%) within the quota• Imports above 80,000 mt subject to a 26.4% tariff• TRQ split into quarterly allocations of 20,000 mt The additional 10% tariff previously applied to Argentine beef has been lifted Of note: Beef quota discrepancy. The U.S. agreed to expand its tariff-rate quota for beef, but the agreement text and the Argentine statement outline different increases. According to the agreement, the TRQ will increase from 20,000 metric tons to 80,000MT and the beef will enter the U.S. “on a first-come, first-served basis in four 20,000 metric ton quarterly tranches.” In its statement, the Argentine statement says the U.S. will grant Argentina an “unprecedented expansion to 100,000 tons for preferential access” for beef, increasing the quota by “80,000 tons in 2026, which, added to the 20,000 tons already available to our country, will allow for an increase of approximately $800 million in Argentine beef exports.” President Trump in October said his administration was considering an expansion of Argentine beef imports to help the Latin American country. The plan drew swift criticism from many lawmakers, who urged the administration to reconsider. For Argentina, the deal provides more predictable — and competitively priced — access to the U.S. market, though the 26.4% over-quota tariff remains a significant backstop. U.S. gains: market access and regulatory commitments. In exchange, the U.S. secured commitments aimed at improving access to Argentina’s market. Argentina’s food safety authority, Servicio Nacional de Sanidad y Calidad Agroalimentaria (SENASA), must ensure import registration procedures for U.S. beef and pork are: • Timely• Transparent• Non-discriminatory• Free of unnecessary delays U.S. exporters will also be allowed to submit a single application covering multiple products, a move designed to streamline regulatory hurdles. Industry friction remains. The expansion of the Argentine beef TRQ was a major friction point for the U.S. beef industry when first proposed. Domestic producers had argued that additional imports could pressure prices, particularly amid volatile cattle supplies and tightening margins. Whether Argentina’s regulatory concessions will be enough to offset those concerns remains uncertain. Much will depend on how effectively Argentina implements its procedural commitments — and how quickly U.S. beef and pork exporters can translate access into measurable sales. In short, the agreement creates clearer two-way access, but it does so by increasing import competition — a trade-off that will likely keep U.S. cattle groups watching implementation closely. U.S./Argentina pact tightens third-country rules, expands critical minerals cooperationSPS disciplines, GI protections and rules-of-origin safeguards paired with new investment framework on energy and mining The new U.S./Argentina trade agreement includes robust “third-country” guardrails designed to prevent outside nations from benefiting indirectly from bilateral preferences — while also deepening cooperation on critical minerals and energy investment. Third-country provisions On sanitary and phytosanitary (SPS) measures, Argentina committed to ensure its standards remain science- and risk-based and do not function as disguised trade barriers. The agreement also bars Buenos Aires from committing to adopt or maintain SPS measures with a third country if those measures would violate its obligations to the United States. The pact further addresses geographical indications (GIs) — a longstanding friction point between the United States and the European Union. Argentina agreed that U.S. exporters may use a GI term if it lacks a specific quality, reputation or characteristic essentially attributable to its geographic origin. The deal also specifies that U.S. market access for certain meats and cheeses — including black forest ham and parmesan — “shall not be restricted.” Like many recent U.S. bilateral agreements, the deal includes a rules-of-origin safeguard to prevent third countries or third-country nationals from capturing benefits intended for the two parties. The text states that if benefits are found to be accruing “substantially” to outside countries, either party may establish rules of origin necessary to ensure the agreement’s advantages flow primarily to the United States and Argentina. Critical minerals and energy investment The agreement also establishes a framework to expand U.S. investment across Argentina’s critical minerals and energy sectors. Argentina agreed to allow and facilitate U.S. investment in exploring, mining, extracting, refining, processing, transporting, distributing and exporting critical minerals and energy resources — on terms no less favorable than those granted to domestic investors. On the U.S. side, institutions such as the U.S. Export-Import Bank and the U.S. International Development Finance Corporation will consider supporting financing in key Argentine sectors, in collaboration with private-sector partners and consistent with applicable law. Separately, Argentina’s Foreign Ministry announced a parallel framework agreement with Washington specifically focused on strengthening cooperation in critical minerals — underscoring both governments’ interest in securing supply chains and reducing exposure to geopolitical market distortions. Taken together, the deal not only reinforces bilateral trade disciplines but also positions Argentina as a more integrated partner in North America’s evolving critical minerals and energy strategy. — FDA issues emergency use authorization for Ivomec to combat New World ScrewwormAgency says ivermectin injectable may help prevent costly NWS infestations in cattle when used at key management points The U.S. Food and Drug Administration has issued an Emergency Use Authorization (EUA) for Ivomec (ivermectin) injectable solution for the prevention of infestations caused by New World screwworm (NWS) larvae — a parasitic threat that can rapidly devastate cattle operations if left unchecked. The FDA concluded that, based on currently available scientific evidence, it is reasonable to believe Ivomec may be effective in preventing myiasis — the painful and potentially fatal infestation caused when NWS larvae burrow into open wounds. When the product can be used. Under the EUA, Ivomec injectable may be administered:• Within 24 hours of birth• At the time of castration• When a wound appears These are the highest-risk windows for screwworm exposure, as the pest targets fresh tissue. The agency said the known and potential benefits of the product outweigh its known and potential risks under emergency conditions. Why this matters. The New World screwworm is caused by the larval stage of Cochliomyia hominivorax, a flesh-eating fly that lays eggs in open wounds of warm-blooded animals. Once hatched, larvae feed on living tissue — unlike typical maggots that consume dead matter — leading to rapid tissue destruction, secondary infection, weight loss, and in severe cases, death. The U.S. eradicated screwworm decades ago through sterile fly release programs, but outbreaks in neighboring regions have periodically raised concerns about reintroduction. An active response is critical because even limited spread can disrupt cattle markets, animal movement, and trade flows. Management implications for producers. For cattle operations, particularly in southern border states or high-risk zones, the EUA provides an additional preventive tool alongside:• Vigilant wound inspection• Fly control measures• Biosecurity protocols• Prompt veterinary reporting of suspicious lesions Early intervention is key. Once larvae infest tissue, treatment becomes more intensive and animal welfare concerns escalate quickly. Economic stakes. Screwworm outbreaks historically have resulted in:• Production losses from decreased weight gain• Increased veterinary costs• Quarantine restrictions• Potential export disruptions Given tight margins across the cattle sector, especially amid volatile feed and labor costs, preventive tools can reduce exposure to larger systemic losses. — RFK Jr. pushes beef-focused nutrition message at CattleConHealth and Human Services Secretary urges producers to expand U.S. beef supply and champions meat in the federal diet At the 2026 National Cattlemen’s Beef Association CattleCon in Nashville this week, Secretary of Health and Human Services Robert F. Kennedy Jr. focused much of his remarks on beef, meat consumption and nutrition policy — underscoring a broader push to place beef and other animal proteins at the center of American diets. Championing meat in the food pyramid: Kennedy highlighted the recently released 2025-2030 Dietary Guidelines for Americans, which now place protein — including beef — at the top of the food pyramid, a reversal from prior guidance that emphasized carbohydrates at the base. He framed this change as part of a larger effort to get Americans eating “real food,” saying meat, chicken, eggs and animal protein are now top priorities for health. Personal endorsement of beef: During his fireside chat with NCBA President Buck Wehrbein, Kennedy shared his personal experience with meat-centric eating, noting that he eats beef daily — often twice a day — and credits that diet with dramatic improvements in his health markers. Call to expand U.S. beef production: Kennedy urged cattle producers to grow beef herds, warning that the national herd has shrunk substantially since the early 1970s and that slaughtering breeding cows threatens future supply. He said the nation needs more beef production domestically and not increased reliance on imports to meet consumer demand. Reversing past policy: References from producers at the event stressed that the administration’s nutrition policy shift — moving meat back to the center of dietary guidance — represents a major win for cattlemen, especially after earlier federal proposals sought to downplay meat in favor of plant-based proteins. Overall, Kennedy’s remarks at CattleCon placed a strong emphasis on beef as both a nutritional good and a strategic agricultural product, aligning federal dietary messaging with the interests of cattle producers and the broader livestock sector. |
| FINANCIAL MARKETS |
— Equities today: U.S. Dow is currently up around 650 points as markets bounce following a decent night of earnings. Global markets were muted as AI spending fears weighed on stocks while concerns about disruption in sectors including software and data services continued. In Asia, Japan +0.8%. Hong Kong -1.2%. China -0.3%. India +0.3%. In Europe, at midday, London +0.2%. Paris flat. Frankfurt +0.7%. The jobs report scheduled today has been delayed till Wednesday thanks to the government shutdown, so the economic calendar today only contains Consumer Sentiment (E: 55.5), Consumer Credit (E: $8.4B) and one Fed speaker, Jefferson (12:00 p.m. ET). Barring any major surprises, none of those events should move markets.
— Equities yesterday:
| Equity Index | Closing Price Feb. 5 | Point Difference from Feb. 4 | % Difference from Feb. 4 |
| Dow | 48,908.72 | -592.58 | -1.20% |
| Nasdaq | 22,540.59 | -363.99 | -1.59% |
| S&P 500 | 6,798.40 | -84.32 | -1.23% |
— Bitcoin slides below $60,000
Strategy faces mounting pressure as crypto selloff deepens
Bitcoin has plunged from its October 2025 record above $126,000 to near $60,000, wiping out post-election gains despite President Trump’s pledge to make the U.S. a global crypto leader. The drop comes amid broader risk-off sentiment, tech layoffs, and the unwinding of crowded trades.
The biggest casualty: Strategy (MSTR). The firm holds 713,500 BTC at an average cost of $76,000 and reported a $17.5 billion unrealized loss in Q4. Shares fell 17% Thursday, with further downside risk if Bitcoin weakness continues.
Executive Chairman Michael Saylor has long called volatility a “gift,” but investors are now watching liquidity closely. Strategy could sell Bitcoin, issue equity, or refinance debt — each carrying risks.
For now, markets are testing whether this is another crypto shakeout — or a more serious stress event for leveraged Bitcoin exposure.
| AG MARKETS |
— Cotton AWP falls. The Adjusted World Price (AWP) for cotton is at 49.78 cents per pound, effective today (Feb. 6), down from 50.23 cents per pound the prior week. The result is an LDP of 2.22 cents per pound. The AWP is the lowest since it was at 49.77 cents per pound the week of Sept. 11, 2020.
— Agriculture markets yesterday:
| Commodity | Contract Month | Closing Price Feb. 5 | Change from Feb. 4 |
| Corn | March | $4.35 | +5 1/2 cents |
| Soybeans | March | $11.12 1/4 | +20 cents |
| Soybean Meal | March | $303.20 | +$7.00 |
| Soybean Oil | March | 55.65 cents | -1 point |
| SRW Wheat | March | $5.35 1/4 | +8 1/2 cents |
| HRW Wheat | March | $5.38 1/2 | +8 1/4 cents |
| Spring Wheat | March | $5.71 1/2 | +5 1/2 cents |
| Cotton | March | 61.76 cents | -48 points |
| Live Cattle | April | $235.60 | -$6.20 |
| Feeder Cattle | March | $364.075 | -$6.00 |
| Lean Hogs | April | $98.375 | -7 1/2 cents |
| FARM POLICY |
— Report: Crop safety net payments outpace losses in 21st century
farmdoc analysis questions whether current support levels exceed economic need for major program crops
In a Feb. 5, 2026, farmdoc daily article Has the U.S. Crop Safety Net Become Excessive?” authors Carl Zulauf (Ohio State University), David Orden (Virginia Tech), and Gary Schnitkey (University of Illinois) examine whether federal farm support payments have surpassed what is necessary to offset market losses. Link to report.
Writing in farmdoc daily, the authors analyze nine major crops — barley, corn, cotton, oats, peanuts, rice, sorghum, soybeans, and wheat — and find that since 2000, annual market net returns averaged 4.2% below total economic cost of production, while safety net payments averaged 12.7% of costs — more than triple the level needed to cover losses.
Market returns show cyclical patterns. Using USDA Economic Research Service (ERS) cost-of-production data, the study measures market net return at harvest — excluding government payments — and finds clear multiyear cycles of positive and negative returns dating back to 1975. As illustrated in the report’s Figure 1 (page 1), market returns tend to persist year to year, creating extended periods of profitability or loss.
The authors break the 1975–2024 period into six return phases:
• Positive return periods: 1975–1980, 2007–2013, 2021–2022
• Negative return periods: 1981–2006, 2014–2020, 2023–2024
During the two recent prosperity periods (2007–2013 and 2021–2022), market returns averaged 13.2% and 16.8% of economic cost, respectively. Notably, safety net payments still averaged 9.4% and 6.8% in those high-return years, meaning support payments remained substantial even during profitable conditions (Figure 3, page 3).
Countercyclicality has weakened. Historically, crop safety net payments moved counter to market returns. Before 2007, the correlation between market net return and safety net payments was strongly negative (-0.82), meaning payments rose when returns fell. Since 2007, that correlation has weakened significantly (-0.24), indicating the safety net is now “largely not countercyclical” (page 2).
This shift is central to the authors’ concern: payments have remained elevated even when farm income conditions improved.
Loss periods now fully offset — or exceeded. During the prolonged loss period of 1981–2006, market returns averaged negative 16.2% annually. Safety net programs offset most — but not all — of those losses, leaving total returns near negative 1.7%.
By contrast, in the 2014–2020 and 2023–2024 loss periods, safety net payments more than eliminated sector losses, producing positive total returns in some cases. For 2023–2024, total return averaged 0.2% even before assuming additional Supplemental Disaster Relief Program (SDRP) Phase 2 payments. If SDRP 2 equals Phase 1 payments, safety net payments could average 11.2% annually and total returns 1.6% (page 4).
The authors argue this marks a sharp departure from earlier decades when policymakers tolerated modest sector losses.
Policy concerns and recommendations. The article raises broader structural concerns. When payments exceed losses — and continue during high-profit periods — the result may be higher land values, elevated input costs, and pressure for even larger future support levels. The authors warn this could create a “treadmill” of rising support.
They call for debate on:
• Scaling back or eliminating payments when market returns are positive
• Adjusting crop insurance subsidies via a sliding scale tied to market conditions
• Clarifying what level of average sector loss is consistent with competitive markets
• Aligning payment timing more closely with harvest conditions rather than delayed commodity program disbursements
The authors also note that potential additional ad hoc assistance for 2025 crops will serve as a key test of whether policymakers are willing to allow short-term sector losses to occur in a competitive agricultural economy (page 4).
Bottom Line: Zulauf, Orden, and Schnitkey conclude that 21st-century crop safety net payments have not only cushioned farm losses but frequently exceeded them — even during profitable years. Their analysis suggests that without reform, the structure of current support programs may impede necessary market adjustments and embed higher long-term costs into the agricultural sector.
| ENERGY MARKETS & POLICY |
— Friday: Oil markets pause as U.S./Iran talks loom
Traders brace for geopolitical signals as oversupply pressures build
Oil prices were little changed Friday as investors closely monitored high-stakes diplomatic talks between the United States and Iran taking place in Oman, with markets wary of potential supply disruptions in the Middle East.
Brent crude slipped 5 cents to $67.50 a barrel, while U.S. West Texas Intermediate fell 11 cents to $63.18. Despite the muted daily moves, both benchmarks remained on track for weekly losses — down 4.6% for Brent and 3.2% for WTI.
Market sentiment is tightly tethered to the outcome of the talks. Iran has signaled it wants discussions limited to nuclear issues, while Washington is pressing to broaden negotiations to include Tehran’s ballistic missile program and regional activities. The lack of clarity over the agenda has kept geopolitical risk premiums elevated.
Strait of Hormuz risk remains central. The stakes are high. Roughly 20% of global oil consumption transits the Strait of Hormuz — a narrow maritime chokepoint between Oman and Iran. Major exporters including Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, and Iran rely heavily on this corridor for crude shipments.
Any escalation could threaten flows through the strait, tightening supply and lifting prices. Conversely, a diplomatic breakthrough could ease tensions and remove some of the geopolitical premium embedded in current prices.
Weak fundamentals weigh on outlook. Even as traders track geopolitical developments, analysts increasingly point to soft underlying fundamentals. Broader market weakness and expectations of global oversupply have pressured crude throughout the week.
Saudi Arabia cut its official selling price for Arab Light crude to Asia for March to around a five-year low — the fourth consecutive monthly reduction — reinforcing concerns about demand softness.
Some analysts note that recovering output in Kazakhstan and rising global supply could push prices significantly lower, potentially toward $50 per barrel by the end of 2026.
In short, while geopolitical headlines dominate near-term trading, the broader supply-demand balance suggests the oil market may remain under pressure unless tensions in the Gulf materially escalate.
— Thursday: Oil slides nearly 3% as U.S./Iran talks ease immediate supply fears
Diplomacy tempers risk premium, but Hormuz exposure and shifting global trade flows keep volatility elevated
Oil prices dropped sharply Thursday as markets reacted to news that the U.S. and Iran agreed to hold talks in Oman, easing immediate concerns about disruptions to Iranian crude supplies.
Brent crude settled down $1.91, 2.75%, at $67.55 per barrel, while U.S. West Texas Intermediate fell $1.85, 2.84%, to $63.29.
Traders cautiously welcomed the diplomatic opening, trimming the geopolitical risk premium that had built into prices earlier in the week. Still, skepticism remains high over whether negotiations will yield a durable agreement. Analysts noted that ongoing U.S. military deployments in the region and the potential for talks to collapse continue to inject volatility into the market.
The strategic importance of the Strait of Hormuz looms large — roughly 20% of global oil consumption passes through the narrow waterway, which serves as a key export route for Iran and major OPEC producers including Saudi Arabia, Iraq, Kuwait, and United Arab Emirates.
Heightened uncertainty has fueled increased hedging activity. January saw record trading volumes in WTI Midland Houston contracts as investors sought to lock in prices amid Middle East tensions and shifting crude flows. Broader commodity markets were also pressured by a stronger U.S. dollar and sharp moves in precious metals, dampening overall risk appetite.
Meanwhile, global trade patterns are shifting. Discounts on Russian crude to China widened to record levels this week as sellers cut prices to offset the anticipated loss of Indian buyers. A newly announced U.S.–India trade agreement includes India halting purchases of Russian oil — a move that could further reconfigure global supply routes.
Looking ahead, analysts expect Argentina’s energy trade surplus to expand in 2026, supported by rising output from the Vaca Muerta shale formation, adding another variable to an already fluid global crude landscape.
— Year-round E15 push faces mid-February test in House, uncertain path in Senate
Feenstra-led council races to meet Feb. 15 legislative deadline as bipartisan tensions and refinery politics loom
The newly formed E15 Rural Domestic Energy Council is up against a tight timeline as lawmakers work to revive year-round E15 sales after the provision was stripped from the Fiscal Year 2026 funding package in late January.
Co-chaired by Rep. Randy Feenstra (R-Iowa), the council has now held two meetings and is aiming to meet a Feb. 15 deadline to propose legislation, with House consideration targeted by Feb. 25. Feenstra said members are working to align strategy and finalize next steps, signaling confidence the group can stay on schedule.
Still, the process has been marked by partisan friction. No Democrats attended the most recent meeting, despite five Democratic lawmakers previously requesting inclusion on the council. Republicans have also declined to release a full membership list, though Rep. Dusty Johnson (R-S.D.) said 25 members were present.
The bigger hurdle may lie in the Senate. Sen. Chuck Grassley (R-Iowa) told reporters that any year-round E15 agreement will need backing from senators representing states with small independent refiners — a key constituency wary of expanded biofuel blending mandates. Grassley also suggested standalone legislation is unlikely to succeed, predicting that E15 language would need to be folded into a broader legislative package.
Attention is now turning to a potential supplemental FY 2026 spending request as the most viable vehicle for moving an E15 provision through Congress — underscoring that while momentum is building in the House, the legislative math in the Senate remains far more complicated. Republicans would need at least 7 Senate Democrats to go along, but election-year issues could make that a hurdle, including a coming push for additional farmer aid.
| TRADE POLICY |
— European Parliament weighs February vote on U.S./EU trade pact
Lawmakers add security “off-ramp” allowing EU to suspend tariff cuts if U.S. threatens territorial integrity
The European Parliament’s International Trade Committee (INTA) could vote later this month on the pending U.S./European Union trade agreement, after lawmakers agreed to resume work on the so-called Turnberry legislative proposals.
Committee Chair Bernd Lange said Feb. 4 that a majority of members backed restarting deliberations, with a potential committee vote scheduled for Feb. 24. The trade package stems from last summer’s agreement between President Donald Trump and European Commission President Ursula von der Leyen, reached in Turnberry.
However, lawmakers inserted a new safeguard: amendments would allow the EU to suspend tariff preferences if the U.S. threatens the “essential security interests” of the Union or its member states — including territorial integrity.
Greenland tensions prompted pause. The committee had paused consideration of the deal amid controversy over President Trump’s proposal to acquire Greenland and subsequent tariff threats tied to military exercises in the Danish territory. Although Trump later said he reached an understanding with NATO Secretary General Mark Rutte regarding Arctic security and mineral access, Greenlandic and Danish officials disputed aspects of the claimed agreement.
Following those developments, Parliament leadership signaled it would resume reviewing the trade pact — now with added security conditions.
What the trade deal would do. The European Commission’s proposals would:
• Eliminate EU tariffs on U.S. industrial goods.
• Provide preferential EU access for select U.S. seafood and agricultural products.
• Reinstate tariff-free treatment for U.S. lobster exports.
Additional amendments under consideration would:
• Introduce an 18-month “sunset clause” if no broader agreement is reached.
• Cap U.S. steel and aluminum tariffs at 15 percent.
INTA must approve the legislation before it proceeds to a full Parliament vote, expected during the March 9–12 session if the committee advances it. Even if Parliament approves, negotiations with the European Commission and member states would follow, with final approval required from all three bodies.
The emerging structure underscores growing EU insistence on linking trade liberalization to geopolitical stability — particularly in light of transatlantic tensions surrounding Arctic security and tariff policy.
| FOOD POLICY & FOOD INDUSTRY |
— FAO of UN: global food prices extend five-month slide in January
Dairy, sugar lead declines as record 2025 cereal output and rising stocks temper supply concerns
World food prices fell for a fifth consecutive month in January, reinforcing a steady cooling trend from the historic highs reached in 2022, according to the United Nations’ Food and Agriculture Organization.
The FAO’s Food Price Index — which tracks monthly changes in a basket of internationally traded commodities — averaged 123.9 points in January. That marked a 0.4% decline from December and a 0.6% drop from a year earlier. Prices now sit 22.7% below the March 2022 peak that followed Russia’s full-scale invasion of Ukraine and the resulting supply disruptions.
Dairy leads broad-based easing. Dairy posted the sharpest monthly decline among major categories, falling 5% as cheese and butter prices retreated.
Meat prices slipped 0.4%, with lower pig meat prices offsetting gains in poultry.
Sugar declined 1% month over month and was down 19.2% from a year ago, reflecting expectations of improved global supplies and easing tightness in key producing regions.
Grains and oils buck the trend. Not all categories moved lower.
The cereal index edged up 0.2%, as stronger rice prices — supported by firmer demand — offset slightly weaker quotations for other major grains, including wheat and corn.
Vegetable oils rose 2.1%, with higher palm, soy, and sunflower oil prices outweighing declines in rapeseed oil.
Record grain output, stronger stocks outlook. In a separate supply update, the FAO raised its estimate for 2025 global cereal production to a record 3.023 billion metric tons. The upward revision reflects stronger wheat yields and improved corn prospects.
Global cereal stocks are now projected to expand in the 2025/26 marketing season, pushing the world stocks-to-use ratio to 31.8% — the highest level since 2001.
That improvement in supply buffers provides additional reassurance to markets, helping anchor prices even as weather risks and geopolitical uncertainties remain in play.
The broader takeaway: while pockets of strength persist in vegetable oils and rice, the overall tone in global food markets continues to soften — a notable shift from the volatility that dominated trade flows and food security concerns over the past several years.
— Health group urges FDA to publicly name more companies in foodborne outbreaks
Bloomberg exclusive: STOP Foodborne Illness files citizen petition challenging FDA’s trade secrets interpretation, citing public health mandate
A public health advocacy group is pressing the U.S. Food and Drug Administration to disclose more company and brand names tied to foodborne illness outbreaks — even when no formal recall has been issued — according to an exclusive report by Bloomberg.
In a citizen petition filed Thursday and shared exclusively with Bloomberg, the nonprofit STOP Foodborne Illness asked the FDA to reinterpret federal law or revise its regulations to allow broader disclosure of companies linked to outbreaks.
Under current policy, the FDA treats company and brand names as “confidential commercial information” and typically releases them only when a product recall is underway. STOP argues that the agency’s reading of the Trade Secrets Act is overly restrictive and that a company’s identity should not automatically qualify as protected information.
Sandra Eskin, CEO of STOP Foodborne Illness and a former USDA deputy undersecretary for food safety during the Biden administration, said transparency is central to consumer protection. “Disclosing the names of companies linked to foodborne illness outbreaks helps ensure accountability,” Eskin told Bloomberg.
The petition contends that case law under the Freedom of Information Act shows company names are not inherently protected commercial information, giving FDA latitude to adjust its disclosure approach. STOP is asking the agency either to issue a memorandum reinterpreting its policy or to formally revise its regulatory code.
The group also argues that the FDA’s public health obligations under the Food, Drug, and Cosmetic Act provide an alternative legal pathway to disclose company names. If consumers know which brands are linked to outbreaks, they can discard potentially contaminated products and seek medical care more quickly, the petition states.
The filing notes that the FDA has previously identified companies in outbreak investigations even without recalls — including during a 2022 E. coli case. It also points to the agency’s September 2025 pledge to increase “radical transparency” in food outbreak investigations, arguing those steps were “necessary, but not sufficient.”
STOP further contends that fresh produce presents a unique challenge. Fruits and vegetables, which were identified as significant contributors to foodborne illness in a 2022 FDA report, often have short shelf lives and may not be subject to recalls even when linked to outbreaks. Without full disclosure, the group warns, consumer confidence in fresh produce could erode.
Under federal law, the FDA must respond to a citizen petition within 180 days. While STOP’s filing does not explicitly threaten litigation, petition denials can be challenged in federal court.
The request comes as health policy remains in focus under President Donald Trump’s Make America Healthy Again initiative and HHS Secretary Robert F. Kennedy Jr.’s emphasis on overhauling American diets to combat chronic disease.
If adopted, the proposal would mark a significant shift in how the FDA balances commercial confidentiality with public health transparency during foodborne illness investigations.
| WEATHER |
— NWS outlook: Clipper system to bring snow, high winds, and dangerously cold temperatures to the Great Lakes east through the Northeast/Appalachians into the weekend… …Moderate to locally heavy rainfall expected for the Pacific Northwest Saturday… …Warmer-than-average temperatures are set to continue for the western two-thirds of the country, especially in the northern/central Plains.
