China Focuses on Yields
- China issued a major policy document outlining a plan to put greater pressure on its regions to increase grain yields.
- The government is placing greater emphasis on food security, and will form a "national food security industry belt" during the 2021-2025 period.
- Uncertainty and instability in major food exporting nations last year are blamed for the increased concerns.
- The document also added priority on the seed sector, urging faster implementation of major scientific projects in breeding.
- China will also stabilize production of soybeans and develop other edible oilseed crops under the plan.
- Despite concerns about ASF cases being seen again in some areas, the country’s hog herd is expected to recover to 2017 levels by June.
FBN’s Take On What It Means: China’s plan to connect all of the country's key grain areas is ambitious. The emphasis on new technology could lead to the adoption of genetically modified seeds among others. If the plan is successful it could have an effect on imports beyond 2022. In the near term, focus on rebuilding the hog herd will likely support increased demand for soybeans and corn.
EPA Backs Court On Exemptions
- The EPA has agreed with an appeals court's decision that cast doubt on a program that granted oil refiners exemptions to biofuel blending laws.
- The court ruled that waivers granted to small refineries after 2010 should only be approved as extensions.
- The decision mandated that an exemption must exist for the agency to be able to extend it.
- Most recipients of waivers in recent years have not continuously received them year after year.
- The policy could dramatically limit the number of exemptions given to refiners under the program going forward.
- EPA will not act on any pending exemption petitions until after a Supreme Court review of the case, which is expected by July.
FBN’s Take On What It Means: The exemption program has been controversial and continues to pit two strong lobbies against one another. The EPA’s decision marks a significant change from the previous administration. Barring a reversal from the Supreme Court, this announcement favors the biofuel industry and can be expected to help margins and maintain ethanol demand.
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