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New National ‘Report Card’ Shows Public Schools Are Failing in One Huge Way

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Students often face punishment from parents when they get a bad report card. But what happens when our school system gets one?

The latest national “report card” is out, and it shows that our schools are failing Americans when it comes to science education. These most recent data come from the 2019 National Assessment of Educational Progress (NAEP) science assessment. 

The Nation’s Report Card just came out for 2019 science:

4th Grade: 36% proficient
8th Grade: 35% proficient
12th Grade: 22% proficient

— Corey A. DeAngelis (@DeAngelisCorey) May 25, 2021

Just 36 percent of 4th graders were at least “proficient” in science in 2019. Meanwhile, only 35 percent of 8th graders were proficient, and, most worryingly, just 22 percent of 12th graders tested at or above a proficient level in science. These numbers are all essentially unchanged or marginally worse than the same figures in 2015, suggesting no improvement or progress has been made on this front.

Image Credit: Nationsreportcard.gov

These findings are more than just an embarrassment for those who run our nation’s educational systems. They serve as yet another reminder that the public education system, where roughly 90 percent of students are enrolled, isn’t working. Indeed, a perusal of the report card’s sub–data shows that while results across the board aren’t great, public school students’ test scores are significantly lower than students enrolled in Catholic private schools, for one example.

It also proves that simply pouring more taxpayer money into the public education system does not advance results. 

Despite conventional wisdom, we have not actually “defunded education.” As the Reason Foundation’s Corey DeAngelis notes, “The United States currently spends over $15,000 per student each year, and inflation-adjusted K-12 education spending per student has increased by 280 percent since 1960.”  

But it’s all for naught. 

Economic research shows no clear correlation between public education spending and outcomes. If throwing more taxpayer money at the problem could accomplish anything, we wouldn’t have such abysmal results.

The truth is that no amount of resources can change the structural problems facing the public school system. “Pouring more money into the same broken system won’t fix the deeper problem — government monopolies have weak incentives to cater to the needs of their customers by spending money wisely,” DeAngelis explains.

When government-run schools are the only option, those schools have little incentive to improve. In contrast, school choice policies that give American families more options empower them to choose the public school, charter school, private school, or homeschooling option that best suits their needs. 

And families having options fosters a competitive system that can actually deliver results. Schools that perform well will attract more students (and thus more money), while those that underdeliver will bleed students and money. Over time, this will lead to the rise and expansion of effective schools and educational options and the demise of inefficient, broken ones. 

It’s no coincidence that research has consistently shown that school choice initiatives can raise test scores, increase parent and student satisfaction, and improve graduation rates. Unless we want our nation’s school system to keep getting bad report cards, something has to change.

Like this story? Click here to sign up for the FEE Daily and get free-market news and analysis like this from Policy Correspondent Brad Polumbo in your inbox every weekday.

WATCH: The Fight for School Choice (During COVID-19 and Beyond)

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Originally Appeared Here

Cooling economy a worry

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Federal Reserve officials are just as worried about an inflation rate that runs too cold as one that runs too hot.

While rising prices are in the spotlight now as the economy reopens and demand surges, the longer-run trends that have suppressed costs globally could re-emerge as the pandemic ends, some policymakers warn. That would make it harder to deliver on their new strategy of running inflation above their 2% target for a time in order to achieve that goal in the long term.

“We are probably more likely to be successful with the new monetary policy regime than if we didn’t have it,” Boston Fed President Eric Rosengren said in a Bloomberg News interview last week. But based on the experience of the past decade “you have to take seriously the idea that it is not going to be that easy to get 2% inflation.”

Policymakers at the central bank have been pressed in recent weeks about whether an expected spike in prices — as the U.S. rebounds from pandemic shutdowns — will be a temporary blip or something more permanent and dangerous to the economy after a wave of unprecedented monetary and fiscal stimulus over the past year.

For years, major economies including the U.S., Japan and the euro zone have struggled to raise inflation to 2% despite aggressive monetary policy actions. Aging populations, the impact of new technology and the disinflationary force of globalization are not things central banks can wish away, while rates stuck at zero — or below — telegraph the limits of their power.

Inflation pessimism shows up in forecasts released by Fed officials’ at their March meeting as well. Even after taking account of the passage last month of President Joe Biden’s additional $1.9 trillion stimulus package in their forecasts, more than half of the 18 Fed officials estimated inflation would be around 2% or slightly below next year. A majority also forecast prices in a range of 1.9% to 2.2% for 2023.

On the other hand, a sharp jump in consumer prices last month is a reminder that the risks are two-sided. Both goods and services prices rose last month with the consumer price index rising 0.6% after a 0.4% gain in February as the end of pandemic lockdowns drove up the cost of gasoline, car rentals and hotel rooms, according to data released Tuesday.

Rosengren said the Fed has never tried to shift to a new policy regime while exiting a pandemic amid aggressive fiscal stimulus. “We have to be pretty humble about how confident we are about what the inflation outcomes are going to be,” he said.

Some indicators of longer-run inflation are starting to move higher, a sign that the Fed is at least getting the public’s outlook pointing in the right direction. The rate on the five-year, forward swap contract for consumer-price inflation is hovering around 2.4%.

That is up from a low last year of just under 1% during the peak pandemic lock down period. When adjusting for measurement differences between CPI and the Fed’s preferred measure — the personal consumption expenditures price index — it puts longer-run inflation pricing in at just a touch over the central bank’s 2% target.

However, some market watchers — like Fed policymakers — see an enduring rise in inflation as a challenge.

Interest-rate derivative markets don’t foresee the Fed lifting its policy rate beyond about 2% during the upcoming tightening cycle. That’s below the 2.5% Fed officials forecast last month for their long-run policy rate. This backdrop signals that traders don’t see much risk of inflation unmooring or growth getting too robust before the next downturn.

“We are looking for a core CPI running closer to 1.9% or so,” after temporary base effects filter through the data, said Phoebe White, interest-rate strategist at JPMorgan Chase & Co. “That’s still pretty soft and we think the underlying trend in inflation is going to be pretty gradual to build as we look into 2022.”

There are a range of forces that are likely to keep inflation low from the Fed’s perspective, including the millions of still-unemployed Americans. Slow changes in pandemic behavior — even as vaccines roll out — weak wage-bargaining power and an aging workforce could also keep overall demand moderate and prices muted.

“We are of the view that we are going to continue to be in a lower inflationary environment both in the U.S. and globally,” said Steven Oh, head of fixed income at PineBridge Investments. “We are not necessarily going to be successful in reaching inflation targets on a sustainable basis.”

The Fed also has limited tools. In its recent statement, the Fed pledged to keep rates at zero until “inflation has risen to 2% and is on track to moderately exceed 2% for some time.”

But a pledge to do nothing also raises questions about the potency of policy. The U.S. central bank has a legacy of missing its 2% inflation target consistently since it was installed in 2012.”Really it’s about changing peoples’ mindsets and experience for the last ten years,” said Tiffany Wilding, economist at Newport Beach, California-based Pacific Investment Management Co.”You are going to need several periods, maybe several years, of inflation that is running above the Fed’s 2% target to really anchor those expectations, because they have moved down.”

Originally Appeared On: https://www.nwaonline.com/news/2021/apr/18/cooling-economy-a-worry/

The findings suggest that winters in Europe and in eastern US may get warmer and wetter

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A new study led by scientists at the University of Miami (UM) Rosenstiel School of Marine and Atmospheric Science provides evidence that humans are influencing wind and weather patterns across the eastern United States and western Europe by releasing CO2 and other pollutants into Earth’s atmosphere.

In the new paper, published in the journal npj Climate and Atmospheric Science, the research team found that changes in the last 50 years to an important weather phenomenon in the North Atlantic — known as the North Atlantic Oscillation — can be traced back to human activities that impact the climate system.

“Scientists have long understood that human actions are warming the planet,” said the study’s lead author Jeremy Klavans, a UM Rosenstiel School alumnus. “However, this human-induced signal on weather patterns is much harder to identify.”

“In this study, we show that humans are influencing patterns of weather and climate over the Atlantic and that we may be able to use this information predict changes in weather and climate up to a decade in advance,” said Klavans.

The North Atlantic Oscillation, the result of fluctuations in air pressure across the Atlantic, affects weather by influencing the intensity and location of the jet stream. This oscillation has a strong effect on winter weather in Europe, Greenland, the northeastern U.S. and North Africa and the quality of crop yields and productivity of fisheries in the North Atlantic.

The researchers used multiple large climate model ensembles, compiled by researchers at the National Center for Atmospheric Research, to predict the North Atlantic Oscillation. The analysis consisted of 269 model runs, which is over 14,000 simulated model years.

The study, titled “NAO Predictability from External Forcing in the Late Twentieth Century,” was published on March 25 in the journal npj Climate and Atmospheric Science. The study’s authors include: Klavans, Amy Clement and Lisa Murphy from the UM Rosenstiel School, and Mark Cane from Columbia University’s Lamont-Doherty Earth Observatory.

The study was supported by the National Science Foundation (NSF) Climate and Large-Scale Dynamics program (grant # AGS 1735245 and AGS 1650209), NSF Paleo Perspectives on Climate Change program (grant # AGS 1703076) and NOAA’s Climate Variability and Predictability Program.

Originally Appeared On: https://www.sciencedaily.com/releases/2021/04/210419094035.htm

Filed Under: US

Restaurants struggle to find workers despite gains in U.S. economy

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Restaurant owners said workers are not applying for open jobs, and some are still not back to full staff.

As more people receive vaccinations for COVID-19 and consumers reportedly regain confidence, some Knoxville restaurants said they’re struggling to find workers.

Owners said that there is demand from customers, but some are still not back to full staff. The owners of Sweet P’s and Northshore Brasserie said they are not receiving applications for open jobs.

“Some people are not wanting to get back into the workforce, which is understandable,” said Chris Ford, a co-owner of Sweet P’s. “You’ve got a lot of stimulus money out there and quite frankly, we’re all competing, all these restaurants, for the same pool. There’s just a lot of options for people.”

The restaurant is in the process of opening a new location in Fountain City, set to be open for business this summer.

Around 744,000 people applied for unemployment benefits across the U.S. last week, an increase of 16,000. They remain high by historical standards, since dropping from their record highs towards the start of the COVID-19 pandemic.

Despite the rise in unemployment benefits, the U.S. unemployment rate dropped to 6% during March. Consumer confidence also increased, according to reports.

“We’re running a smaller crew right now,” said Brian Balest, the owner of Northshore Brasserie. “We’re running kind of a core group of people. We’re focused on dinner right now. So we’re getting through it. And I do think it’ll get better. I think it’s going to be a minute though.”

Most economists said they think the still-high level of unemployment applications should gradually fade.

Originally Appeared On: https://www.wbir.com/article/money/business/some-knoxville-restaurants-struggle-to-find-workers-despite-gains-in-us-economy/51-6ee4bf85-f51b-4f07-b9ff-ca68b84817fe

U.S. economy rebounding, helped by stimulus and vaccines

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The survey credited a range of factors, from vaccinations to the payments of up to $1,400 for individuals from the $1.9-trillion relief package that President Joe Biden pushed through Congress last month.

The survey, known as the beige book, will form the basis for discussions when Fed officials meet on April 27–28 to discuss what to do about interest rates.

Gus Faucher, chief economist at PNC Financial, said the message from the beige book is that business activity is picking up but “the economy still has a lot of room to strengthen further.”

While private forecasters have been busy boosting their economic projections for this year, Fed Chairman Jerome Powell has continued to stress that the central bank is not close to raising rates. The Fed released projections last month that indicated it will hold off raising rates until after 2023.

The beige book report, based on information from business contacts supplied by the Fed’s 12 regional banks, said that manufacturing activity continued to expand, with half of the Fed districts reporting robust manufacturing growth. Those gains came despite supply-chain disruptions in such critical areas as computer chips.

The survey found that the Fed’s regional bank in New York is seeing growth for the first time since the pandemic shut down the economy a year ago and that the expansion is “broad-based across industries.”

The Fed’s Philadelphia regional bank found that demand for goods and services is “on fire” but myriad severe supply constraints are continuing to hamper various industries.

Cleveland reported improvements in the hard-hit hotel and restaurant sectors. Similar improvements were reported by the Fed’s Atlanta regional bank, which covers tourist destinations in Florida.

Dallas reported that supply-chain disruptions have led to sharp increases in prices of goods, while the San Francisco district reported that residential construction remains strong.

The Fed survey found that many of its districts are seeing moderate price increases, specifically for materials such as metals, lumber, food and fuel.

The beige book reported that employment growth picked up as economic activity increased. It noted strong job gains in manufacturing, construction, and leisure and hospitality.

In an appearance Wednesday before the Economic Club of Washington, Powell acknowledged rising concerns about inflation following a report Tuesday that consumer prices rose 0.6% in March, the biggest one-month gain since 2012.

But Powell, who has been predicting a temporary spike in inflation this spring, repeated the view that the central bank wants to see inflation rise “moderately above 2% for some time” to make up for a decade when inflation has failed to reach the Fed’s 2% inflation target.

Originally Appeared On: https://www.advisor.ca/news/economic/u-s-economy-rebounding-helped-by-stimulus-and-vaccines/

JPMorgan 1Q profit up sharply, helped by improving economy

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JPMorgan Chase saw its first-quarter profit jump nearly five fold from a year earlier, as the improving economy allowed the bank to release roughly $5 billion from its loan-loss reserves that it had stored away in the early weeks of the pandemic.

The nation’s largest bank by assets said Wednesday that it earned $14.3 billion, or the equivalent of $4.50 per share, in the year’s first three months. That’s compared to a profit of $2.87 billion, or 78 cents per share, in the same period a year earlier.

Excluding the loan loss releases, the bank earned $3.31 per share. The results were significantly better than the forecast from analysts, who were looking for JPMorgan to report a profit of $3.10 per share, according to FactSet.

A significant chunk of JPMorgan’s profit gain came from its ability to release $5.2 billion from its loan-loss reserves this quarter. Banks such as JPMorgan set aside billions to cover potentially bad loans during the early months of the coronavirus pandemic. With the economy improving, and trillions of dollars of government stimulus being injected into the U.S. economy, those loans are no longer considered at risk of failing.

“With all of the stimulus spending, potential infrastructure spending, continued quantitative easing, strong consumer and business balance sheets and euphoria around the potential end of the pandemic, we believe that the economy has the potential to have extremely robust, multi-year growth,” said Jamie Dimon, the bank’s CEO and chairman, in a statement.

JPMorgan still has $26 billion stored away in its loan-loss reserves, which Dimon said is a “appropriate and prudent” amount for the bank currently.

JPMorgan also had a surge in revenue and profits in its investment banking division, which helped its overall bottom line. The investment banking division had revenues of $14.6 billion in the quarter, up from $10 billion a year earlier. The bank saw significant gains in the revenues from its trading desks, reflecting the healthy volatility last quarter in both the bond market and stock market.

Total revenue across the entire bank was $33.12 billion, up from $29.01 billion a year earlier.

Originally Appeared On: https://apnews.com/article/coronavirus-pandemic-economy-906e9d109f1732d097d5ab16e5ed96bf

Inflation Accelerated in March Due to Strengthening Economy, Rising Energy Prices

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U.S. consumer prices picked up sharply in March as the economic recovery gained momentum, partly reflecting higher gasoline prices.

The Labor Department said Tuesday that the consumer-price index—which measures what consumers pay for everyday items including groceries, clothing, recreational activities and vehicles—jumped 2.6% in the year ended March, and rose a seasonally adjusted 0.6% in March from February.

The so-called core CPI, which excludes the often-volatile categories of food and energy, climbed 1.6% over the prior year, and was up 0.3% in March from February.

“Inflation in March 2021 is still under control,” said Gus Faucher, chief economist at the PNC Financial Services Group, before the report was released. “It takes time for inflationary pressures to build in the economy.”

March’s reading marks the start of what many economists expect to be a monthslong upswing in prices, after nearly a year of muted overall inflation as the Covid-19 pandemic doused consumer spending. Whether this rise proves temporary is one of the key questions for markets and the U.S. recovery over the next year or so, as the Biden administration, Congress and the Federal Reserve continue to provide financial support for the economy.

Originally Appeared On: https://www.wsj.com/articles/us-inflation-consumer-price-index-march-2021-11618273541

Bond investors beware – US rates may rise sooner than thought

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However, markets are running contrary to the direction that the US Federal Reserve (Fed) has signalled so far.  Members of the Fed have emphasised that they are explicitly committed to achieving maximum employment. They have pledged to hold off any policy rate increases until realised inflation has reached 2% and is on track to average 2%.

Fed chair Jay Powell has dismissed any possibility of tapering asset purchases in 2021. He expects inflation to remain contained and that it could take three years to reach the 2% average inflation target. Powell and other members have been forceful and consistent in adhering to this policy framework.

The so-called median dot plot, in which individual Fed officials map their forecasts for interest rates, released for the March 2021 meeting of the Federal Open Markets Committee, showed policymakers did not expect the first rate rise until at least the end of 2023.

Yet bond markets have in recent weeks radically brought forward the market-implied expectations of the timing of the Fed’s first rate increase. That first move is expected by the end of 2022, according to current market pricing.

Three questions for Ken O’Donnell, head of short duration fixed income

What is the situation on US fixed income markets now?

Let’s first consider the context. Central banks’ accommodative monetary policy has left investors with very little if anything in terms of return potential on bank deposits, money market funds and ultra-short and short duration bond mutual funds. While the absolute yield in the US may be positive, in inflation-adjusted terms, returns are negative. A negative real return means your capital is not keeping pace with inflation. Its purchasing power is slowly eroding away.

How long will this last? After the global financial crisis of 2008/09, interest rates remained low for six years in what in Fed speak was an extended period. That was a difficult period for risk-averse investors. The good news is that such a long period of low real interest rates does not appear likely this time. The US economy is responding to the measures taken.

Nevertheless, the Fed’s forecast is for no rate increases until 2023.

When should we expect official interest rates to rise?

In my opinion, the balance of risk is tilted towards a move sooner. A strong rebound in growth and a corresponding decline in unemployment would pressure policymakers to begin to remove stimulus measures.

That would put an end to (near) zero rates sooner than expected.

We could expect to begin to see a gradual shift in Fed rhetoric by June, acknowledging that the economy is performing well. This would put the Fed schedule for a tapering of asset purchases under its quantitative easing policy accommodation programm at year-end and into 2022. A potential
increase in the fed funds rate would then come by the end of 2022.

How should bond investors position themselves for this scenario?

There are various considerations.

Intermediate 10-year US Treasury note yields have risen by 100bp from the low of August 2020 to 1.65% (see Exhibit 1 below). That is a 9% drop in the market price of these notes. This is painful when you are receiving less than 1% in annual interest. Bond investors face a permanent loss for this market cycle, but they should keep in mind that this loss comes after a long period of excess gains of about 10%. In a way, compensation for bond risk is averaging out.

In addition, with T-note yields now near 2% levels, investors may choose to rotate out from investment-grade and high-yield corporate bonds into the US Treasury market. This could cause credit spreads to
widen.

Managing through this – markets pricing in higher rates is likely to continue – will be challenging. The Fed will need to respond to the recovery and begin the rate normalization cycle and if the recovery proceeds more rapidly, the market adjustment could be quite extreme. That is not our base case, but we still think there are benefits to adopting a flexible investment strategy.

This would involve a regular reassessment, reinvesting every quarter. An investor using such a disciplined ‘ladder’ strategy (see Exhibit 2) invests in bonds ranging in maturity from short term to long term and reinvests the proceeds when a bond matures.

Exhibit 2: A
laddered bond portfolio disperses risk in a ladder-like fashion, mitigating interest rate risk, reinvestment risk, credit risk, and liquidity risk.

Bond investors beware – US rates may rise sooner than thought

Source: Corporate Finance Institute via https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/laddered-bond-portfolio/

If the short-term bonds mature at a time when interest rates are rising, the principal can be reinvested in ‘higher-rung’ bonds. It mitigates interest rate risk, reinvestment risk, credit risk, and liquidity risk.

Such a diversified portfolio has greater liquidity, allowing the investor to participate in the rising yield pattern and capture yield over time rather than trying to time the market by waiting for peak yield.

Originally Appeared On: https://investors-corner.bnpparibas-am.com/markets/bond-investors-beware-us-rates-may-rise-sooner-than-thought/

‘Total nightmare.’ Fast food struggles to hire as demand soars, U.S. economy roars

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FILE – This Thursday, Dec. 15, 2016, file photo shows a Taco Bell restaurant in Metairie, La. Yum Brands, Inc., which operates Taco Bell, KFC and Pizza Hut, reports earnings, Thursday, Aug. 3, 2017. (AP Photo/Gerald Herbert, File)  The Associated Press

NEW YORK — Taco Bell restaurants, struggling to hire enough workers to keep up with a surge in sales as the U.S. economy recovers, is pitching a huge April job fair to hire at least 5,000 employees in one day. And it’s adding benefits for some general managers to sweeten the pot.

Taco Bell, part of Yum Brands Inc., will hold spot interviews on April 21 in parking lots at nearly 2,000 Taco Bell locations, where some candidates won’t even have to leave their cars to apply. It has also added four weeks of annual vacation, eight weeks of paid maternity leave, and four weeks of new parent and guardian “baby bonding” time for general managers at company-owned locations.

Taco Bell has used such hiring events before, but never at so many locations at once. “It is no secret that the labor market is tight,” Kelly McCulloch, Taco Bell’s chief people officer, said in a statement.

“Total nightmare” is the way FAT Brands Inc. CEO Andy Wiederhorn describes the staffing situation for franchisees of his company’s restaurants, which include Johnny Rockets and Fatburger.

“The most recent stimulus check and unemployment benefits have been a catalyst for people to stay at home” instead of looking for work, he said.

U.S. job openings in the accommodation and food service industry increased by 104,000 to reach 761,000 on the last day of February from the prior month, according to federal data released last week.

Originally Appeared On: https://www.stltoday.com/business/local/total-nightmare-fast-food-struggles-to-hire-as-demand-soars-u-s-economy-roars/article_6d68b385-2e7d-5872-84f1-ee9f5f23c669.html

Group: US economy gathers momentum as policy decisions reshape future | Farm Forum

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The U.S. economy continues to outperform expectations as stimulus funds are fueling robust consumer spending. Consensus forecasts point to 7% GDP growth for 2021, the fastest rate of expansion since 1984. Inflation is inevitable, however, as the 2020 price declines will widen year-over-year inflation over the next two quarters, and new upward price pressure should push headline inflation above 3%.

The transition to a less COVID-restricted world has begun. But for the economy and rural industries, there will be no going back to pre-COVID conditions. A transformed policy environment and awakened commodity markets are making way for a whole new operating environment, according to the new Quarterly report from CoBank’s Knowledge Exchange.

“The policy focus in Washington is shifting from crisis management to building for the future,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange division. “And the outcome of the president’s infrastructure plan will have substantial implications for rural water, power and broadband providers. Hundreds of billions of dollars in funding would reshape these industries and intensify the current focus on climate resilience and social equity.”

The cyclical turn in grain pricing, driven by strong demand and tight stocks, continued during the first quarter of 2021 and has picked up further gains ahead of spring planting. Accumulated grain exports to China have been very strong. While the backdrop for the grain and oilseed complex is positive, there are issues worth monitoring that could result in price volatility in the coming months. A recent surge of African Swine Fever in Asian countries could temporarily slow soybean demand.

Farm supply retailers are positioned to benefit from an exceptionally strong spring agronomy season, outpacing fall and spring 2020. Financially strong U.S. crop farmers should increase spending given a 3.1% increase in planted corn, soybean and wheat acres. Fertilizer prices rose 42% during Q1 and are now 96% above the trough level in May 2020. While much of the Midwest Corn Belt is free of drought, some areas of concern surfaced in late March.

The U.S. fuel ethanol sector has recovered, with production running near 90% of pre-COVID levels. The industry is adapting to new short-term and long-term realities, including changes in driving and work habits, policy directives on ethanol and fossil fuels and increased adoption of electric vehicles. Operating margins averaged near $0.10/gallon but rose sharply in March to above $0.25/gallon as fuel ethanol prices rose and natural gas prices fell.

U.S. chicken prices started 2021 on a high note, climbing over 20% in the first quarter. These prices offset the double-digit rate of feed cost inflation and brought spot margins well into positive territory. The counts of eggs set and chick placements are a leading indication that chicken production will remain at current levels, so chicken prices continue to look strong through the summer. Expected increases in vacation and business travel this summer will boost food service sales, benefiting the chicken sector.

U.S. beef demand has been incredibly strong in the first quarter despite the challenges in foodservice and the away-from-home dining sector. Strong demand and expectations for limited supply growth in the back half of 2021 have driven up cattle futures. The USDA expects beef production to decline by 3.5% in the second half of 2021, which has helped lift cattle prices nearly 15% above year-ago levels. Packer margins remain elevated, but producers are expected to realize better margins in the second half of 2021.

Strong first quarter demand for pork, coupled with indications of limited supply growth, has lifted hog sector profitability to levels not seen in many years. Concerns over feed and other cost inflation has taken a back seat to optimism for another year of strong pork exports and robust domestic demand as U.S. consumer behavior slowly returns to normal. China has slowed its hog herd rebuilding due to increased ASF cases this winter, helping drive the positive outlook for the remainder of the year.

The pace of U.S. dairy exports started 2021 on a weaker note as exporters continue to struggle with trade logistics, specifically with the scarcity of containers, port congestion and rising transportation costs. Cheese and butter stocks continued their rapid ascent, climbing 5.4% and 16.8% year-over-year respectively, for February. U.S. milk production rose in January and again in February, giving dairy processors ample milk supplies for processing. Cow numbers in February reached the highest level in 30 years following months of ongoing expansion.

Combined cotton and rice planted acreage is expected to fall for the third consecutive year in the U.S. according to USDA’s latest projections, as acres shift out of pima cotton and all classes of rice. The surge in upland cotton prices has blunted losses in its acreage. Last year’s rally in refined sugarbeet prices also forestalled losses in sugarbeet acreage. The recovery in U.S. foodservice demand remains an unknown for both rice and sugar, while China remains critical for U.S. cotton demand.

Tree nut exports reached an all-time high with the peak shipping now drawing to a close. However, container shortages and port constraints are estimated to have delayed U.S. tree nut export shipments 10%-20% in the opening months of the year. The lack of movement could potentially translate into higher-than-expected tree nut inventories at the end of the marketing season. Drought conditions in California are raising concerns of limited water allocations in the forthcoming growing season.

February’s polar vortex refocused attention on deficiencies in U.S. power, energy and water infrastructure, and how it is affected by climate change. Widespread failures in energy systems tend to negatively impact water systems. Consequently, any climate mitigation program in the U.S. must account for water and energy system dependencies. President Biden, delivering on his “Build Back Better” platform promise, has announced the American Jobs Plan — a $2 trillion infrastructure and economic modernization bill, which includes a major focus on climate change.

The recently enacted American Rescue Plan Act included $20 billion for broadband availability and affordability and the American Jobs Plan includes $100 billion to bridge the digital divide. Details are not finalized, but President Biden wants to prioritize funding for nonprofits, cooperatives and local governments. The ultimate outcome of the infrastructure plan will have substantial implications for rural water, power and broadband providers.

Originally Appeared On: https://www.aberdeennews.com/farm_forum/group-us-economy-gathers-momentum-as-policy-decisions-reshape-future/article_e9810d24-98a6-11eb-9e2e-7794a7f37843.html