The Daily SA for Monday, 12 July 2021 – Forward Observer

The Daily SA for Monday, 12 July 2021

Good morning. Here’s your Daily Situational Awareness for Monday, 12 July 2021. You can receive this daily intel brief by signing up at https://forwardobserver.com/daily-sa

TODAY’S SA:

  • USDA to Expand Processing Capacity
  • Debt Ceiling Fight
  • Pacific Heat Wave Impacts Ag
  • Fall Shipping Resupply in Doubt
  • Stainless Steel Out of Gas

SITUATIONAL AWARENESS

MEAT: The Agriculture Department is using $500 million from COVID recovery funds to expand meat processing. Part of the recent executive order addressing competition, shipping rates and employee licensure regulation, the plan will expand capacity for smaller local and regional processors. The new rule changes will allow ranchers to sell outside their slaughter agreements if they can prove harm to their business from pandemic closure, cyber attack or other disruption. (Recommendation: Find a marketplace for direct meat purchasing if available in your area. Consider group-buys of beef and pork to reduce dependence on supermarket supply disruptions. – D.M.)

FUNDING: The Bipartisan Policy Center said the current government funding will run out in the fall and the Senate has until 31 July to suspend or increase the debt limit. Instead of offering a hard date, the center says pandemic spending and uneven economic recovery make accurate predictions difficult. Treasury Secretary Yellen urged Congress to “raise or suspend the debt limit as soon as possible”. (Analyst Comment: The upcoming midterm elections and appropriations negotiations could limit spending proposal amounts but Democrats want to thread the needle with progressive bills and continuing economic recovery. – D.M.)

HEATWAVE: Due to a prolonged heatwave and drought in the Pacific Northwest, agriculture producers are expecting lower yields this year. The direct economic cost is still being assessed but smaller crops and record-breaking heat leads many to predict limited-availability of some fruits this fall. Some fisheries are relocating their stock to cooler locations as millions of fish were at risk of dying off from excessive heat. (Analyst Comment: Expect higher food prices to continue as manmade and natural events continue to impact consumers throughout the fall and winter. – D.M.)

RESTOCK: Increased international shipping and container rates are squeezing small and medium sized businesses recovery. The traditional summer shipping and resupply operations are going to large companies like Walmart and Amazon, which are absorbing the 344% container cost increase since 2020. Smaller companies are being priced off vessels, in some cases turning to air freight simply to meet orders. (Analyst Comment: Small businesses typically depend on the holiday season, but realized winter supply shortages could drive companies under as the economic recovery remains uneven. – D.M. )

STEEL: North American Stainless is declaring force majeure on several contracts at their Kentucky steel productions facility. The company declared a suspension of all performance obligations as well as indefinite delay of any and all further deliveries at the Kentucky plant. The company cites shortages of key industrial gasses and midstream labor as the main cause for the closure. North American Stainless accounts for about 40% of US stainless steel materials used in everything from cookware to musical instruments. (Analyst Comment: The impacts of driver and supply shortages are beginning to show up in various industries with no change in fundamentals, indicating little-to-no downstream relief in sight. – D.M.)

HAZARDS WARNING

HURRICANE SEASON: Nothing significant to report.

In today’s Early Warning, Max has a roll-up of Far Left activity over the weekend and upcoming unrest early this week. Upgrade your situational awareness to situational understanding here: https://forwardobserver.com/subscribe

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