Shutdown risks farm payment delays
Just when U.S. farmers were in line to get a second round of federal aid to offset losses in the U.S.-China trade war, now there's concern the impasse in Washington could hamper payments.
After crop prices tumbled after the tariff standoff, President Donald Trump's administration made good on its promise to help farmers by approving the second-round payments this month. The U.S. Department of Agriculture has said the total aid could reach as much as $12 billion, with soybean growers taking the biggest share. But the partial government shutdown is raising questions about delays for the plan, called the market facilitation program.
On Dec. 21, the USDA said in a statement that the aid would continue during the first week of a shutdown, but payments would halt after that for producers who hadn't certified production. The deadline to apply for the program is Jan. 15.
The House of Representatives hasn't scheduled any votes for today, a Republican aide said, which means the shutdown will continue at least into this weekend.
"There's certainly concern" among farmers about whether they're "going to get their payments," said Brian Hoops, senior market analyst at Midwest Market Solutions in Springfield, Mo. A lack of payments could eventually force farmers to sell crops to generate cash flow, Hoops said.
Phone calls and emails sent to the USDA seeking comment weren't answered. The agency said Dec. 21 that most administrative and oversight functions would be halted during the government closure.
-- Bloomberg News
Weather, gas market juice coal output
Cold weather and a hot natural gas market have helped drive U.S. coal production to the highest level in 16 months.
Output rose to an estimated 15.9 million short tons in the week ending Saturday, the U.S. Energy Information Administration said Thursday. That's the highest since Aug. 25, 2017. The amount of coal shipped by rail, which closely tracks production, reached the highest since Sept. 1, 2017.
Coal's comeback comes at the expense of gas, which has been surging in price. After averaging about $3 per 1 million British thermal unit in 2017, prices climbed to more than $4.80 in November and have mostly hovered between $3.50 and $4.50 this month.
While total electricity generation rose by about 8 percent in November and December, power from gas fell by about 7 percent, Barclays analysts Samuel Phillips and Michael Cohen wrote in a report this week.
With higher gas prices, "preliminary data suggests a pickup in both coal demand and supply," Jeremy Sussman, an analyst at Clarksons Platou Securities, said in an email. Coal's largest gains over gas were in the Midwest, Southeast and Southwest.
Still, Sussman expects gas prices to come down next year. And the recent uptick in coal demand probably won't upset the long-term trend that has gas displacing coal at power plants.
-- Bloomberg News
30-, 15-year mortgages inch downward
WASHINGTON -- U.S. long-term mortgage rates fell this week, offering a slight degree of relief to would-be homebuyers after the stock market has tumbled.
Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year, fixed-rate mortgage dipped to 4.55 percent from to 4.62 percent last week. Rates averaged 3.99 percent a year ago.
The average rate for 15-year fixed-rate loans dropped to 4.01 percent from 4.07 percent. Still, that average is above its 3.44 percent level a year ago.
Mortgage rates began to spike after President Donald Trump signed deficit-financed tax cuts into law last year, but rates have eased in recent weeks as stocks have sold off and the interest charged on the 10-year U.S. Treasury note has tumbled.
-- The Associated Press
Consumer outlook takes fall, stays high
WASHINGTON -- U.S. consumer confidence tumbled this month as Americans began to worry that economic growth will moderate next year. But consumer spirits are still high by historic standards.
The Conference Board, a business research group, said Thursday that its consumer confidence index fell to 128.1 in December, down from 136.4 in November and lowest since July. The index is benchmarked at 100 for 1985, a year that was neither a peak nor a trough.
The index measures consumers' assessment of current economic conditions and their outlook for the next six months. Both fell in December. Consumers' expectations for the future dropped to the lowest level since November 2016.
For now, the U.S. economy is solid. Economic growth clocked in at a healthy 3.4 percent annual pace from July through September after surging 4.2 percent in the second quarter. At 3.7 percent, the unemployment rate is the lowest in nearly five decades.
But the U.S. stock market has dropped sharply since early October. Investors have plenty to worry about. The Federal Reserve has gradually been raising interest rates. The economic boost from year-old tax cuts is expected to fade in 2019. Global growth is sputtering. And the U.S. and China -- the world's two biggest economies -- are locked in a trade war that threatens to disrupt global commerce.
-- The Associated Press
Louisiana lands parts plant in Slidell
SLIDELL, La. -- Louisiana offered $765,000 in incentives to lure a plant with Turkish connections that will fuse metal powders at high temperatures to make precision parts.
The deal with Advanced Sinter Metal Technologies Inc. will provide 15 jobs at first, but could eventually provide 43, St. Tammany Parish officials told NOLA.com/The Times-Picayune.
The Slidell City Council last month approved a permit for the company, which Louisiana Economic Development Secretary Don Pierson said will make parts for automotive and other industries.
One owner's parents own Sinter Metal Technologies of Istanbul, which has trained or employed everyone associated with the new plant, but the two companies are separate, General Manager Andrew Herrington said. The U.S. corporation is based in Delaware.
Pierson said the state is offering $250,000 under the Economic Development Award program. That's structured as a loan which will be forgiven if the company puts at least $5 million into capital investment and creates at least 15 jobs with average salaries of $55,000 a year.
-- The Associated Press
Business on 12/28/2018
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