Washington Insider -- Friday
Juneteenth Now a Federal Holiday
Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.
US-UK Set Five-Year Suspension of Tariffs in Aircraft Dispute
Following on the lines of the compromise announced earlier this week with the European Union (EU), the U.S. and UK reached agreement to suspend tariffs they have imposed over the Airbus/Boeing dispute.
The agreement with the UK is said to be nearly identical to the one reached with the EU earlier this week on the topic. The U.S.-UK accord includes establishing a working group on large civil aircraft with each side agreeing to provide any financing to aircraft firms will be “on market terms” and that research and development funding will be provided “though an open and transparent process.”
The two will also jointly analyze and address “non-market practices of third parties that may harm their respective large civil aircraft industries.”
The five-year tariff suspension applies from July 4.
Senate Ag Committee Sets Hearing On Cattle Market/Industry
The Senate Agriculture Committee has set a hearing for June 23 on “Examining markets, transparency, and prices from cattle producer to consumers.”
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The move was welcomed by Sen. Chuck Grassley, R-Iowa, who has been a long critic of the U.S. cattle market situation and consolidation in the industry.
“GR8 NEWS Ag Cmte answering my calls 2hold a hearing on June 23 on unfairness in cattle market/industry (plus)need for transparency,” Grassley said on Twitter. “This is opportunity to educate senators/public on the dire issues family farmers r facing while up against Big Cattle/ 4 packers control 80% of market.”
Washington Insider: Juneteenth Now a Federal Holiday
President Joe Biden signed into law Thursday a measure that makes June 19 a federal holiday -- Juneteenth -- marking the end of slavery in the United States in 1865.
June 19, 1865, was the date that Union General Gordon Granger read the Emancipation Proclamation to African-Americans in Texas, roughly two-and-one-half years after the proclamation was issued on January 1, 1863.
The new holiday comes at the culmination of legislative action this week that saw the Senate approve legislation to declare the June 19 a federal holiday. The House followed suit Wednesday and approved the plan on a 415-14 vote.
What the quick development means is that today, June 18, will be the observed federal holiday, with the U.S. Office of Personnel Management (OPM) announcing most federal workers would get Friday off since June 19 falls on a Saturday.
But the situation has spawned a host of questions. Some have lit up social media sites, expressing disappointment that the OPM made the announcement via Twitter as opposed to an official notice on their website. However, the OPM does update its government operating status each day with a notice posted on their website typically shortly after midnight Eastern Time.
What this does is set off a host of questions, however, including what services will or won't be available. The quick passage and enactment of the law has resulted in potentially more answers than questions, especially on things like U.S. mail. As of mid-afternoon on Thursday, there was no word if mail delivery would be interrupted or not.
It would appear most U.S. federal government offices will be closed on Friday in observance of the holiday which would include USDA service centers. However, Farm Service Agency Service Centers have been allowing limited visitors to those offices or taking things on an appointment-only basis. So a quick check with your local office is the best bet if you had an appointment for June 18.
Markets will be open for business. The Securities Industry and Financial Markets Association (SIFMA) is an industry trade group that makes recommendations for U.S. bond markets. The group said that the Juneteenth would be incorporated in its holiday schedule in coming years.
U.S. stock markets and commodity markets will also be open for trading and on regulator trading hours. A spokeswoman for the NASDAQ exchange told MarketWatch that U.S. markets operated by the exchange will remain open on Friday, a big expiration of options and futures, and Monday “to maintain a fair and orderly market and to minimize operational risks.”
And there is the matter of the agencies that regulate these markets, including the Securities and Exchange Commission and the Commodity Futures Trading Commission. They have announced they will be closed on Friday. Typically, those agencies are the ones that markets would have to work with to determine any holiday schedules to make sure that all the needed activities are addressed.
And markets are not always closed for every federal government holiday, or at least not always right away. The Martin Luther King Jr. holiday January 19 was officially established in 1986 and the stock markets and other exchanges opted to remain open, but observe a minute of silence. However, that changed in 1998 when the New York Stock Exchange opted to close and other markets have also opted to close for that day.
But there are also days when markets close that are not federal government holidays such as Good Friday.
As for companies, the Wall Street Journal noted that Juneteenth is observed at 9% of businesses, citing a survey conducted this year by employer consulting firm Mercer LLC.
But the key for ag markets is that it removes another day of price discovery if markets opt to close in observance of the holiday. And after a day of steep losses on June 17, that will mean Friday could see another active market day. If markets were to suddenly be closed Friday, that could create either unfair advantages or unintended costs for those that would need to adjust their market positions in the wake of the big market decline Thursday.
While we are currently in a period where there are no U.S. government payments like loan deficiency payments being made, the have an extra federal government holiday will not affect any payments to farmers. In years past, the Columbus Day holiday has been one where it could create a payment opportunity for farmers as the government closure meant the Farm Service Agency was not updating its daily rates used to determine Loan Deficiency payments, a situation which could allow some producers to capture an extra day of pricing their crops knowing what the LDP rate would be.
So we will see. Getting an extra holiday with pay would be something many workers would appreciate. But there are more than a few moving parts that mean the full impact of this quickly enacted holiday will unfold in the years to come and could be something to follow closely as it relates to markets and the ability of farmers to market their crops, Washington Insider believes.
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