Author: CensorBiz

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BRUSSELS — The European Union’s executive arm on Wednesday criticized France for running up excessive debt, a stinging rebuke at the height of an election campaign where President Emmanuel Macron is facing a strong challenge from the extreme right and the left.

The EU Commission recommended to seven nations, including France, that they start a so-called “excessive deficit procedure,” the first step in a long process before any member state can be hemmed in and moved to take corrective action.

“Deficit criteria is not fulfilled in seven of our member states,” said EU Commission Vice President Valdis Dombrovskis, also pointing the finger at Belgium, Italy, Hungary, Malta, Slovakia and Poland.

For decades, the EU has set out targets for member states to keep their annual deficit within 3% of Gross Domestic Product and overall debt within 60% of output. Those targets have been disregarded when it was convenient, sometimes even by countries such as Germany and France, the biggest economies in the bloc.

This time, however, Dombrovskis said that a decision “needs to be done based on, say, facts and whether the country respects the treaty, reference values for a deficit and debt and not based on the size of the country.”

The French annual deficit stood at 5.5% last year.

Over the past years, exceptional circumstances such as the COVID-19 crisis and the war in Ukraine allowed for leniency, but that has now come to an end.

Still, Wednesday’s announcement touched a nerve in France after Macron called snap elections in the wake of his defeat to the hard right of Marine Le Pen in the EU parliamentary polls on June 9.

Le Pen’s National Rally and a new united left front are polling ahead of Macron’s party in the elections, and both challengers have put forward plans in which deficit spending is essential to get out of the economic rut.

In the election campaign, Macron’s camp could use the wrist-slap as a warning that the extremes will drive France to ruin, while the opposition could claim that Macron had overspent and still impoverished the French, leaving them no choice but to spend more still.

Despite the rebuke over excessive debt, EU Economy Commissioner Paolo Gentiloni stressed France was also moving in the right direction to address certain “imbalances,” sending a “message of reassurance” to the EU institutions.

The International Monetary Fund forecasts that the French economy will grow at a relatively sluggish 0.8% of GDP in 2024, before rising to 1.3% in 2025.

Unlike the measures imposed on Greece during its dramatic fiscal crisis a decade ago, Gentiloni said, excessive austerity was not an answer for the future.

“Much less does not mean back to austerity, because this would be a terrible mistake,” he said.

He also disputed a claim that it was austerity itself that drove voters to veer to the extreme right, pointing out that lenient budget conditions had been in force for the past years and still allowed the hard right to come out as victors in many member states.

“Look to what happened in the recent elections. If the theory is ‘less expenditure, stronger extremes,’ well, we are not coming from a period of less expenditure,” Gentiloni said.
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On Friday, U.S. President Joe Biden wrapped up meetings in Italy with leaders of the Group of Seven democracies. The leaders focused on threats they say China poses to the global economy and artificial intelligence ethics championed by Pope Francis. Patsy Widakuswara reports from Brindisi, Italy.
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The lack of laws governing digital currencies has slowed their expansion in the United States. Cryptocurrency investors tell VOA’s Deana Mitchell they are encouraged that the U.S. House of Representatives is considering a new legal framework for electronic money.
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washington — Federal Reserve officials said Wednesday that inflation has fallen further toward their target level in recent months but signaled they expect to cut their benchmark interest rate just once this year. 

The policymakers’ forecast for one rate cut was down from a previous forecast of three, because inflation, despite having cooled in the past two months, remains persistently elevated. 

In a statement issued after its two-day meeting, the Fed said the economy is growing at a solid pace, while hiring has “remained strong.” The officials also noted that in recent months there has been “modest” further progress toward their 2% inflation target. That is a more positive assessment than after the Fed’s previous meeting May 1, when the officials had noted a lack of progress. 

Still, the central bank made clear Wednesday that further improvement is needed. 

“We’ll need to see more good data to bolster our confidence that inflation is moving sustainably toward 2%,” Chair Jerome Powell said at a news conference after the Fed meeting ended. 

As expected, the policymakers kept their key rate unchanged at roughly 5.3%. The benchmark rate has remained at that level since July of last year, after the Fed raised it 11 times to try to slow borrowing and spending and cool inflation. Fed rate cuts would, over time, lighten loan costs for consumers, who have faced punishingly high rates for mortgages, auto loans, credit cards and other forms of borrowing. 

The officials’ rate-cut forecast reflects the individual estimates of 19 policymakers. The Fed said eight of the officials projected two rate cuts. Seven projected one cut. Four of the policymakers envisioned no cuts at all this year. 

“What everyone agrees on,” Powell said at his news conference, is that the Fed’s timetable for rate cuts is “going to be data dependent.” 

The Fed’s latest projections are by no means fixed. The policymakers frequently revise their plans for rate cuts — or hikes — depending on how economic growth and inflation evolve over time. 

On Wednesday morning, the government reported that inflation eased in May for a second straight month, a hopeful sign that an acceleration of prices that occurred early this year may have passed. Consumer prices excluding volatile food and energy costs — the closely watched “core” index — rose just 0.2% from April, the smallest rise since October. Measured from a year earlier, core prices climbed 3.4%, the mildest pace in three years. 

“We welcome today’s reading and hope for more like that,” Powell said. 

Though inflation has tumbled from a peak of 9.1% two years ago, it remains too high for the Fed’s liking. The policymakers now face the delicate task of keeping rates high enough to slow spending and defeat high inflation without derailing the economy. 
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Bangkok — Myanmar’s economy shows no signs of recovering from the 2021 military coup, as civil war drives more workers abroad, pushes inflation into triple digits in some parts of the country and pulls it deeper into poverty, a new World Bank report says.

“Livelihoods Under Threat,” launched Wednesday in Myanmar, says the economy shuffled along over the past year with gross domestic product growing at a meager 1%. The same is expected for next year.

While staving off recession, slow growth still leaves Myanmar’s once-booming economy 10% smaller than it was before the country’s military ousted the democratically elected government more than three years ago.

Resistance groups have made major battlefield gains against the junta since late last year and are believed to control more than half the country, including some key border trade routes.

“The overall storyline is that the economy remains weak and fragile overall. Operating conditions for businesses of all sizes and all sectors remain very difficult,” World Bank senior economist Kim Edwards said at the report’s launch.

The bank says overall inflation rose some 30% in the year leading up to September 2023, and even more in areas where fighting has been fiercest.

“You can see in the conflict-affected states and regions — Kayin, Kachin, Sagaing, northern Shan, Kayah — price rises of 40 to 50%,” Edwards said.

“And then in Rakhine, where … there’s been particular problems and increasing conflict recently, we’ve seen price rises of 200% over the year. So, very substantial. And obviously, it has very significant effects for food insecurity,” he said.

The United Nations’ World Food Program says food insecurity now plagues a quarter of Myanmar’s 55 million people, especially the more than 3 million displaced by the fighting.

In Wednesday’s report, the World Bank also estimates that nearly one-third of the population now lives in poverty.

“And we see the depth and severity of poverty. So, this is really a measure of how poor people in poverty actually are — worsening also in 2023, meaning that poverty is more entrenched than at any time in the last six years,” Edwards said.

The bank says much of the inflation is being driven by the steady depreciation of the currency, the kyat. While the official exchange rate remains stuck at 2,100 to the U.S. dollar, trading of the kyat on the black market soared past 4,500 to the dollar in May.

The junta has imposed several controls to conserve its dwindling foreign currency reserves. Last month, it urged companies doing business abroad to barter with their trade partners and settle bills with their wares instead of cash.

At the same time, the bank says border trade — a major source of tax revenue for the regime — is being hit hard by the gains the resistance has been making along Myanmar’s frontiers with China, India and Thailand. It says imports and exports by land fell 50% and 44% respectively, in the past six months.

The junta has leaned heavily on oil and gas revenue, but with little investment for exploration of new reserves, those exports are likely to start falling in the coming years, as well, Edwards said.

More of what the junta does earn is going to the military at the expense of other basic services. According to the report, defense spending hit 17% of the national budget in the fiscal year that ended in March, nearly twice what was spent on health and education combined.

Encouraging news

The World Bank says manufacturing and agriculture output in Myanmar have started to pick up, and a combination of cheaper fertilizer and higher crop prices could keep the farming sector growing.

Traders stymied by blocked border gates also seem to be shifting some of their traffic to new routes on land and sea.

“There are some signs of life,” Edwards said. “And these really speak to the adaptability of many of Myanmar’s businesses and their ability to cope with what, under any objective circumstances, are very difficult business constraints and conditions.”

Even so, Edwards said, “The near-term outlook remains quite weak, with the economy failing to recover from its recent, very sharp contraction.”

Htwe Htwe Thein, an associate professor at Australia’s Curtin University who has been studying Myanmar’s business and economic development for two decades, said she could not recall a worse time for Myanmar’s economy.

“The state of the economy has never been this low in terms of prospects, in terms of … the trajectory,” she told VOA.

“The only people who are doing well … is a very, very small percentage at the top who are working with the junta,” she said. “Everybody else is suffering severely.”

Amid the fierce inflation, falling wages and dwindling job prospects, Thein said, the young are losing hope and grasping at any opportunity to work or study abroad.

She added that the junta’s efforts to shore up the economy have been ad hoc and short-sighted, and that rebuilding will take years and can only be achieved if and when the junta is out of power.
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WASHINGTON — Inflation in the United States eased in May for a second straight month, a hopeful sign that a pickup in prices that occurred early this year may have passed. The trend, if it holds, could move the Federal Reserve closer to cutting its benchmark interest rate from its 23-year peak.

Consumer prices excluding volatile food and energy costs — the closely watched “core” index — rose 0.2% from April to May, the government said Wednesday. That was down from 0.3% the previous month and was the smallest increase since October. Measured from a year earlier, core prices rose 3.4%, below last month’s 3.6% increase.

Fed officials are scrutinizing each month’s inflation data to assess their progress in their fight against rising prices. Even as overall inflation moderates, such necessities as groceries, rent and health care are much pricier than they were three years ago — a continuing source of public discontent and a political threat to President Joe Biden’s re-election bid. Most other measures suggest that the economy is healthy: Unemployment remains low, hiring is robust and consumers are traveling, eating out and spending on entertainment.

Overall inflation also slowed last month, with consumer prices unchanged from April to May, in part because of sharp falls in the cost of gasoline, air fares and new cars. Measured from a year earlier, consumer prices rose 3.3%, less than the 3.6% increase a month earlier.

The cost of auto insurance, which has soared in recent months, actually dipped from April to May, though it’s still up more than 20% from a year earlier. Grocery prices were unchanged last month, after declining slightly in April. They’re now up just 1% on a year-over-year basis.

The Fed has kept its key rate unchanged for nearly a year after having rapidly raised it in 2022 and 2023 to fight the worst bout of inflation in four decades. Those higher rates have led, in turn, to more expensive mortgages, auto loans, credit cards and other forms of consumer and business borrowing. Though inflation is now far below its peak of 9.1% in mid-2022, it remains above the Fed’s target level.

Persistently elevated inflation has posed a vexing challenge for the Fed, which raises interest rates — or keeps them high — to try to slow borrowing and spending, cool the economy and ease the pace of price increases.

The longer the Fed keeps borrowing costs high, the more it risks weakening the economy too much and causing a recession. Yet if it cuts rates too soon, it risks reigniting inflation. Most of the policymakers have said they think their rate policies are slowing growth and should curb inflation over time.

Inflation had fallen steadily in the second half of last year, raising hopes that the Fed could pull off a “soft landing,” whereby it manages to conquer inflation through higher interest rates without causing a recession. Such an outcome is difficult and rare.

But inflation came in unexpectedly high in the first three months of this year, delaying hoped-for Fed rate cuts and possibly imperiling a soft landing.

In early May, Chair Jerome Powell said the central bank needed more confidence that inflation was returning to its target before it would reduce its benchmark rate. Several Fed officials have said in recent weeks that they needed to see several consecutive months of lower inflation.

Some signs suggest that inflation will continue to cool in the coming months. Americans, particularly lower-income households, are pulling back on their spending. In response, several major retail and restaurant chains, including Walmart, Target, Walgreen’s, McDonald’s and Burger King, have responded by announcing price cuts or deals.
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BRUSSELS — The European Union moved Wednesday to hike tariffs on Chinese electric vehicles, escalating a trade dispute over Beijing’s subsidies for the exports that Brussels worries is hurting domestic automakers.

The European Commission, the EU’s executive arm, said it would impose provisional tariffs that would result in Chinese automakers facing additional duties of as much as 38%, up from the current level of 10%.

The commission said it reached out to Chinese authorities to discuss the findings of its investigation into the subsidies and “explore possible ways to resolve the issues.”

“Should discussions with Chinese authorities not lead to an effective solution,” the new rates would take effect on a provisional basis by July 4, the commission said in a press release.

Electric cars are the latest flash point in a broader trade dispute over what Brussels says is China’s unfair state support for green tech exports that also include solar panels, batteries and wind turbines.

Imports of Chinese-made EVs to the European Union have skyrocketed in recent years. They include vehicles from Western brands that have auto plants in China, including Tesla and BMW.

But EU officials complain that Chinese automakers like BYD and SAIC are increasing market share and undercutting European car brands on price thanks to Beijing’s massive subsidies.

The commission said an investigation it opened last year into China’s EV subsidies found that China’s battery electric vehicle value chain “benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers.”

The extra tariffs would vary by company. BYD would face an additional 17.4% charge. Geely, which owns Sweden’s Volvo, would be hit with a further 20%. For SAIC, it would be 38.1% extra.

Chinese Foreign Ministry spokesperson Lin Jian, speaking at a daily briefing, blasted the EU’s investigation as “typical protectionism” and said Beijing would “take all measures necessary to protect our legitimate rights and interests.”

U.S. President Joe Biden slapped major new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment last month. Biden said that Chinese government subsidies ensure the nation’s companies don’t have to turn a profit, giving them an unfair advantage in global trade.
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Washington — U.S. officials expect the Group of Seven (G7) wealthy democracies to send a tough new warning next week to smaller Chinese banks to stop assisting Russia in evading Western sanctions, according to two people familiar with the matter.

Leaders gathering at the June 13-15 summit in Italy hosted by Prime Minister Giorgia Meloni are expected to focus heavily during their private meetings on the threat posed by burgeoning Chinese-Russian trade to the fight in Ukraine, and what to do about it.

Those conversations are likely to result in public statements on the issue involving Chinese banks, according to a U.S. official involved in planning the event and another person briefed on the issue.

The United States and its G7 partners — Britain, Canada France, Germany, Italy and Japan — are not expected to take any immediate punitive action against any banks during the summit, such as restricting their access to the SWIFT messaging system or cutting off access to the dollar. Their focus is said to be on smaller institutions, not the largest Chinese banks, one of the people said.

Negotiations were still ongoing about the exact format and content of the warning, according to the people, who declined to be named discussing ongoing diplomatic engagements. The plans to address the topic at the G7 were not previously reported.

The White House did not respond to a request for comment. The U.S. Treasury Department had no immediate comment, but Treasury officials have repeatedly warned financial institutions in Europe and China and elsewhere that they face sanctions for helping Russia skirt Western sanctions.

Daleep Singh, deputy national security adviser for international economics, told the Center for a New American Security this week that he expected G7 leaders to target China’s support for a Russian economy now reoriented around the war.

“Our concern is that China is increasingly the factory of the Russian war machine. You can call it the arsenal of autocracy when you consider Russia’s military ambitions threaten obviously the existence of Ukraine, but increasingly European security, NATO and transatlantic security,” he said.

Singh and other top Biden administration officials say Washington and its partners are prepared to use sanctions and tighter export controls to reduce Russia’s ability to circumvent Western sanctions, including with secondary sanctions that could be used against banks and other financial institutions.

Washington is poised to announce significant new sanctions next week on financial and nonfinancial targets, a source familiar with the plans said.

This year’s G7 summit is also expected to focus on leveraging profits generated by Russian assets frozen in the West for Ukraine’s benefit.

Russia business moves to China’s small banks

Washington has so far been reluctant to implement sanctions on major Chinese banks – long deemed by analysts as a “nuclear” option – because of the huge ripple effects it could inflict on the global economy and U.S.-China relations.

Concern over the possibility of sanctions has already caused China’s big banks to throttle payments for cross-border transactions involving Russians, or pull back from any involvement altogether, Reuters has reported.

That has pushed Chinese companies to small banks on the border and stoked the use of underground financing channels or banned cryptocurrency. Western officials are concerned that some Chinese financial institutions are still facilitating trade in goods with dual civilian and military applications.

Beijing has accused Washington of making baseless claims about what it says are normal trade exchanges with Moscow.

The Biden administration this year began probing which sanctions tools might be available to it to thwart Chinese banks, a U.S. official previously told Reuters, but had no imminent plans to take such steps. In December, President Joe Biden signed an executive order threatening sanctions on financial institutions that help Moscow skirt Western sanctions.

The U.S. has sanctioned smaller Chinese banks in the past, such as the Bank of Kunlun, over various issues, including working with Iranian institutions.

China and Russia have fostered more trade in yuan instead of the dollar in the wake of the Ukraine war, potentially shielding their economies from possible U.S. sanctions.
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WASHINGTON — America’s employers added a strong 272,000 jobs in May, accelerating from April and a sign that companies are still confident enough in the economy to keep hiring despite persistently high interest rates.

Last month’s sizable job gain suggests that the economy is still growing steadily, propelled by consumer spending on travel, entertainment and other services. U.S. airports, for example, reported record traffic over the Memorial Day weekend. A healthy job market typically drives consumer spending, the economy’s principal fuel. Although some recent signs have raised concerns about economic weakness, May’s jobs report should help assuage those fears.

Still, Friday’s report from the government included some signs of a potential slowdown. The unemployment rate, for example, edged up for a second straight month, to a still-low 4%, from 3.9%, ending a 27-month streak of unemployment below 4%. That streak had matched the longest such run since the late 1960s.

President Joe Biden is still likely to point to Friday’s jobs report as a sign of the economy’s robust health under his administration. The presumptive Republican nominee, Donald Trump has focused his criticism of Biden’s economic policies on the surge in inflation, which polls show still weighs heavily in voters’ assessment of the economy.

Hourly paychecks accelerated last month, a welcome gain for workers although one that could contribute to stickier inflation. Hourly wages rose 4.1% from a year ago, faster than the rate of inflation and more quickly than in April. Some companies may raise their prices to offset their higher wage costs.

The Federal Reserve’s inflation fighters would like to see the economy cool a bit as they consider when to begin cutting their benchmark rate. The Fed sharply raised interest rates in 2022 and 2023 after the vigorous recovery from the pandemic recession ignited the worst inflation in 40 years.

Friday’s report will likely underscore Fed officials’ intention to delay any cuts to their benchmark interest rate while they monitor inflation and economic data. Although Chair Jerome Powell has said he expects inflation to continue to ease, he has stressed that the Fed’s policymakers need “greater confidence” that inflation will fall back to their 2% target before they would reduce borrowing costs. Annual inflation has declined to 2.7% by the Fed’s preferred measure, from a peak above 7% in 2022.

“This report is going to complicate the Fed’s job,” said Julia Pollak, chief economist for ZipRecruiter. “No one’s getting those very clear signals that they were hoping for that a rate cut is appropriate in July or September.”

Last month’s hiring occurred broadly across most of the economy. But job growth was particularly robust in health care, which added 84,000 jobs, and restaurants, hotels and entertainment providers, which gained 42,000.

Governments, particularly local governments, added 43,000 positions. Professional and business services, which includes managers, architects and information technology, grew by 33,000.

One potential sign of weakness in the May employment report was a drop in the proportion of Americans who either have a job or are looking for one; it fell from 62.7% to 62.5%. Most of that drop occurred among people 55 and over, many of whom are baby boomers who are retiring.

A surge in immigration in the past three years has boosted the size of the U.S. workforce and has been a key driver of the healthy pace of job growth. (Economists have said it isn’t clear whether the government’s jobs report is picking up all those gains, particularly among unauthorized immigrants.)

When the Fed began aggressively raising rates, most economists had expected the resulting jump in borrowing costs to drive unemployment to painfully high levels and cause a recession. Yet the job market has proved more durable than almost anyone had predicted. Even so, Americans remain generally frustrated by high prices, a continuing source of discontent that could imperil Biden’s reelection bid.

The economy expanded at just a 1.3% annual rate in the first three months of this year, the government said last week, a sharp pullback from the 3.4% pace in last year’s final quarter. Much of the slowdown, though, reflected reduced stockpiling by businesses and other volatile factors, while consumer and business spending made clear that demand remained solid.

In April, though, consumer spending, adjusted for inflation, declined. That raised concern among economists that elevated inflation and interest rates are increasingly pressuring some consumers, particularly younger and lower-income households.

A key reason why the economy is still producing solid net job growth is that layoffs remain at historic lows. Just 1.5 million people lost jobs in April. That’s the lowest monthly figure on record — outside of the peak pandemic period — in data going back 24 years. After struggling to fill jobs for several years, most employers are reluctant to lay off workers.
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Brussels — McDonald’s MCD.N does not have the right to use the term “Big Mac” for poultry products in Europe after not using it for them for five consecutive years, the region’s second top court said on Wednesday, a partial win for Irish rival Supermac’s in a long-running trademark dispute.

The Luxembourg-based General Court’s ruling centered on Supermac’s attempt in 2017 to revoke McDonald’s use of the name Big Mac, which the U.S. company had registered in 1996 for meat and poultry products and services rendered at restaurants.

The European Union Intellectual Property Office (EUIPO) dismissed Supermac’s application for revocation and confirmed McDonald’s use of the term for meat and chicken sandwiches, prompting the Irish company to challenge the decision.

Supermac’s, which opened its first restaurants in Galway in 1978 and had sought to expand in the United Kingdom and Europe, sells beef and chicken burgers as well as fried chicken nuggets and sandwiches.

The General Court rejected McDonald’s arguments and partially annulled and altered EUIPO’s decision.

“McDonald’s loses the EU trade mark Big Mac in respect of poultry products,” judges ruled.

“McDonald’s has not proved genuine use within a continuous period of five years in the European Union in connection with certain goods and services.”

The U.S. fast-food chain said in an email it can still continue to use the Big Mac trademark, which it uses chiefly for a beef sandwich.

Supermac’s founder Pat McDonagh told Ireland’s Newstalk Radio that the decision was “a big win for anyone with the surname Mac.”

“It does mean we can expand elsewhere with Supermac’s across the EU, so that is a big win for us today,” he told the radio station.

Trademark owners should pay attention to the ruling, said Pinsent Masons IP lawyer Matthew Harris.

“This is a huge wakeup call and owners of well-known trademarks cannot simply rest on the premise ‘it is obvious the public know the brand and we have been using it’,” he said.

“The case highlights that even global renowned brands are held to the same scrutiny when having to evidence genuine use of a trademark in a given territory.”

The ruling can be appealed to the Court of Justice of the European Union, Europe’s highest.

The case is T-58/23 Supermac’s v EUIPO – McDonald’s International Property (BIG MAC). 
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Chicago — Mark Tuttle planted more soy and less corn on his northern Illinois farm this spring as prices for both crops hover near three-year lows and soybeans’ lower production costs offered him the best chance of turning a profit in the country’s top soy producing state.

He even planted soybeans in one of his fields for a second straight year, breaking the traditional soy-corn-soy rotation for field management. He and many other farmers are hoping to just minimize losses.

Planting more soy at a time of sputtering demand from importers and domestic processors will only serve to drive prices lower, further swell historically large global supplies and erode U.S. farm incomes already poised for the steepest annual drop ever in dollar terms.

But Midwest farmers’ other main options — seeding more corn or leaving fields fallow — could have resulted in even wider losses.

“There’s a better chance of making money with soybeans than there is for corn right now,” Tuttle said. “But if we have another bigger crop, prices are going to go lower and that’s not going to bode well for the farmer.”

In March, the U.S. Department of Agriculture forecast farmers would plant 86.5 million acres of soybeans nationwide this spring, the fifth most ever. Some analysts expect soybean acres to increase by another million acres or more as heavy rains close the window on corn planting.

In nearby Princeton, Illinois, Evan Hultine also increased soy plantings and scaled back corn. High production costs due in part to a jump in interest rates looked likely to erode most or all of his corn returns, while soybeans remained marginally profitable, he said.

The farm’s profits will likely be the thinnest in at least five years, Hultine said.

In an annual early season crop budget estimate, University of Illinois agricultural economists projected negative average farmer returns in the state for both crops, though losses would be smaller for soybeans.

Unprofitable crops 

In northern Illinois, farmers could lose $140 per acre on average for corn and $30 an acre for soybeans with autumn delivery prices of $4.50 and $11.50 a bushel, respectively, the analysis showed. Actual returns vary significantly from farm to farm, however, depending on factors like crop yields, the timing of grain sales and whether farmers own or rent their land.

Fertilizer costs are down from highs last year, but crop prices are also down, while land costs remain elevated and borrowing rates for operating loans and equipment have jumped, likely forcing farmers to cut expenses, the economists said.

When looking to cut costs, farmers often favor planting soybeans rather than corn because they require less fertilizer and pesticides and seed costs tend to be lower.

High interest rates have been a particularly painful expense recently.

“If you’re borrowing $700 an acre to put a corn crop in at 7% to 8%, you’re talking about some real dollars there just on the price of money. You can put a bean crop in a lot cheaper. Your interest cost per acre might be half,” Tuttle said.

More soy, less corn

An early-spring forecast from the USDA projected soy plantings would expand by 3.5% this year while corn plantings were expected to shrink 4.9%.

The expansion is expected to swell the U.S. soy stockpile next season by more than 30% to the highest in five years and the sixth highest level on record as demand from the domestic and export markets is not keeping pace with rising production, according to the USDA.

Now, rain-saturated fields in some areas could clip corn acres and even further expand seedings of soybeans, which, unlike corn, can be planted well into June without significant risk to yields.

Cash prices offered for the next corn and soybean harvest have improved from earlier this spring in Spencer, Iowa, where Brent Swart has been struggling to plant the last of his corn acres due to overly wet weather. But neither crop pencils a profit at current prices.

Nearly a foot of rain over the past month, seven inches more than normal, has left his fields too soggy for field work. Swart estimates his remaining corn fields may not be in shape to plant until after his planting deadline date of June 1, when crop insurance benefits begin to drop with each day.

Swart’s best option in some of his fields may be to file an insurance claim saying he was prevented from planting due to waterlogged soils. Soybean prices remain some 40 cents a bushel under his estimated cost of production, he said.

“If you switch to soybeans, you’re potentially looking at a loss. If you prevent plant, you’re looking at more of a breakeven scenario,” Swart said.

Only farmers with severe weather issues will be able to file for insurance, however.

Weather delays and a favorable price versus corn could boost soy plantings by 500,000 to 1 million acres above the USDA’s latest forecast for 86.5 million, said Tanner Ehmke, lead economist for grains and oilseeds at CoBank.

“The signal from the marketplace to the farmer right now is that, if you have a doubt about your acreage, send those acres to soybeans,” he said.
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ORAN, Algeria — Algeria wants to lure more visitors to the cultural and scenic treasures of Africa’s largest country, shedding its status as a tourism backwater and expanding a sector outshone by competitors in neighboring Morocco and Tunisia.  

The giant north African country offers Roman and Islamic sites, beaches and mountains just an hour’s flight from Europe, and haunting Saharan landscapes, where visitors can sleep on dunes under the stars and ride camels with Tuareg nomads.  

But while tourist-friendly Morocco welcomed 14.5 million visitors in 2023, bigger, richer Algeria hosted just 3.3 million foreign tourists, according the tourism ministry.  

About 1.2 million of those holiday-makers were Algerians from the diaspora visiting families.  

The lack of travelers is testimony to Algeria’s neglect of a sector that remains one of world tourism’s undiscovered gems.  

As Algeria’s oil and gas revenues grew in the 1960s and 70s, successive governments lost interest in developing mass tourism. A descent into political strife in the 1990s pushed the country further off the beaten track.  

But while security is now much improved, Algeria needs to tackle an inflexible visa system and poor transport links, as well as grant privileges to local and foreign private investors to enable tourism to flourish, analysts say.  

Saliha Nacerbay, General Director of the National Tourism Office, outlined plans to attract 12 million tourists by 2030 – an ambitious fourfold increase.  

“To achieve this, we, as the tourism and traditional industry sector, are seeking to encourage investments, provide facilities to investors, build tourist and hotel facilities,” she said, speaking at the International Tourism and Travel Fair, hosted in Algiers from May 30 to June 2.  

Algeria has plans to build hotels and restructure and modernize existing ones. The tourism ministry said that about 2,000 tourism projects have been approved so far, 800 of which are currently under construction.  

The country is also restoring its historical sites, with 249 locations earmarked for tourism expansion. Approximately 70 sites have been prepared, and restoration plans are underway for 50 additional sites, officials said.  

French tourist Patrick Lebeau emphasized the need to improve infrastructure to fully realize Algeria’s tourism prospects.  

“Obviously, there is a lot of tourism potential, but much work still needs to be done to attract us,” Lebeau said.  

Tourism and travel provided 543,500 jobs in Algeria in 2021, according to the Statista website. In contrast, tourism professionals in Morocco estimate the sector provides 700,000 direct jobs in the kingdom, and many more jobs indirectly.
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