Weekly Market Update With Lilja, Progressive Ag
According to a press release by the Minnesota Pollution Control Agency, Minnesota will adopt California Air Resources Board policies relating to Zero Emission Vehicles (ZEV) for Minnesota’s vehicle fleet. Back in 2007 Minnesota passed the Next Generation Energy Act into law with a goal of reducing greenhouse gas emissions by 30% by 2025.
The press release stated that reductions of 8% GHG have been accomplished in Minnesota between 2005 and 2018. Since progress has not been to the standards of the 2007 law, Minnesota wants to step up its efforts. The press release stated that in July of 2020 a survey indicated 171 new electric vehicles in Twin Cities lots out of
19,300. That’s 0.00886% of new vehicles.
A glass half full person would state that there is a lot more market share there for the taking. A glass half empty person would certainly question the logic in making a big rule change when demand is less than 1% of the fleet. Call me a doubting Thomas but
If they want to take the supply route, they could simply make a lot more vehicles Flex Fuel compatible for under $100 each rather than incurring the massive cost of charging station infrastructure. After my annual post deer hunting cleaning of my Flex Fuel pickup truck, I found a corroded flashlight under the back seat. It wasn’t pretty. The batteries didn’t prefer the northern weather ex
tremes. But in fairness, it was sitting under the backseat for a year.
Changes in demand are trickier and usually take longer for the market to realize and absorb. The California Air Resource Board was founded before the United States Environmental Protection Agency was founded. CARB sets the bar for emissions reduction standards and eventually the EPA gives into them through increased
regulations on the other 49 states. It will be interesting to see how far Minnesota can get from 0.00886% by the year 2025. Hopefully Elon Musk or someone can develop a better battery powered flashlight for the backseat of my truck during that timeframe.
Corn futures were the big story on the week exceeding $5.00 futures for the first time since May of 2014. It was also the first time since 1959
that corn futures had 15 consecutive days of gains. The grain markets continue to show nervousness over the South American growing season. Argentina dryness looks to expand to 50% of area in the next two weeks while Brazil could expand from 15% to 35% of primary production area in that same timeframe. Adding fuel to the fire was a recent China cold snap that could affect
15% of wheat area. The feds continue to print money with the US Dollar making a new low for the move earlier this week dropping to 89.165. All of these factors show that breaks will be well supported.
Progressive Ag Marketing, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Progressive Ag Marketing’s Research Department.