‘Desperate for tires’ Components shortage roils U.S. harvest

By P.J. Huffstutter and Mark Weinraub

CHICAGO (Reuters) – Dale Hadden cannot find any spare tires for his combine harvester. So the Illinois farmer told his harvest crew to avoid driving on the sides of roads this autumn to avoid metal scraps that could shred tires.

New Ag Supply in Kansas is pleading with customers to order parts now for spring planting. And in Iowa, farmer Cordt Holub is locking up his machinery inside his barn each night, after thieves stole hard-to-find tractor parts from a local Deere & Co dealership.

“You try to baby your equipment, but we’re all at the mercy of luck right now,” said Holub, a fourth-generation corn and soybean farmer in Buckingham, Iowa.

Manufacturing meltdowns are hitting the U.S. heartland, as the semiconductor shortages that have plagued equipment makers for months expand into other components. Supply chain woes now pose a threat to the U.S. food supply and farmers’ ability to get crops out of fields.

Farmers say they are scrambling to find workarounds when their machinery breaks, tracking down local welders and mechanics. Growers looking to buy tractors and combines online are asking for close-up photos of the machine’s tires, because replacements are expensive and difficult to find, said Greg Peterson, founder of the Machinery Pete website which hosts farm equipment auctions.

“As harvest ends, we will see farmers at equipment auctions not for the machinery – but for parts,” Peterson said. “We’re already hearing from guys talking about buying a second planter or sprayer, just for parts.”

For some farmers, the shortages are forcing them to reuse – or repair – old parts.

At their small welding shop in western Washington, Rami and Bob Warburton can barely keep up with all the orders from farmers needing something repaired from fittings for irrigation systems to a cracked bulldozer bucket.

“We were in the middle of a drought up here,” Rami Warburton said. “At that time, they couldn’t wait to water their fields for a month. The crops will be dead by then.”

‘TYLENOL MOMENTS’

Kinks in the supply chain due to COVID-19 shutdowns in manufacturing hubs in the United States and Asia, a container shortage snarling major ports, and a dearth of workers prevent equipment manufacturers from fully cashing in on a lucrative moment, when grain prices have soared to the highest in nearly a decade.

The Purdue University/CME Group Ag Economy Barometer, a monthly measure of farmer economic sentiment, fell 10% to its lowest level since July 2020 in early October. Supply concerns are weighing heavily on growers, with 55% of farmers surveyed saying that low inventories have affected their plans to buy machinery.

Access to steel, plastic, rubber and other raw materials has been scarce during the pandemic, and manufacturers are preparing for even more shocks after power shortages forced several Chinese smelters to cut production in recent weeks.

When executives from farm machinery maker AGCO Corp visited Midwest suppliers this summer, they found some companies were operating at only 60% staffing levels, said Greg Toornman, who oversees AGCO’s global supply chain management.

Toornman said staff levels are dropping at some suppliers in the Dakotas, Nebraska and Texas, as workers object to President Joe Biden’s vaccine mandate, drop out of the workforce for fear of getting COVID-19 or move to other jobs.

“It’s the perfect storm of Tylenol moments,” Toornman said. “It’s one headache after another.”

The supply squeeze has put particular pressure on equipment dealerships, who typically see their service business boom during the traditional September through November harvest season.

This year, some have resorted to sifting through decade-old inventory for solutions. One pain point for dealerships is an industry-wide shortage of GPS receivers, which are used to run tractor guidance and data systems.

At Ag-Pro, the largest privately-owned Deere & Co dealership in North America, staff in Ohio have been digging out GPS units that date back to 2004. Until now, they were essentially worthless.

But producers can still use them to record a digital harvest map of their farms – something many need when talking to their bankers, landlords and crop insurance agents.

COMPONENTS TRIAGE

Equipment manufacturers are faced with a painful choice this harvest season: Send parts to factories to build new tractors and combines to sell to farmers or redirect those parts into the field to repair broken equipment for existing customers?

For AGCO and rival manufacturer CNH Industrial N.V., the answer is the latter.

“You can’t afford not to support those customers in the field,” AGCO’s Toornman said. “When you’re harvesting, timing is everything.”

CNH estimates that supply chain constraints ranging from increases in freight to higher raw materials prices have cost the company $1 billion.

That lag has forced the company to turn some factory parking lots into storage lots. At CNH’s combine plant in Grand Island, Nebraska, hundreds of unfinished combines sit outside, waiting for parts.

Meanwhile, CNH is redirecting components that can be used on its Case IH and New Holland equipment to customers in the field, a company representative said.

CNH has been signaling to dealers that supply chain problems and parts shortages for Case IH farm equipment are ongoing, according to Reuters interviews with six dealers. The manufacturer said in a statement it is meeting customer needs “the best we can given these unprecedented challenges.”

Deere said it is reorganizing shipping containers to make more room for goods, leasing extra cranes to expedite unloading ships at ports, and expanding its trucking fleet.

But component shortages are “particularly challenging for farmers facing what is already a short window of time to harvest,” said Luke Gakstatter, senior vice president of Deere’s aftermarket and customer support.

In some cases, the company has delivered unfinished machinery to customers. Missouri farmer Andy Kapp’s brand new combine rolled off the assembly line missing some of the high-tech cameras that help provide the very efficiency he paid hundreds of thousands of dollars for.

But he is using it anyway, and even has stocked up on some extra parts, in case the combine breaks down.

“As you get toward the end of harvest, machinery and people get more tired,” Kapp said. “It’s a new machine. It won’t surprise us if there are a few loose bolts.”

(Reporting By P.J. Huffstutter and Mark Weinraub in Chicago; additional reporting by Dane Rhys in Monroeville, Ohio; Editing by Caroline Stauffer and Marguerita Choy)

Iowa farm services firm: systems offline due to cybersecurity incident

By Karl Plume and Christopher Bing

CHICAGO (Reuters) -Iowa-based farm services provider NEW Cooperative Inc said on Monday its systems were offline to contain a “cybersecurity” incident just as the U.S. farm belt gears up for harvest.

The cooperative operates grain storage elevators in the top U.S. corn producing state, buys crops from farmers, sells fertilizer and other chemicals needed to grow crops and owns technology platforms for farmers that provide agronomic advice on the way to maximize their harvests.

“We have proactively taken our systems offline to contain the threat, and we can confirm it has been successfully contained,” NEW Cooperative Inc said in a statement. “We also quickly notified law enforcement and are working closely with data security experts to investigate and remediate the situation.”

Several grain storage elevators operated by NEW Cooperative contacted by Reuters were open.

The timing of the attack is making it crucial that NEW gets their systems back online as soon as possible as many farmers will start their combines this week and begin delivering crops to NEW’s elevators across Iowa, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

“They have got you boxed into a corner,” Roose said. “Harvest is right now. This is the week that we are just starting to ramp up harvest, particularly for soybeans.”

Cybersecurity has risen to the top of the agenda for the Biden administration after a series of high-profile attacks on network management company SolarWinds Corp, the Colonial Pipeline’s oil network, meat processing company JBS and software firm Kaseya. The attacks hurt the United States far beyond just the companies hacked, affecting fuel and food supplies.

A spokesperson for the U.S. Cybersecurity and Infrastructure Security Agency declined to comment on the incident at NEW Cooperative.

The Federal Bureau of Investigation did not immediately respond to a request for comment.

“This is a very clear attack on an organization that is part of our critical infrastructure,” said Allan Liska, a senior analyst with U.S. cybersecurity firm Recorded Future. “This could result in disruptions to food delivery in parts of the country.”

A Russian-speaking cybercriminal group named BlackMatter said on its website they had recently stolen data from NEW Cooperative.

BlackMatter is known for using ransomware to threaten their victims with data leaks, often extorting them for a crypto currency payment.

The claim follows a July meeting between U.S. President Joe Biden and Russian President Vladimir Putin, where Biden reportedly told Putin that “critical infrastructure” companies should be off limits to ransomware gangs.

Cybersecurity experts and federal prosecutors say ransomware groups often operate from Russia or Ukraine. The “food and agriculture” industry is publicly defined as a critical infrastructure sector by the Department of Homeland Security.

(Reporting by Karl Plume, Editing by Franklin Paul, David Gregorio and Marguerita Choy)

Drought spreads in key U.S. crop states

By Karl Plume

(Reuters) – A harsh drought grew more severe across major parts of the U.S. farm belt this week, threatening recently planted corn, soybean and spring wheat crops in Iowa, Minnesota and the Dakotas, meteorologists and climatologists said on Thursday.

Rains forecast for the northern Midwest and Great Plains this weekend and next week will bring relief to some areas. But the severe moisture deficits suggest crop yields in key U.S. production areas remain at risk.

Drought has already scorched much of the U.S. West, prompting farmers in California to leave fields fallow and triggering water and energy rationing in several states.

Crop development in the central U.S. is highly watched this year as grain and oilseed prices hover around the highest in a nearly a decade and global supplies tighten.

“It’s certainly causing some stress there, especially to the spring wheat,” said Don Keeney, senior agricultural meteorologist with Maxar Technologies.

About 41% of Iowa, the nation’s top corn producer and No. 2 soybean state, was under severe drought as of Tuesday, up from less than 10% a week earlier, according to the weekly U.S. drought monitor published on Thursday.

Cooler weather this weekend and some rain through next week will bring some relief to crops in the western Corn Belt, although far northern areas may see less rain.

“Montana, Nebraska, Minnesota and even northern Iowa would still be a little shortchanged, especially the Dakotas,” Keeney said.

Conditions in North Dakota, the top producer of high-protein spring wheat that is used in bread and pizza dough, remained dire, with about two-thirds of the state under extreme or exceptional drought, the most severe categories.

October to April was the driest stretch in North Dakota history since record keeping began 127 years ago, Gov. Doug Burgum told a town hall meeting in Washburn, North Dakota, on Wednesday.

“We know that we’ve got a full-blown crisis in the state,” Burgum told the meeting.

More than 100,000 acres, or 156 square miles, of North Dakota have already burned in wildfires this year, up from about 12,000 for the entire fire season last year, Burgum said.

Farmer and North Dakota Grain Growers Association Director Cale Neshem called the heat and dryness a “double whammy” that will slash his wheat harvest.

“There’s not going to be much there,” he said.

Drought in the western Corn Belt has already likely trimmed the U.S. corn yield average by 2 to 4 bushels per acre, said Dan Basse, president of AgResource Co in Chicago.

However, conditions in July and August, critical months for corn and soybeans, respectively, will determine the extent of yield losses and the price response, he said.

Grain and soybean futures on the Chicago Board of Trade fell sharply on Thursday as rain in the near-term forecast triggered risk-off selling.

“If we don’t get the rain, it’s going to be something to behold on the upside (for prices) because the yields will fall off the table,” Basse said.

(Reporting by Karl Plume, Tom Polansek and Julie Ingwersen in Chicago; editing by Jonathan Oatis)

COVID-19 mask mandates latest flashpoint for U.S. schools

By Sharon Bernstein and Colleen Jenkins

(Reuters) – Two days after the school board in Johnston, Iowa, decided last week to keep requiring mask wearing in schools to prevent coronavirus transmission, the state’s Republican governor signed a law that immediately prohibited such mandates.

The reaction in Johnston was swift and sharply divided, with some parents applauding the move to make masks optional for the waning days of the school year and others calling it dangerous given the continued threat from COVID-19.

“I just find it super disappointing and selfish,” said local parent Sara Parris, who is still sending her two sons to class with face coverings.

The debate over masks in schools is yet another flashpoint for U.S. educators grappling with how to keep students and staff safe during the pandemic. Friction around returning to in-person learning has given way to heated disagreements over whether masks should be shed for good.

Iowa and Texas have banned school districts from requiring kids to wear masks on campus. Similar moves are under consideration in other states and local jurisdictions, spurred in part by the U.S. Centers for Disease Control and Prevention (CDC) saying on May 13 that vaccinated people no longer needed to wear masks in most situations.

With children under age 12 not yet eligible for vaccinations, however, the CDC recommends face coverings in educational settings at least through the end of the school year. While children are less likely to suffer severe COVID-19, they are not without risk and can readily transmit the virus.

Iowa Governor Kim Reynolds said on Twitter that her state was “putting parents back in control of their child’s education and protecting the rights of all Iowans to make their own health care decisions.”

Responding to the governor via Twitter, Democratic state Senator Sarah Trone Garriott said: “I’m hearing from lots of parents reporting that their children are being bullied for wearing a mask. Are you going to stand up for their personal choice?”

At the Johnston school board meeting last week, most parents spoke in favor of making masks optional, with one mother calling masking requirements for children abusive. Other parents emailed school officials asking for mask mandates to remain in place.

“It’s been difficult to try to find the right balance,” Justin Allen, president of the school board and a parent of two high school students, said in an interview.

“Just when you think you are in kind of a comfort zone and you think you can focus on education for awhile, something else emerges and you have another controversial issue to address.”

CDC STUDY BACKS MASKS

In North Carolina, parents opposed to mandatory face coverings staged a protest in Wake County after Democratic Governor Roy Cooper lifted mask requirements in some situations but not in schools.

“Parents should determine if their child should wear a mask, not school systems or the governor,” parent Nazach Snapp wrote in a letter to the Wake County school board.

Others urged the board to continue its mask requirement.

“Given that vaccines are not available yet for children under 12, I implore you to continue to require students in middle and elementary settings to wear masks,” wrote parent Mimosa Hines.

A study published by the CDC on Friday showed that in elementary schools that required masks, transmission of COVID-19 was lower by 37% than in schools where masks were optional. The study, which included 169 elementary schools in Georgia that were open for in-person instruction, also showed improved ventilation slowed virus transmission.

It advised increasing, not decreasing, the use of masks and ventilation in schools.

The American Federation of Teachers (AFT) and the National Education Association, two unions that represent a total of about 5 million teachers and staff, have urged states to keep their mask requirements at least through the end of this school year.

While nearly 90% of AFT’s members have been vaccinated against COVID-19, many of their students have not.

U.S. regulators earlier this month authorized use of the COVID-19 vaccine from Pfizer Inc and partner BioNTech SE for children ages 12 to 15. It is still being tested for use in younger children.

AFT President Randi Weingarten said Texas and Iowa “jumped the gun” in removing their mask requirements. Politics around masks, along with unclear guidance from the CDC, have left teachers in an awkward position, she said.

“Teachers don’t want to become the mask police,” she said. “It’s time to let us actually teach.”

(Reporting by Sharon Bernstein in Sacramento, California and Colleen Jenkins in Winston-Salem, North Carolina; Editing by Bill Berkrot)

Iowa joins U.S. states forbidding COVID-19 mask mandates in schools

(Reuters) – Iowa joined a handful of other U.S. states on Thursday in passing a law that forbids cities, counties and local school districts from requiring people to wear face masks that protect against the spread of the coronavirus.

Governor Kim Reynolds, a Republican, signed the measure into law just hours after it was approved by the state legislature. Texas and Florida, which also have Republican governors, have passed similar measures.

“The state of Iowa is putting parents back in control of their child’s education and taking greater steps to protect the rights of all Iowans to make their own healthcare decisions,” Reynolds said in a statement.

A week ago, the U.S. Centers for Disease Control and Prevention (CDC) said people vaccinated against COVID-19 no longer need to wear a mask in most settings because the chance of them catching or transmitting the airborne coronavirus is so low. But it still advised face coverings be worn in schools, medical settings and public transit.

The decision by Texas, Florida and Iowa to ignore some of the guidance comes after a year in which many conservative political leaders have cast mask mandates as an erosion of individual liberty rather than a public health issue.

Some Democrat-led states, such as New York and Connecticut, have adopted the CDC advice and said vaccinated people are no longer bound by mask mandates, though unvaccinated people must still wear them if they cannot distance themselves from others. Those states also have not stopped individual businesses from requiring visitors to wear masks.

In his Tuesday executive order, Texas Governor Greg Abbott said schools must scrap any mask requirements by June 4. However, public hospitals and state jails may still impose mask requirements, the order said.

On Wednesday, the Utah legislature passed a bill forbidding public schools and state universities from requiring masks, which now heads to the governor to be signed into law.

(Reporting by Peter Szekely and Jonathan Allen in New York; Editing by Bill Berkrot)

U.S. loses one life every 33 seconds to COVID-19 in deadliest week so far

(Reuters) – In the United States last week, someone died from COVID-19 every 33 seconds.

The disease claimed more than 18,000 lives in the seven days ended Dec. 20, up 6.7% from the prior week to hit another record high, according to a Reuters analysis of state and county reports.

Despite pleas by health officials not to travel during the end-year holiday season, 3.2 million people were screened at U.S. airports on Friday, Saturday and Sunday.

Health officials are worried that a surge in infections from holiday gatherings could overwhelm hospitals, some of which are already at capacity after Thanksgiving celebrations.

And while the country has begun to administer two new vaccines, it may be months before the inoculations put a dent in the coronavirus outbreak.

The number of new COVID-19 cases last week fell 1% to nearly 1.5 million. Tennessee, California and Rhode Island had the highest per capita new cases in the country, according to the Reuters analysis. In terms of deaths per capita, Iowa, South Dakota and Rhode Island were the hardest hit.

Across the United States, 11.3% of tests came back positive for the virus, down from 12% the prior week, according to data from the volunteer-run COVID Tracking Project. Out of 50 states, 31 had a positive test rate of 10% or higher. The highest rates were in Iowa and Idaho at over 40%.

The World Health Organization considers positive test rates above 5% concerning because it suggests there are more cases in the community that have not yet been uncovered.

(Graphic by Chris Canipe, writing by Lisa Shumaker, editing by Tiffany Wu)

U.S. COVID-19 cases cross 11 million as pandemic intensifies

By Roshan Abraham and Seerat Gupta

(Reuters) – The number of coronavirus cases in the United States crossed the 11-million mark on Sunday reaching yet another grim milestone, according to a Reuters tally, as the third wave of COVID-19 infections surged across the country.

Reuters data shows the pace of the pandemic in the United States has quickened, with one million more new cases from just 8 days ago when it hit 10 million, making it the fastest since the pandemic began. This compares with 10 days it took to get from 9 to 10 million and 16 days it took to reach 9 million from 8 million cases.

The United States, hardest-hit by the coronavirus, crossed 10 million COVID-19 cases on November 8 and is reporting over 100,000 daily cases for the past 11 days straight.

The latest 7-day average, shows the United States is reporting more than 144,000 daily cases and 1,120 daily deaths, the highest for any country in the world.

Texas and California have reported the highest number of COVID-19 infections across the United States, together accounting for about 2.1 million cases or about 19% of the total cases since the pandemic began, according to Reuters analysis.

As COVID-19 related hospitalizations continue to rise, crossing 69,000 on Saturday, U.S. President-elect Joe Biden’s top advisers have stressed the need to control the pandemic, warning that local healthcare systems are at a tipping point.

The Midwest remains the hardest-hit region based on the most cases per capita with North Dakota, South Dakota, Wisconsin, Iowa and Nebraska the top five worst-affected U.S. states.

Illinois, which has emerged as the pandemic’s new epicenter in the region as well as across the country, reported a record 15,433 new cases on Friday, the most of any state in a 24-hour period, surpassing the previous all-time high of 15,300 set by Florida in July.

Several states this week re-imposed restrictions to curb the spread of the virus across the nation. North Dakota became the latest state to require that face coverings be worn in public, as it joins 39 other states this month in reporting record daily jumps in new cases.

State governors urged residents to stay home as much as possible, including Nevada Democrat Steve Sisolak, who said late on Friday that he became the fourth governor to become infected with the virus.

The United States accounts for about 20% of more than 54 million global cases and close to 19% of the 1.31 million deaths reported worldwide, according to a Reuters tally.

(Reporting by Roshan Abraham and Seerat Gupta in Bengaluru; editing by Diane Craft)

Chicagoans told to stay home, Detroit moves school online as COVID-19 cases surge

By Brendan O’Brien and Maria Caspani

CHICAGO (Reuters) – Chicago issued a stay-at-home advisory and Detroit stopped in-person schooling on Thursday to staunch the coronavirus outbreak as more than a dozen states reported a doubling of new COVID-19 cases in the last two weeks.

Officials in the Midwestern cities along with New York, California, Iowa and other states were re-imposing this week restrictions that had been eased in recent months. The moves were driven by surging infection rates and concern that the onset of winter, when people are more likely to gather indoors, will worsen the trends.

Chicago Mayor Lori Lightfoot on Thursday issued a 30-day advisory calling upon residents to stay at home and have no visitors, even during Thanksgiving festivities. The third- largest city in the United States could see 1,000 more COVID-19 deaths by the end of 2020 if residents do not change behaviors to stop the spread of the virus, Lightfoot said.

Lightfoot set a 10-person limit on gatherings, including indoor and outdoor events, and said travelers from out of the state needed to quarantine for 14 days or submit a negative coronavirus test.

“None of us can keep maintaining the status quo in the face of this very stark reality,” the mayor told reporters, noting the average number of cases have gone from 500 to 1,900 per day over the last month and the city’s positivity rate shot up to 15% from 5%.

Illinois has emerged as the pandemic’s new epicenter in the region as well as across the country. In the past two weeks, the state reported about 130,000 cases, the highest in the country and more than hard-hit Texas and California.

A Reuters tally showed coronavirus cases more than doubling in 13 states in the past two weeks.

In Michigan, the Detroit public school system – the state’s largest – said on Thursday it would suspend of in-person education until Jan. 11, with the infection rate in the city rising rapidly. The district will hold all classes online starting Monday.

New York City Mayor Bill de Blasio said on Thursday that the country’s largest school system was preparing for a possible shutdown but closure might still be averted.

“We’re not there yet, and let’s pray we don’t get there,” de Blasio told reporters. De Blasio has said schools will close if the percentage of city residents testing positive, now at a seven-day average of 2.6%, surpasses 3%.

Total COVID-19 cases across the United States hit an all-time daily high for a second day in a row on Wednesday at 142,279 and crossed the 100,000 mark for an eighth consecutive day, Reuters data showed.

The number of people hospitalized with the virus surged to at least 64,939 by late Wednesday, the highest ever for a single day during the pandemic, increasing by more than 41% in the past two weeks. The death toll rose by 1,464 to a total of 241,809.

Vaccine developers have offered some good news this week, with Pfizer and BioNTech trumpeting successful early data from a large-scale clinical trial of a coronavirus vaccine.

Health experts are hopeful that a vaccine might become available in the coming months for the most vulnerable populations and for healthcare providers.

But with a more lengthy timeline for the general public, many are urging strict adherence to well-known virus mitigation measures like wearing a face covering, washing hands and maintaining a safe social distance.

“We hope that by the time you get into the second quarter, end of April, early May, May-June – somewhere around that time, the ordinary citizen should be able to get it,” Dr. Anthony Fauci, a top U.S. health official, told the ABC “Good Morning America” program on Thursday.

“What we need to do is what we’ve been talking about for some time now but really doubling down on it.”

(Reporting by Maria Caspani in New York and Anurag Maan in Bengaluru and Brendan O’Brien in Chicago, additional reporting by Peter Szekely in New York and Doina Chiacu in Washington; Editing by Howard Goller and Cynthia Osterman)

New U.S. COVID-19 cases up 34% last week, set fresh records

By Michael Erman and Julie Steenhuysen

(Reuters) – Pfizer Inc’s experimental COVID-19 vaccine is more than 90% effective based on initial trial results, the drugmaker said on Monday, a major victory in the war against a virus that has killed over a million people and battered the world’s economy.

Experts welcomed the first successful interim data from a large-scale clinical test as a watershed moment that showed vaccines could help halt the pandemic, although mass roll-outs, which needs regulatory approval, will not happen this year.

Pfizer and German partner BioNTech SE said they had found no serious safety concerns yet and expected to seek U.S. authorization this month for emergency use of the vaccine, raising the chance of a regulatory decision as soon as December.

If granted, the companies estimate they can roll out up to 50 million doses this year, enough to protect 25 million people, and then produce up to 1.3 billion doses in 2021.

“Today is a great day for science and humanity,” said Pfizer Chief Executive Albert Bourla.

“We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen,” he said.

Experts said they still wanted to see the full trial data, which have yet to be peer-reviewed or published in a medical journal, but the preliminary results looked encouraging.

“This news made me smile from ear to ear. It is a relief to see such positive results on this vaccine and bodes well for COVID-19 vaccines in general,” said Peter Horby, professor of emerging infectious diseases at the University of Oxford.

There are still many questions, such as how effective the vaccine is by ethnicity or age, and how long it will provide immunity, with the “new normal” of social distancing and face covering set to remain for the foreseeable future.

Pfizer expects to seek U.S. emergency use authorization for people aged 16 to 85. To do so, it will need two months of safety data from about half the study’s 44,000 participants, which is expected in the third week of November.

U.S. Health and Human Services Secretary Alex Azar said it would take several weeks for U.S. regulators to receive and process data on the vaccine before the government could potentially approve it.

MARKETS SURGE

The prospect of a vaccine electrified world markets with the S&P 500 and Dow hitting record highs as shares of banks, oil companies and travel companies soared. Shares in companies that have thrived during lockdowns, such as conferencing platform Zoom Video and online retailers, tumbled.

Pfizer shares jumped more than 11% to their highest since July last year, while BioNTech’s stock hit a record high.

Shares of other vaccine developers in the final stage of testing also rose with Johnson & Johnson up 4% and Moderna Inc, whose vaccine uses a similar technology as the Pfizer shot, up 8%. Britain’s AstraZeneca, however, fell 2%. Moderna is expected to report results from its large-scale trial later this month.

“The efficacy data are really impressive. This is better than most of us anticipated,” said William Schaffner, infectious diseases expert at Vanderbilt University School of Medicine in Nashville, Tennessee. “The study isn’t completed yet, but nonetheless the data look very solid.”

U.S. President Donald Trump welcomed the test results, and the market boost: “STOCK MARKET UP BIG, VACCINE COMING SOON. REPORT 90% EFFECTIVE. SUCH GREAT NEWS!” he tweeted.

President-elect Joe Biden said the news was excellent but did not change the fact that face masks, social distancing and other health measures would be needed well into next year.

The World Health Organization said the results were very positive, but warned there was a funding gap of $4.5 billion that could slow access to tests, medicines and vaccines in low- and middle-income countries.

‘NEAR ECSTATIC’

“I’m near ecstatic,” Bill Gruber, one of Pfizer’s top vaccine scientists, said in an interview. “This is a great day for public health and for the potential to get us all out of the circumstances we’re now in.”

Between 55% and 65% of the population will need to be vaccinated to break the dynamic of the spread of COVID-19, said Germany’s health minister Jens Spahn, adding that he did not expect a shot to be available before the first quarter of 2021.

The European Union said on Monday it would soon sign a contract for up to 300 million doses of the Pfizer and BioNTech COVID-19 vaccine.

The companies have a $1.95 billion contract with the U.S. government to deliver 100 million vaccine doses beginning this year. They did not receive research funding from the Trump administration’s Operation Warp Speed vaccine program.

The drugmakers have also reached supply agreements with the United Kingdom, Canada and Japan.

Pfizer said the interim analysis, conducted after 94 participants in the trial developed COVID-19, examined how many had received the vaccine versus a placebo.

Pfizer did not break down how many of those who fell ill received the vaccine. Still, over 90% effectiveness implies that no more than 8 of the 94 had been given the vaccine, which was administered in two shots about three weeks apart.

The efficacy rate, which could drop once full results are available, is well above the 50% effectiveness required by the U.S. Food and Drug Administration for a coronavirus vaccine.

Shortly after Pfizer’s announcement, Russia said its Sputnik V vaccine was also more than 90% effective, based on data collated from inoculations of the public. Its preliminary Phase III trial data is due to be published this month.

MORE DATA NEEDED

To confirm the efficacy rate, Pfizer said it would continue its trial until there were 164 COVID-19 cases among volunteers. Bourla told CNBC on Monday that based on rising infection rates, the trial could be completed before the end of November.

Pfizer said its data would be peer reviewed once it has results from the entire trial.

“These are interesting first signals, but again they are only communicated in press releases,” said Marylyn Addo, head of tropical medicine at the University Medical Center Hamburg-Eppendorf in Germany.

Dozens of drugmakers and research groups around the globe have been racing to develop vaccines against COVID-19, which on Sunday exceeded 50 million cases since the new coronavirus first emerged late last year in China.

The Pfizer and BioNTech vaccine uses messenger RNA (mRNA) technology, which relies on synthetic genes that can be generated and manufactured in weeks, and produced at scale more rapidly than conventional vaccines. The technology is designed to trigger an immune response without using pathogens, such as actual virus particles.

The Trump administration has said it will have enough vaccine doses for all of the 330 million U.S. residents who want it by the middle of 2021.

(Reporting by Michael Erman and Julie Steenhuysen; Additional reporting by Michele Gershberg in New York, Ludwig Burger and Patricia Weiss in Frankfurt and Kate Kelland in London; Editing by Bill Berkrot, Caroline Humer, Edwina Gibbs and David Clarke)

U.S. crosses 10 million COVID-19 cases as third wave of infections surges

By Anurag Maan and Shaina Ahluwalia

(Reuters) – The United States became the first nation worldwide since the pandemic began to surpass 10 million coronavirus infections, according to a Reuters tally on Sunday, as the third wave of the COVID-19 virus surges across the nation.

The grim milestone came on the same day as global coronavirus cases exceeded 50 million.

The United states has reported about a million cases in the past 10 days, the highest rate of infections since the nation reported its first novel coronavirus case in Washington state 293 days ago.

The country reported a record 131,420 COVID-19 cases on Saturday and has reported over 100,000 infections five times in the past seven days, according to a Reuters tally.

The U.S. latest reported seven-day average of 105,600 daily cases, ramped up by at least 29%, is more than the combined average for India and France, two of the worst affected countries in Asia and Europe.

More than 237,000 Americans have died of COVID-19 since the illness caused by the coronavirus first emerged in China late last year.

The daily average of reported new deaths in the United States account for one in every 11 deaths reported worldwide each day, according to a Reuters analysis.

The number of reported deaths nationwide climbed by more than 1,000 for a fifth consecutive day on Saturday, a trend last seen in mid-August, according to a Reuters tally.

Health experts say deaths tend to increase four to six weeks after a surge in infections.

U.S. President-elect Joe Biden, who spent much of his election campaign criticizing President Donald Trump’s handling of the pandemic, pledged on Saturday to make tackling the pandemic a top priority.

Biden will announce a 12-member task force on Monday to deal with the pandemic that will be led by former surgeon general Vivek Murthy and former Food and Drug Administration commissioner David Kessler. The coronavirus task force will be charged with developing a blueprint for containing the disease once Biden takes office in January.

The Midwest remains the hardest-hit region based on the most cases per capita with North Dakota, South Dakota, Wisconsin, Iowa and Nebraska the top five worst-affected U.S. states.

Illinois emerged as the new epicenter in the Midwest, with the state reporting over 60,000 COVID-19 infections in the last seven days, the highest in the country, according to Reuters data. The state reported more than 12,454 new cases on Saturday, the highest single-day number so far.

Texas, which accounts for 10% of total U.S. cases, is the hardest-hit state and became the first to surpass a million coronavirus cases in the United States on Saturday.

According to a Reuters analysis, the South region comprises nearly 43% of all the cases in the United States since the pandemic began, with nearly 4.3 million cases in the region alone, followed by the Midwest, West and Northeast.

New York, with over 33,000 fatalities, remains the state with highest number of deaths and accounts for about 14% of total U.S. deaths.

The United States performed about 10.5 million coronavirus tests in the first seven days of November, of which 6.22% came back positive, compared with 6.17% the prior seven-days, according to data from The COVID Tracking Project, a volunteer-run effort to track the outbreak.

(Reporting by Anurag Maan and Shaina Ahluwalia in Bengaluru; Editing by Diane Craft and Michael Perry)