Market to Market - December 6, 2024

Coming up on Market to Market - The tough talk on tariff gets a global reaction.

Keeping tabs on the decision makers and connecting readers. And commodity market analysis with Mark Gold, next.

What's next doesn't happen by chance. It happens when researchers and farmers work together to solve tomorrow's agronomic challenges. We're committed to creating what's next because at Pioneer, our name is our mission.

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For over 45 years, Steiner Tractor Parts has shared your love of antique tractors. New parts for old tractors. Learn more at steinertractor.com or at 877-559-7887.

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Tomorrow. For over 100 years, we have worked to help our customers be ready for tomorrow. Trust in tomorrow. Information is available from a Grinnell Mutual agent today.

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This is the Friday, December 6, 2024 edition of Market to Market, the Weekly Journal of Rural America.

Hello. I’m Paul Yeager.

November’s job market gave Americans something to be thankful for.

The Labor Department said 227,000 new jobs were added last month. This comes after hurricanes and strikes greatly impacted hiring.

The unemployment rate moved higher to 4.2 percent. This was an increase of 0.1 percent.

Those numbers are a look back and now to a look at what’s coming.

International trade attorney Jamieson Greer was tabbed by president-elect Trump to serve as U.S. trade representative. Greer has experience in imposing tariffs on China and worked on the new version of NAFTA, the United States Mexico Canada Agreement.

David Miller has our trade wrap.

In and amongst picking cabinet nominees like Brooke Rollins for Secretary of Agriculture, President-elect Donald Trump continues to pressure major U.S. trading partners with the prospect of tariffs.

Recently, he threatened a 25 percent tariff on Canadian and Mexican imports if officials in those countries didn’t stop the flow of undocumented workers and block the movement of illegal drugs like fentanyl.

That position may have yielded some results.

While Mexican President Claudia Sheinbaum initially rebuffed the threat, there was a raid over the weekend that stopped more than a ton of fentanyl pills from coming into the U.S. - the largest catch of the synthetic opioid in Mexico’s history.

Last week, Canadian Prime Minister Justin Trudeau met with Trump at Mar-a-Lago. Trudeau said he had an “excellent conversation” but it was unclear whether that conversation alleviated the president-elect’s concerns.

Trump has also threatened the nine nation BRICS trading group with 100 percent tariffs on their goods if the nine-nation trading bloc undermines the U.S. dollar. In a Truth Social post, Trump said if they replace what he called the mighty U.S. Dollar they should expect to say goodbye to selling into the wonderful U.S. Economy.

According to the International Monetary Fund, the dollar represents roughly 58 percent of the world’s foreign exchange reserves, and major commodities like oil and soybeans are still primarily bought and sold using U.S. dollars.

Agricultural industry lobbying groups like the National Farmers Union have renewed their call for Trump to be careful in taking what they call drastic trade measures against China. The NFU is concerned that a renewed tariff war could jeopardize the financial health of family farmers who “suffered significant losses” in the last tariff war.

Last month, the National Corn Growers Association and the American Soybean Association warned against reigniting a tariff war with China. The conclusion of a study funded by both groups revealed that exports could be diverted to other nations but there was not enough demand from the rest of the world to offset the major loss of soybean exports to the Middle Kingdom.

The Biden Administration kept many of the tariffs in place that were launched by Trump during his first term.

Late last week, China’s Ministry of Commerce said escalating trade controls on Chinese companies will harm economic relations between China and the United States. This week, Chinese officials banned the export of rare minerals to the U.S. that are used to make weapons and semi conductors in what may be a preview of things to come if Trump puts new tariffs in place.

For Market to Market, I’m David Miller.

Consolidation in media is happening all across the country. Newsrooms are getting smaller, more regionalized or even closing for good.

Fewer mastheads mean fewer watchdogs focusing on local government, schools and communities.

However, the smaller the circulation size, the better the chance the community is willing to support and help keep the information flowing.

A Kansas publishing company is asking rural communities to look inward.

Colleen Bradford Krantz has our Cover Story.

The sun has barely risen when four women begin their work in the back room of the Hillsboro Free Press in Hillsboro, Kansas.

Within an hour, they are joined by middle and high school students who will deliver the papers –

under the watchful eye of school employees – as part of a life skills class.

Paula Jost, paraeducator, Marion County Special Education Cooperative: “We were able to get one of the paper routes so we come and pick up the papers and fold them on Tuesday mornings and then deliver ...one of the paper routes…. It teaches them work ethic and that’s what our classroom is about.”

None of this might have been possible if it weren’t for Joey and Lindsey Young. The couple took over the Hillsboro Free Press, and run two other south central Kansas newspapers during a period when many might have looked at industry trends and fled.

Joey Young, Co-Owner, Kansas Publishing Ventures: “It’s just that I really liked it. And it was youth and ignorance. It was just that abundance of 20-something-year-old attitude that you are indestructible and that older people don’t know what they are doing…And I think there are certain things that we did better. And then there were a lot of things that I needed to be humbled with and that I was, you know, just flat out incorrect about.”

It was 2012 when the Youngs bought their first newspaper, The Clarion, in Andale, Kansas.

Joey Young, Co-Owner, Kansas Publishing Ventures: “Lindsey and I lived like paupers. We saved my copy desk salary for six to eight months, something like that. We sold a car to get enough down payment and enough to put in the bank, which was still not enough, to purchase the paper.”

The Youngs – with their money and time invested in keeping local journalism alive – are part of a shrinking group. According to Northwestern University’s Medill School of Journalism, the United States lost more than one-third of its newspapers over the past 20 years. The nation now has 208 counties without any local news source at all, areas Medill calls “news deserts.”

If given the choice, Joey Young wouldn’t change the path that led him from his job at a daily newspaper to where the couple operates their Kansas Publishing Ventures out of the Harvey County Now newspaper office in Newton. But he would change the conversation about local journalism if he could.

Joey Young, Co-Owner, Kansas Publishing Ventures: “All I hear is…this really depressing statistic that everybody likes to throw out to claim that newspapers are dying. Never is there a follow-up to where like, ‘Hey, that town lost 50 percent of its population over the last 20 years’…If you’re losing Main Street businesses, do I think that there’s a magical answer for sustaining journalism in your community? No, I don’t. You have to figure out how your community is going to survive. If your community is going to survive, a newspaper will survive.”

To make sure community members and business owners keep a bit of their focus on their local newspapers, the Youngs and their employees have done everything from a Halloween-themed toy ghost treasure hunt in downtown businesses, to hosting an annual concert in a local park, to a Friday community happy hour in the Newton newspaper office.

Joey Young, Co-Owner, Kansas Publishing Ventures: “We used to have a Democrat elected to the statehouse, which represented Newton. He came for a Beer Friday. So did the local head of the Republican party. And we were all just hanging out having a beer. And I was like ‘This is great.’ You know? This is America. This is the way things should be …having civil conversation…being a part of the community, which I think is special.”

He knows not everyone is interested in being engaged in their local community but enough still see value in it.

Kelsey Nicklesen, Newton, Kansas: “(A lot of these small towns, you know, the people who live there grew up there and know just about everybody.) When you have a local newspaper, you can connect to those people you’ve known. You can see if someone you know is like the homecoming king or queen, who is in the games as far as sports, what kind of local events are going on like festivals.”

But the financial struggles are real. When paper prices spiked during COVID, the company struggled to break even. Instead of suffering quietly, the Youngs were honest with their readers and put out a survey to see whether they wanted to rely strictly on the digital versions, or pay a little more to continue the printed versions.

Joey Young, Co-Owner, Kansas Publishing Ventures: “Nine out of ten of our readers said they wanted a print paper and that they would pay more.”

Nearly 90 percent of subscribers stuck with them when they went ahead and doubled the subscription fee.

Throughout their dozen years as publishers, the Youngs have struggled with recruiting journalists as some aren’t sure about living in smaller communities. They are not alone with this challenge as other rural news outlets also struggled with new recruits. As a former high school journalism teacher, Lindsey came up with a plan for non-journalists called “Earn Your Press Pass.” The training is now available through press associations in 21 states.

Lindsey Young, Co-Owner, Kansas Publishing Ventures: “This was just a way of saying: here’s someone who has lived in our community for 20 years, they’ve put kids through the school district, they work here, they know everybody. Let’s just teach them how to write and do a good interview and now they can be an asset for the newspaper.”

Lindsey cringes to think of a future where more counties become “news deserts.” She believes that “ghost papers,” where the product is still there but with no local reporters, are not much better.

Lindsey Young, Co-Owner, Kansas Publishing Ventures: “We take a lot of pride in just making sure that local governments are doing the right thing. Just having a person in the back of the room, it’s amazing how much that holds people accountable to make sure they are doing the right thing. So, I feel like we are protecting our taxpayers too.”

Ultimately, it’s also the upholding of the newsroom’s traditional task of being the recorders of the “first rough draft of history” that matters to her.

Lindsey Young, Co-Owner, Kansas Publishing Ventures: “I think for us as community newspapers, we are the only recorders of history. There isn’t anybody else who is writing this stuff down or reporting on if. Being such an intimate part of a community and being a place where people trust you with their stories and with what’s going on, I think that’s such a gift and it’s humbling and it’s really fabulous to be part of. So, I’m absolutely 100 percent am head-over-heels in love with the industry.”

For Market to Market, I’m Colleen Bradford Krantz.

Next, the Market to Market report.

Growing global tensions weren’t enough to push the trade out of neutral. For the week, the nearby wheat contract lost a penny and the March corn contract added 7 cents. The trade keeps walking the support line as big South American crops get bigger and exports of U.S. piles stay in demand. The January soybean contract was up 4 cents while January meal dropped $4.50 per ton. March cotton contracted $1.83 per hundredweight. Over in the dairy parlor, January Class Three milk futures added $1.14. The livestock market was mixed. February cattle fell $2.45. January feeders cut $3.65. And the February lean hog contract gained $1. In the currency markets, the US dollar index went up 35 ticks. January crude oil weakened 83 cents per barrel. COMEX gold gave back $24.20 per ounce. And the Goldman Sachs Commodity Index lost more than 6 points to settle at 531 even.

[Yeager] Joining us now is one of our regular Market Analysts Mark Gold. Hello, sir.

[Gold] How are you? Nice to be back.

[Yeager] Good to see you.

[Gold] Good to see you.

[Yeager] But you wrote this week that it wasn't good in many parts of the world. We have global tensions. We have South Korea, Russia, Ukraine, the United States, France. A lot of those things, the wheat market usually is what benefits or loses because of it. Did that happen this week?

[Gold] We made a new contract low during the day one day, came back and closed higher on the day, so they kind of discounted all of that. The dollar has been the real limiter to the wheat market. We're back to $106. We closed under the support on the dollar yesterday at $105.80, we closed under that. We were 40 ticks lower early this morning. Unemployment came out and then the dollar got strong again. So, we're just in this sell the rallies, buy the break kind of mode. It's the professionals that are selling the rallies. It's the end users that are buying the breaks. And until something really moves this market some news, we're going to stay choppy here for a while.

[Yeager] We'll ask about seasonality and maybe a December bounce early, it doesn't usually impact wheat as much as it does the other two. But with wheat in this country, with weather always kind of a question mark and we already know Russia's crop isn't as big, any hope for U.S. wheat producers?

[Gold] I'm surprised the wheat didn't act better this week. The Russians came out and said that 37% of their wheat crop is either sprouted or is in poor condition. That is the worst it has ever been. You'd think that would rally the wheat market. It didn't. So, we can't really rally on good news, we don't break on bad news really, we just kind of hang in there. But all three corn, wheat and beans, if you look at the charts, they're all trying to make a low and make a bottom in here but we're just hanging above it. So, I think that's telling us they're going to wait and see what the President-elect does, they're going to wait to see what the WASDE report says on Tuesday. Hopefully they're going to cut the carryouts by raising the demand in ethanol and in exports.

[Yeager] Yeah, in corn the ethanol has been strong. Corn has been hanging around and is on the north side of that resistance line. What else is keeping it up there?

[Gold] Well, the exports have been so stellar considering we're waiting for the Brazilian crop to come in, in corn and beans. But in the meantime, corn closed at $4.40 today, it's the first time -- our other close was $4.40 and a quarter about a week and a half ago -- but it looks pretty good here. You've got resistance really every dime in the corn on the way up. But the corn has been the real stalwart among the three commodities. Hopefully that will help the meal, meal made a new contract low today, new contract low close, that doesn't look good on the charts.

[Yeager] I hate to ask this but I have to, do you sell at this point because of the fear that things could go lower because we've been so "strong"?

[Gold] Well, it's hard to say we're strong when we're near our lows out there.

[Yeager] I get that but we know how low things can go.

[Gold] I think the real risk is more likely in the bean market. If we start going tit for tat with China, it's not going to be good. Plus, when you look at what a great partner Mexico has been to the grain markets, you look at the daily or the weekly numbers it's China and Mexico, China and Mexico. And Lord knows if we lose that support the beans could take a pretty good drop here. So, the beans maybe not, the corn I think is going to probably hang in there. But the beans I don't see that. We need something positive in this bean market because we've got this huge Brazilian crop right on our heels.

[Yeager] Given that effect, we have a question I'll ask in Market Plus about the potential for South America, but let's talk about the potential for China. You and I have talked for years, as has everybody who sits there, about we need China back, we don't need China back. Let's just say China's not coming back for the foreseeable future. What do I do if I have grain sitting in a bin or I want to plant some acres next spring with that scenario possibly out there?

[Gold] You plant more corn, you plant more cotton, you do something else because why add to a bad situation? It's going to take a while. And just on normal terms supply and demand will work its way out. But weather is going to be a big part in any growing season. We came close last year to really doing some damage. We got those late rains. That saved the crop. But maybe next year we don't get those rains. You just have to wait and see how these things develop. And right now, the big development is Brazil got the rains, they're going to have a huge crop and that is going to be tough to compete with, plus the real is at lows that we haven’t seen in a while.

[Yeager] Right, and that was part of the story. Should we be paying attention more to what is happening in Brazil than China right now?

[Gold] Well, China hasn't been a great partner in the last year or two. We don't want to lose them. But if we lost them, at this point what are we losing? Certainly, in terms of the bean market. It helps but we've been picking up other business. South Korea, Vietnam, even Egypt is buying some beans, we've seen some other people come into the market, Columbia. So, we're getting by without China, but we don't want to lose them. Gosh, if we could just get some of that back it would be great.

[Yeager] Well, India has become a buyer on some commodities and usually if one goes here there will be a shuffle around the globe that we can hope. All right, of wheat, corn, beans, are you making sales in anything? Or are you riding them all?

[Gold] Well, in the corn market you have to be selling. If you've got old crop in the bin, what are you waiting for? You've got a strong basis in most parts of the country, really good basis, the carry in the market doesn't pay. Sell the corn but Lord knows we're on a cusp of maybe something good happening. You've got to own a call option to keep the upside open. But why are you paying commercial storage? Why are you sticking this corn in the bin when you've got this good basis, you've got $4.40 corn out here? Do something with it. So, I don't want to be hanging around with corn in the bin. On the beans, you've got to be selling it or at least have a put underneath you because there is still a fair amount of risk out there. The wheat market I think is trying to hold its own in here. But if we see the wheat start closing under $4.70, excuse me, $5.70, now you've got a problem. You don't want to see that.

[Yeager] I'm going to ask, Paul has been asking this question for a couple of weeks. We distilled it down to this. Will we have better policy or better prices in the next four years?

[Gold] Well, policy is going to be tough because if the President-elect does what he says he's going to do it's going to be tough on the American farmer and the American farmer during the first term was willing to pay that price because that's their man and that's who they wanted. They've got him again and now they're going to maybe have to pay the piper. I can continue to believe there are better ways to deal with China than just tariffs. And I think the easy thing to do, as I've said before, is send all these Chinese nationals back home that are in our university systems. Why are we teaching them to compete against us? So, you want to hurt them? Send them back to China.

[Yeager] Well, let's pivot a little bit to livestock if we could because that looks like we've sent the highs packing. Do you think in live cattle that is the case?

[Gold] You know, this boxed beef just keeps coming back at you. Today it was up $4, back up to $308 and change. There's good demand for the beef out here. Now, every time we seem to get to the cattle at $190 and the feeders to $260, we seem to have trouble getting over those levels. I'm hopeful that we can come back and stay strong. The cash market doesn't back off. Packers have been having to raise their bids up to $290. The offers are out there at $292 to $294 today. I haven't seen any late trades yet. But they should be higher at maybe $191 and a half, maybe $192. So, you would expect this thing to kind of fall apart out here. But not as long as the demand for beef is good and as long as the economy stays good, I think that stays up here.

[Yeager] In the feeder market that did take a little bit of a tougher first part of the week. But that also looks like it could be trending south. Is the high in there?

[Gold] Maybe. And if it is it's because guys are starting to look at better pasture conditions out there and more cattle, more feeder cattle will be out there. So, maybe that is shifting a little bit here. But I like the cattle market. I just wish you could get over some of these resistance humps and really bust out of this thing.

[Yeager] But we've busted pretty high. This is crazy territory where we've been for months.

[Gold] And, you know, generally you don't have a top that lasts months. You usually make a top come back down. We're sitting here and we're fighting to stay up here. And so, it tells me maybe we haven't seen the highs quite yet.

[Yeager] In hogs, we continue to have good demand for that as well.

[Gold] Yeah, and we're going to see more trade deals. Vietnam, it looks like we've got a deal with Vietnam. They love the pork. The Chinese love the pork. Exports have been good in the pork. So, we're at pretty good prices up here. The hogs are $100 plus. Can they go higher? Sure, why not? But when you're at $100 hogs do you want to have a $90 put to protect the downside just in case six months out? Yeah, why not? But I think we could see some higher prices out here.

[Yeager] Let's spend the final few seconds on the dollar. You kind of mentioned it a little bit, our competition with the real, the global news about it. What is the future of this dollar? Are we headed higher or lower in the next we'll just say six months? I'm going to give you a little time.

[Gold] You know, again, it's one of these commodities every time it looks like it's going to do something to break it comes right back. It did it again today. I think as long as the President-elect continues on his economic policies it's a strong dollar policy. And what he's doing with the Chinese telling them, listen, if you want to mess with the dollar, we're going to mess with you in a big way, adds that strength to the dollar. So, I see the support around $103, I see the resistance around $107, $108 and I think we'll stay in that bend for the next six months.

[Yeager] And we're going to stay here together and do Market Plus in a little bit. Thanks, Mark, good to see you.

[Gold] Good to see you. Happy Holidays to all of our listeners out there. Merry Christmas.

[Yeager] All right, appreciate it. Mark Gold everyone.

[Gold] We're going to pause our Analysis and continue our discussion about these markets in our Market Plus segment. You can find both Analysis and Plus on our website of markettomarket.org. We have a perfect holiday gift for yourself, an email from Market to Market. Each Monday, the Market Insider newsletter is sent out with behind-the-scenes information on this program, how we put stories together and exclusive details about our 50th season celebrations. Sign up now at markettomarket.org. Next week, we go back in time to explore the early days of this program. Thank you so much for watching. Have a great week.

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Market to Market is a production of Iowa PBS which is solely responsible for its content.

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What's next doesn't happen by chance. It happens when researchers and farmers work together to solve tomorrow's agronomic challenges. We're committed to creating what's next because at Pioneer, our name is our mission.

(music)

For over 45 years, Steiner Tractor Parts has shared your love of antique tractors. New parts for old tractors. Learn more at steinertractor.com or at 877-559-7887.

(music)

Tomorrow. For over 100 years, we have worked to help our customers be ready for tomorrow. Trust in tomorrow. Information is available from a Grinnell Mutual agent today.

(music)

Trading in futures and options involves substantial risk. No warranty is given or implied by Iowa PBS or the analysts who appear on Market to Market. Past performance is not necessarily indicative of future results.