Market to Market - February 14, 2025

Paul Yeager: Coming up on Market to Market -

Bird flu outbreaks keep officials working overtime on containment and a cure.

New farmers get some insight on navigating the business of producing food.

And commodity market analysis with Chris Robinson, Next.

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[Announcer] “This is the Friday, February 14, 2025 edition of Market to Market - the Weekly Journal of Rural America.”

Hello. I’m Paul Yeager.  

The snow and cold of winter kept Americans at home and did little to slow inflation. 

Retail sales fell 0.9 percent as the coldest January since 1988 kept consumers away from stores and auto dealerships but sales did improve at general merchandise outlets.  

The new year often means new pricing structures for businesses and that was reflected in the Consumer Price Index released this week.

The CPI grew at the fastest pace in a year and a half with a 0.5 percent gain in January. The hotter-than-expected increase was spurred by higher costs for prescription medication and motor vehicle insurance. 

 The producer side of inflation also recorded a solid expansion of 0.4 percent. The Labor Department reported the rise in goods and services. 

Then there’s the grocery store aisle price hikes. The price check in the egg cooler has garnered headlines.

Leaders in states where bird flu has forced the culling of millions of egg layers, the rebuild is slow just like the reduction of outbreaks.

David Miller reports. 

The ripple effect from the ongoing outbreak of Highly Pathogenic Avian Influenza continues to put pressure on poultry and dairy producers. 

Ohio has been suffering the most in recent months as nearly 25% of its poultry population has been lost to HPAI. In Iowa, the nation’s number one egg producing state, farmers have been working hard to control the spread of the virus. 

Sec. Mike Naig, Iowa Department of Agriculture: “Just the experience over the last couple of years has shown us that this is a threat nearly year round, and that's where producers are having to think about biosecurity strategies around that, that, accommodate for that. And we, from a response standpoint, are having to accept the fact that we're essentially in a response mode almost an entire year.”

The price of eggs has been the most noticeable impact to consumers as the higher percentage of bird deaths has been among laying hens. Broilers, raised for meat, have experienced less impact to date.

USDA data shows the average wholesale price for eggs went up to $7.34 per dozen last month.  While some places have seen retail prices reach $10 per dozen in recent days, the Bureau of Labor Statistics put the nationwide average at $4.95 per dozen. Last year at this time, the average retail price was $2.99 per dozen. 

According to the Centers for Disease Control, proper preparation of eggs and other poultry products makes them safe to eat. 

Bird flu has been detected in poultry, dairy cattle and wild birds in all 50 states. So far, 38 million laying hens and pullets have been euthanized to control the spread of the disease. Since 2022, 30.1 million birds in Iowa have been affected.

Wild birds are considered to be the main source for spreading the disease. In Iowa, like the 15 other states where HPAI has been detected in dairy cattle, strict biosecurity protocols are in place.

Sec. Mike Naig, Iowa Department of Agriculture: “Is it now the time to ask the questions that maybe we didn't have to ask before? Vaccine being one of those next level biosecurity investment and research.

You know, those are the types of things that I'm anxious to hear from USDA. And, I think Secretary Rollins, arriving at USDA now officially, really is a good thing when it comes to that.”

Since December of 2024, there has been an order to test all milk for avian influenza at dairy processing facilities nationwide. In March of last year, USDA began providing funds to dairy producers to create biosecurity plans. 

Officials with the CDC also say the number of cases where the disease has passed to humans is now at 68 with 1 death. The federal government has spent more than $1.4 billion fighting the current outbreak, which includes $1.25 billion in indemnity and compensation payments.

Sec. Mike Naig, Iowa Department of Agriculture: “You’re not going to be made whole. But it is something that allows a, a farm to get back into production and hopefully weather the storm that they're going through.” 

An experimental vaccine designed to fight H5N1 circulating in U.S. cattle was successful in protecting mice according to a new study published in Nature Communications.

Sec. Mike Naig, Iowa Department of Agriculture: “It's not, it's not a silver bullet. And, there are trade implications that we have to think about for us, where we've got such a strong egg laying industry vaccine really has to be, I think, part of the equation.”

For Market to Market, I’m David Miller.

Brooke Rollins was confirmed Thursday as secretary of agriculture.

The Texas born lawyer moves into USDA at a time when there’s more than three million producers working to feed and fuel the world. 

Some are looking to retire while others are eyeing agriculture as a career - facing the usual hurdles of land availability, access to equipment and the capital-instense nature of the industry.  

Peter Tubbs looks at an academy aimed at easing that transition. 

His report is our Cover Story. 

One-hundred Red Star and ISA Brown layer hens search for food in the grass on the Kyle Rustic Farm in Roane County, Tennessee. The former tobacco and hay farm has been branching into new lines of business after classwork at the New Farmer Academy, a resource provided by Tennessee State Extension.

Susie Kyle, Kyle Rustic Farm:

“Wow. I dabbled in farming. I dabbled in agriculture. And when we set out to do this more on a full time basis, it's like we're going to do it. We're going to do it right. So I found this great program called The Beginning Farmer Academy. And I joined up and my eyes were opened big after that.”

The first major hurdle for many beginning farmers is determining if their farm plan can be profitable. The New Farmer Academy, created and operated by Tennessee State University, helps budding farmers understand the ins and outs of a business plan by estimating input costs and potential revenues.

Jenni Goodrich, Tennessee State University Extension:

“So it's an eight month series. It goes March through October. and it's a really neat program because it's kind of like AG 101 for grown ups with lots of great field trips. We, we start every series off with farm planning and goal setting. So that we can kind of get a feel not only for the clients that are coming in and what their goals are for the class, but also to kind of help them get rooted in what they want to do long term so that they can kind of decide what they want to be learning from the program.”

Many of the students enrolled in the New Farmer Academy are looking to farm from 5 to 50 acres of land. The Academy has found producing non-commodity crops and animals can be a viable way to get started.

Susie Kyle, Kyle Rustic Farm: “Traditional farming is plow, till, plow, till, mono crop. So we we don't do that. We do regenerative agriculture. We do minimal soil disturbance. Our soil disturbances are chickens and our pigs. Pigs plow chickens till that's their job. We grow multi species. We want as many grasses, as many legumes, as many brassicas. We want as many plants as possible.” 

The Kyles move their chicken coop every few days as grazing conditions allow. The grasses on their pastures are not managed but are the plants that have emerged from the soil as the poultry scratched the ground. Each growing season reveals an increase in the variety of plants in the pasture.

A large part of the coursework at the Academy is discovering ways for new farmers to capitalize on productive niche markets. 

Jenni Goodrich, Tennessee State University Extension:

“Hopefully by the time they come out at the end, they've maybe put a few new things on their list and taken a few things off their list and, and had a better idea of economically what it's going to cost to get started and what they can expect long term.

The New Farmer Academy enrolled its first class in 2014, and a USDA grant helped to expand the Academy to three other parts of the state.

Finis Stribling III, Director of Small Farm Programs, TSU: “Our inaugural class, we had nine participants. And from there it's taken off every year. This year we're going to graduate 122 new beginning farmers across the state of Tennessee.” 

Another building block for beginning farmers is simply learning the services that are available.

Finis Stribling, Director of Small Farm Programs, TSU:

“Just knowing about the resources. If if you're for myself, I'm a third generation farmer. Well, I know about county extension. I know about the USDA agencies and things of that nature. When when you come into farming for the first time, you have no clue who they are, where they are.” 

Students spend half of their course time on field trips to working farms in their region of Tennessee. 

Finis Stribling III, Director of Small Farm Programs, TSU:  “Well, they get an opportunity to go talk to a farmer first hand, first and foremost, they go out on the farm. They actually see a working farm because here again they're new to it. And then you get the hands on because here's the beauty about New Farm Academy. You have that classroom instruction. A lot of times it's morning time depend on the time of the year. And then afternoon you go on field trips. Like say for example, we were talking about soil testing. We come in and do a program on soil test and then we go out into the field and actually take soil samples and show a lot of the participants how to actually take a soil sample. If we're talking about drip irrigation, we classroom instruction, we go out and actually hook up an irrigation system. So you get an opportunity to touch it, feel it, and you can see how they work together.”

Tennessee agriculture is varied. While the west end of the state can support row crop farming, the Central and Eastern sections are better for grazing and specialty crops. Eighty percent of working farms in Tennessee are less than 180 acres. 

Along with eggs, the Kyles raise Thanksgiving turkeys, heritage beans, honey, and elderberries. Early sales began at farmer’s markets, but growth required the building of an on-farm store, which now sells products from the Kyle farm as well as neighboring operations in the valley.

While the Kyles had access to land, that isn’t the case for many students at the Beginning Farmer Academy. The economics of renting or purchasing land make commodity farming difficult for the beginner. Having a profitable business plan from the beginning can make the difference.

Finis Stribling III, Director of Small Farm Programs, TSU: “So with that, we come up with this managed extension professionals to help them work through the feasibility and the numbers of whether or not this is feasible or not. And a lot of times we realize that, you know what? Maybe I need to look at some other aspects of agriculture and help them figure out, you know, the pros and of cons prior to really getting involved in whether or not even even profitable to get into. So a lot of time, that's the beauty about going through the class. So we link them up with those resources to help them with those pitfalls early on.”

Despite the challenges of entering farming, the annual waiting list for slots in the Academy’s classes are a sign that interest in starting a farm remains high.

For Market to Market, I’m Peter Tubbs

Next, the Market to Market Report. 

Improving weather in South America pressured most prices but not before a cold snap settled into the Wheat Belt. 

For the week… The nearby wheat contract added 17 cents and the March corn contract put on 9 cents. Farmers in Brazil have entered the home stretch of their harvest.  The March soybean contract weakened 14 cents while March meal fell $5.50 per ton. March cotton expanded $1.55 per hundredweight. Over in the dairy parlor, March Class Three milk futures increased 33 cents. The livestock market was mixed. April cattle declined $2.53. March feeders added $1.45 and the April lean hog contract put on 45 cents. In the currency markets, the US dollar index lost 134 ticks.  March crude oil fell 35 cents per barrel. COMEX gold expanded $12.90 per ounce, and the Goldman Sachs Commodity Index added more than 6 points to settle at 570 - 40. Joining us now is regular market analyst Chris Robinson.  Welcome.

Chris Robinson: Hi, sir. How are you doing?

Paul Yeager: I'm better than it is in Wheat Country right now here, it's snowing, it's cold. There's no snow. That's really enough to move the market, just cold.

Chris Robinson: You know, it happens every year. But that's the risk is that there isn't enough snow cover. Is there going to be winter kill And and I guess, you know, beggars can't be choosy. It's a good thing we had a nice recovery rally. You know, we were basically dancing at these four year lows. And wheat. Wheat has been the laggard. You know, we had a nice rally in spot corn, close to a dollar over a dollar 20 or so in spot beans. And the we just couldn't get any traction. Every time we rallied 30 or $0.40, it would break. So we had a good recovery was a good way to end the week. It's the middle of the month. We'll see. The other thing we bulls have going for him is the managed funds. They're short selling. They're really short. And, you know, if they have to buy that back, they're there. Covering those losses will help. Hopefully, it gives producers an opportunity to catch up on sales or $0.60 off a low. You know, we need another dollar.

Paul Yeager: That would be your advice if I'm still sitting with some. Wait, hold for a little bit of.

Chris Robinson: Holy cow or. Yeah, if you don't want to sell it if you need cash flow. I mean I'm always say I like selling into 60 cent rallies, not 60 cent breaks. And if you don't want to if you don't want to make the sale, you know that's this is when you use a poor option because it's like you're climbing up the mountain. You know, you put your crampons on the wall so you hold it. So if it falls, you can say, you know, we rallied $0.60, try and protect 40 of that 60 in corn.

Paul Yeager: This is the market that continues to defy a lot of things. It proved it again this week. Why?

Chris Robinson: Well, I mean, I think that the one thing we've seen, we haven't had a long time. We're starting to see some export things. Actually, the exports for corn have been really very healthy. And then there are, people hadn't expected that. So that's been a great support to the market. You also had for the past six months have people always said they don't like the benefits funds, but they're part of the reason we have this rally. They started buying it quite a while ago. They've worked up to a, you know, over 3,000 contracts. They are supporting the market and they're continuing to defend that position. Now, the only thing I don't like is what we haven't been able to do. For some reason, they will not give us a $5 print on March corn 499 and 3/4s. Same thing with DEC corn. DEC corn couldn't get the $4.75. But if you look at where we were 424, eight 4.99, that is a gift. It's been the one thing I think, and a lot of farmers out there that are watching. You've got corn in the bin. You know, you do the math. I think a dollar rally is worth defending or rewarding. I'm not saying it can't go higher. I hope it does. But we've had a lot of volatility, too.

Paul Yeager: Yeah, I think since January ten, since that USDA report, $0.96 off the August low coming into today. So technically speaking, can we print that five come Tuesday?

Chris Robinson: I've been surprised that we haven't because generally these computers will try and go run stops. What does that mean? Well, anybody that's short because about $5, they'll have a buy stop. So hopefully we'll get pushed up the next level. A lot of people are looking at is 508. That's the old high from last June. So we saw this on the way down with wheat. Wheat's old low was going to stop the slide. Now it's going to be which old high is going to, you know, be a good target. I will say this. You know, when we had the tariff announcement, we opened up, you know, last Sunday night, everything gapped open, lower that to come back as well. That's really impressive. Of course, with the headlines that we have. You go to bed one night, somebody says, well, something else, it changes. Sometimes it's good, sometimes it's bad. That's the unknown. But again, big picture, a 30,000 foot view, $0.96 off the bottom. That's real money. And producers need to either, you know, figure out some ways to reward it. You have to reward it. And if you can't reward it, defend it.

Paul Yeager: Okay. How far into that rewarding an old crop am I? Should I be emptied and sold of 24?

Chris Robinson: Yeah. And if you're if you're worried that it's going to go higher, I mean, if you if you've written this all the way up for a dollar, make the good cash, sell, pull back ten, 12, $0.15, whatever you want. You can rely on it for the what if what if we have in the 88 drop. What if this what if what if what if the tariffs turn out to be good and the sudden you know, they cut a deal. So I think that that also caught a lot of people flat footed. They automatically assume that it was going to be a disastrous and it is kind of like they put their hand on the hot stove and pulled it away, which is good.

Paul Yeager: Let's go to where it's a little warmer in South America. And we're going to open up with a question from Phil in Ontario to start our soybean discussion. He wants to know, have Argentina crops been damaged significantly or is it all priced neutral at the moment? And Argentina specifically first and we'll talk.

Chris Robinson: About Argentina specifically. Well, it's interesting. They did lower the the kind of numbers came out where they lowered the corn more so than the soybeans. It doesn't look like the soybeans have been hurt as much as corn was. And also, we've gotten some good rains in the last eight days. Now we have the next week. Next week, they're going to it's going to be drying out. And, you know, there should be some harvest pressure there. So we're into the time of the year where you've seen it, where a lot of our exports historically, this time of the year, they kind of dry up because China's realizing that and to feed for more weeks, all those beans are going to come on. So I think the proof is in the pudding. We've had a good rally in March, soybeans, spot beans, but again, very technical. We have not been able to get above the tune of the moving average if we ever got above the trade moving average, I think you'd see more money coming in from the speculators. That's a big thing that they follow going back for 20, 30 years, which Dennis that's how he made all his money. Just all we did was trade the two or three day moving average. And so it's a long term big level, but I don't think that there's been enough damage and Argentina beans to really be a story.

Paul Yeager: How about Brazil? What's the story there?

Chris Robinson: Apparently there's a big crop coming. I mean, people found that out, you know, even after the last report. I mean, it is the USDA didn't change any numbers, but not drastically. There was really nothing drastic on that report. Thankfully. But yeah, we're going to get a record crop in Brazil. Everybody's known it now for a while. We never really got stress on the crop down there. We did have some drought scares earlier, but it's a big crop coming. China knows that we know it. And now we're have to sit back and see, you know, what happens. And if we can get some of that export business back.

Paul Yeager: If I have quickly acres up for debate between corn beans, Cotton, and am I soybeans winning in that discussion?

Chris Robinson: I don't think so. I think, you know, some of the numbers that we've seen lately, the break even for new crop beans is 1040. We're right there at the break even for corn is around 430. These are rough numbers. So I know everybody is different, but we're 30 in a world where we're at 470 with new crop. So it's just a math problem. And the question is, is how many acres of corn are we going to plant? We get over 95 million acres and you discuss cotton. Cotton is, you know, just getting completely beaten up at four year lows in danger spot cotton was look like it might go below 63 go back to 60 and even new crop has been in a big downtrend really for the past year. It's fighting it out here trying to hold on to 6570 area. I think if you saw new crop cotton drop lower, why would somebody plant cotton? They're going to plant beans, but I think before they plant cotton. So that's going to be something to watch.

Paul Yeager: Let's go to happier times in the live cattle market. We've lost 9% since the top of that one more percent. We've got ourselves a correction. Is that what's happening?

Chris Robinson: Yeah. I mean, it's like for a while I was like, Hey, Chris, how high can we go? Right? If you look at feeder cattle, I think if my memory serves me correctly, you know, if you take the September low to the high was 53 bucks. I mean, you know, and a lot of people this has been the market that puts work best in because if you were short futures, wherever you were short from, you left all that dough on the table. f you had to put on, yeah, you're put lost value. But if you had $0.03 in put and the market rallied and we've seen this, we've gone up $0.10 a week means some really impressive moves and nothing lasts forever. We have, we did have that kind of a 25% correction area, which we sat out for four or five days. We'll see if it can, you know, catch a bid next week. But there are some nervous people out there, especially if you're buying cows for next year. You have to go out and buy cows When they're this expensive, you better make sure you know where your defense is because like everything else, when it corrects, it usually corrects very sharply. The same old story, right? It takes we go up the escalator when be correct, we go down the elevator shaft so we know what's coming. But that's what puts a before.

Paul Yeager: You mentioned the hanging at four day levels. Feeders have hung at the same levels for about seven days, almost twice the length. Is that party over?

Chris Robinson: Well, we'll see you next week. It's fundamentally nothing's changed. The stock market continues to hang in there. We haven't had a real hiccup more than five or $0.06. Why does that matter? Historically, if the stock market has a big move lower, usually they'll sell live cattle and feeder cattle. It's just a kind of a knee jerk reaction. Live cattle have had a bigger correction. And I think that, you know, you can talk all you want about box beef and the cut out and the cash market and the Packers. But I think everybody is you know, this market looks like it's a little bit overdone. We've had a healthy correction. What's healthy? We've lost 38% of the rally. We'll see if we can, you know, catch it again. But I think anybody out there, even if you've done nothing, these are such good prices that if you if you make your first highs next week, you're still on you're a lot better shape than you were back in September.

Paul Yeager: Hog markets also a little bit on a run, maybe a little bit of a bull run. That's trending higher, though.

Chris Robinson: Yeah, Well, I think a lot of people I mentioned in my letter about the beginning of the month, historically, the spread between the price of cattle and the price of hogs have gotten ridiculously wide. And since now this has come a snap back. I would say this if I'm a hog producer and I look out of those deferred months, we've gone vertical. We've gone up 20 bucks in the past three or four months were contract highs. The market's telling you it wants to go higher. That's and then those deferred months. It's really something to watch. But if I'm a producer and I'm looking out there, you've got that's a gift. And again, it's always nice when prices go up. If you're a producer, you're always long. What you want to do is play good defense. So take advantage of that, start looking at doing some hedges and you never know where one headline away from, you know, a correction.

Paul Yeager: The sport has to say defense wins championship, Defense wins champion. All right. Chris Robinson, thank you. Thanks. I appreciate it. We're going to pause this analysis, continue our discussion about these markets in our Market Plus segment. You can find both analysis and Plus on our website of Market to Market dot org. We like to keep our inbox open and reliable for you on a cold winter's morning, noon and night. Send us a note any time by emailing us Market to Market at IowaPBS.org. Next week, clothing manufacturers who survived when others unraveled. Thank you so much for watching. Have a great week.

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

Announcer: 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.

Announcer: 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.

Announcer: Tomorrow. For over 100 years. We've 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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