Market to Market - February 21, 2025

Paul Yeager: Coming up on Market to Market -

Containment progress in the fight against bird flu.

Cold snaps and snow storms blanket much of the country. 

Clothing manufacturers who survived when others unraveled.

And commodity market analysis with Dan Hueber, Next.

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[Announcer] “This is the Friday, February 21, 2025 edition of Market to Market - the Weekly Journal of Rural America.”

Hello. I’m Paul Yeager.  

The large sector of the existing home sale market retreated in January. 

Stubborn mortgage rates pressured buyers, as the number of units sold fell 4.9 percent and added a third consecutive month of declines. 

The U.S. Senate worked into the early hours of Friday to approve a $340 billion budget framework. 

If the measure passes both bodies, the series of votes will provide the Trump Administration money for mass deportations and border security.

Other Trump Administration needs have been addressed through staff and program reductions. 

New USDA Secretary Brooke Rollins held a farmer roundtable this week hearing concerns on many issues. 

One of the first items on the docket is addressing the viral disease H5N1 or Highly Pathogenic Avian Influenza.

The practice in the first few years of the fight against HPAI included culling the flocks - often millions of birds - where positive cases were identified. 

A new strategy could focus on medications in the perimeter of infection. 

Peter Tubbs reports on the latest impacts. 

H5N1 continues to spread throughout the nation’s poultry flock, but the pace of spread may be slowing.

Two commercial flocks of poultry were diagnosed with H5N1 avian flu. Both infected flocks were in Ohio and involved 175,000 birds. 

The two confirmed infected sites are a drop from last week’s 16 commercial cases, which forced the destruction of 4.5 million birds.

The Trump Administration announced this week it is planning a new strategy for combating the disease, including enhanced biosecurity measures and limiting the number of birds destroyed on a farm that has a confirmed case of the virus. 

Almost three fourths of the birds culled due to H5N1 since 2022 have been layer hens. Consumer prices for eggs approached an average of $5 dollars this week, and the USDA estimates that prices will rise another 20% percent this year.

The Trump Administration is also scrambling to rehire USDA employees who had been working on the frontlines of the avian flu outbreak who were fired as part of a mass layoff at USDA.  

For Market to Market, I’m Peter Tubbs

Paul Yeager: The U.S. Climate Prediction Center said Thursday the conditions for La Nina remain present and there is a 60 percent chance this lasts through April. 

However, it is a weaker pattern and will stay through the end of May – holding some influence over the remainder of the South American production season. 

The North American weather pattern was pretty simple - cold. 

David Miller reports. 

Cold weather blasted across the entire country plunging much of the Grain Belt into record territory with  many readings well below zero.  Frigid temps broke low records from North Dakota to Louisiana with meteorologists calling these the last truly cold days across the country this winter. 

The harsh conditions descended on the nation’s midsection at the beginning of the week. Schools in seven midwestern states were closed and at least 17 people lost their lives across the eastern part of the country.

Temperatures in Bismarck, North Dakota plunged to a record setting minus 39 degrees. Parts of Oklahoma dealt with freezing rain and snow. Farmers and ranchers were keeping a close eye on their herds to avoid losses from the weather. Wheat rallied on the fears over winterkill. 

More than 10 inches of snow fell on parts of Virginia, knocking out power for several thousand customers. The state police dealt with nearly 500 car accidents. 

Up to eight inches of rain hit Kentucky and Tennessee causing heavy flooding. 

Next week, there is the potential for highs in the 50s which, for some regions, will be a 60 degree temperature shift in just hours.

The snow and rain have reduced the amount of drought across the nation by four points as the winter weather recharges soil moisture. Two years ago, drought levels were also this high.

For Market to Market, I’m David Miller.

Paul Yeager: The industrial revolution took hold in the U.S. in the early 1800’s. 

A century later, offshoring took hold as American manufacturers moved to find lower labor costs and tax breaks at its peak in the 1980s.

This may have improved some bottom lines, but it created a vulnerability exposed in the early months of the Covid outbreak. It became clear there were a large number of items no longer carrying the Made in the USA label.

For those that never left, and others who’ve returned to the U.S., there is some reason for optimism. 

Colleen Bradford Krantz has more in our Cover Story.

In the early days of the nation’s history, most clothing worn by Americans was made at home. Mass manufacturing of clothes didn’t take off until the late 1880s, rapidly growing into a booming industry centered in New York City. Apparel companies soon began to crop up elsewhere, including in distant rural communities with a nearby supply of cotton or with other industries whose workers needed certain types of clothing.

David Antosh, co-owner, Round House - Shawnee, Oklahoma: “We started in 1903. Shawnee, Oklahoma was a big railroad town at the time. It had two different railroads: the Rock Island and the Sante Fe railroads both met here. And the railroad workers needed something to wear and so we got started by producing jeans for the railroad workers to wear.”

In recent decades, however, the once-thriving U.S. clothing industry has undergone a disheartening historic shift. Thirty years ago, there were more than 741,000 production employees below the level of supervisor. That number has since slid over 92 percent. The job count hit a low point during the COVID pandemic, with just 49,100 apparel workers in April of 2020.

David Antosh, co-owner, Round House - Shawnee, Oklahoma: “Apparel manufacturing in the United States has always been important for rural America and it’s something that probably reached its high point in the 1960s and 1970s and since then we’ve really been losing a lot of apparel factories. The majority of them.”

However, there is reason for cautious optimism. Other than that dip during COVID, the industry’s apparel manufacturing employment levels may have begun to level off in recent years, hovering around 65,000. What has been left behind is a kind of camaraderie among those who have survived a period when most clothing manufacturing moved overseas.

David Antosh, co-owner, Round House - Shawnee, Oklahoma: “The industry for American-made products probably is growing more and more amicable. More and more people see it as something that we want everyone to thrive in. So probably in the ‘60s and ‘70s, you had a lot more competition where people were fighting and actually trying to steal sales from other people. But we think it’s great when anybody that makes something in the United States has sales and we want to encourage other people to start a company.”

Today, over 98 percent of the clothing sold in the U.S. retail market is imported, the majority from Asia.

Round House, which has about 30 employees, survived by keeping expenses carefully under control. The company, which David Antosh owns with his father and brother, made it a priority to keep their American-made jeans and overalls affordable. They sell over 100,000 pairs of jeans annually, using 100 percent American-grown cotton. They don’t advertise and the owners can often be found working on the factory floor.

David Antosh, co-owner, Round House - Shawnee, Oklahoma: “We have employees here who have spent their lives working here and know how to make jeans as quickly and efficiently as possible. Because our whole goal is to make affordable American-made jeans. …We try to keep everything here at $59.”

Round House has found consumers are seeking out American-made clothing as it becomes harder to find. Over 90 percent of the company’s international sales are done in Japan, where customers are willing to pay for the heavier denim and the attention to detail. 

Seven hundred miles to the north, Fox River Mills in northern Iowa continues to manufacture its socks and other apparel in the community of Osage, which has a population of about 3,500.

Bobby Warren, CEO, Fox River Mills - Osage, Iowa: “Fox River Mills is the oldest operating sock mill in the United States. So it was founded 120 years ago, along the Fox River in Appleton, Wisconsin. And ended up here in Osage, Iowa, continually operating. Never stopped. It didn't stop for any of the major events that we've seen throughout our history. It continued to knit products. So I'm very proud of that heritage, for sure.”

Warren says their niche market of specialty and high-quality socks - ranging from military to high tech to casual - as well as knitting products for other companies has helped them survive.

Bobby Warren, CEO, Fox River Mills - Osage, Iowa: “With the globalization of trade and trade agreements and the impacts of those through the 80s and 90s, we saw a lot… filter offshore…. And you fast forward to today, I think maybe only 3 percent or somewhere in that range of apparel is manufactured in the United States. So dramatic change, certainly a global economy, certainly a competitive open market, for the most part.”

Fox River relies on the town and surrounding area to keep their 170-person workforce strong as they turn out 5 million pairs of socks annually. In turn, the town counts on those Fox River jobs to help keep the area economically viable.

Bobby Warren, CEO, Fox River Mills - Osage, Iowa: “A lot of apparel manufacturing started in small-town America. You see a lot of that in the southeast: through Alabama, the Carolinas, you see small-town America with manufacturing plans that sustained those communities and sustained those families for many, many years…Some towns still have manufacturing but it’s just a fraction of what it used to be.”

Both Round House and Fox River struggle to find experienced workers in rural areas with smaller populations. However, smaller communities do provide some marketing benefits.

Bobby Warren, CEO, Fox River Mills - Osage, Iowa: “One example would be our ‘knit in Iowa’ is really the moniker that we claim; we’re made in the USA and we’re knit in Iowa and we're very proud of that heritage. And you can create, you know, an identity, which we have over the course of many decades that connects and resonates with many consumers.”

Both companies are hopeful due to the hint of a small resurgence in U.S. apparel manufacturing.

Bobby Warren, CEO, Fox River Mills - Osage, Iowa: “It's not huge but you're seeing a lot of smaller entrepreneurial operations that are coming into, in some cases abandoned locations that still have old equipment, and renovating that equipment and established brands and establishing a brand proposition around specialty.”

And should the U.S. apparel industry continue to grow stronger, Fox River and Round House expect to be right there, pushing the needle, for another hundred years.

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

Announcer: Next, the Market to Market report.

Paul Yeager: Corn and wheat kept big selloffs at bay with some technical and export support. 

For the week… 

The nearby wheat contract lost a penny and the March corn contract fell a nickel. 

Trade talk and a change in palm oil purchases helped the soy complex while rain returned to the forecast in Argentina.  

The March soybean contract gained 4 cents while March meal fell $1.10 per ton.

March cotton contracted $1.25 per hundredweight. 

Over in the dairy parlor, March Class Three milk futures cut 65 cents.

The livestock market was mixed. April cattle declined 30 cents. March feeders added $1.20 and the April lean hog contract shed $4.92. 

In the currency markets, the US dollar index lost 5 ticks. 

April crude oil fell 24 cents per barrel. 

COMEX gold expanded $59.00 per ounce, and the Goldman Sachs Commodity Index added more than 8 points to settle at 571 - 20.

Joining us now is regular market analyst Dan Hueber. 

Welcome.

Dan Hueber: Hi there. How are you?

Paul Yeager: I'm well, I'm well, I'm well. And I was reading some of your commentary this week, and you said if we would have the weekly lower close on the big three, that would open up some things. Two of the three happened. What's that tell you?

Dan Hueber: The stagnation. You know I think we've enjoyed really a very nice rally in these markets for the last seven, eight weeks and really since the middle of December. And it's all things, you know, we we've adjusted for some, adjustments in, lower production numbers of the corn meal, specifically a little bit of kick back into band. And but here again, I mean, that's what the function of the market, we should adjust for those changes within this plan demand picture. And then you need something new to make it go any further. And I think we've probably kind of exhausted that story at this point.

Paul Yeager: Wheat had its own movement. Then corn kind of gave it a boost. Right? But we kind of ran out of, I mean, even with the cold snap. Right? Again, we don't know the damage of the U.S. story. What is the story then in wheat?

Dan Hueber: Well, of course in wheat when it comes to winter kill, nobody really knows until we of course get into the spring and summer months. You know, where you've got kind of a dichotomy going in the wheat right now is when you look domestically, there's certainly nothing bullish. You know, when ending stocks continue to grow, I think we're going to be the highest we've been in probably the last 6 or 6.5 years, somewhere in that neck of the woods. But then if you look over at the global stocks, global stocks continue to contract. So you've got kind of a push and pull situation there. So you know, if other problems do develop with some let's say winter kill in Russia Ukraine maybe even in some of the European nations, you know, then you might be able to build on that story a little bit. But I think at this point in time, until we see something more concrete, it's going to be difficult to extend prices above and beyond where they've been already.

Paul Yeager: If you haven't sold, did you miss your window in this cycle?

Dan Hueber: Well, I think we're still there. I mean, we really have not lost much ground on wheat or corn, either one, particularly if you look at new crop corn. you know, it's really at the highest level that it's even with a little bit of loss today, it's at the highest level. We've been here in months. So no, I think, you know, right now is an opportune time to take advantage of this rally.

Paul Yeager: So in the old crop corn story, then, for what? What is left? We had a March rally. That was interesting, but has since gone away. Do you think the Bulls have left the building?

Dan Hueber: Oh, they haven't left yet. You know, in fact, even on the commitment of traders reports, the managed money is still very heavily long in the corn market. Of course, that isn't necessarily just in the front months. But I think they're starting to make their way towards the exits. Even the spread activity this week was not particularly encouraging. When you have a new crop gaining over the old crop. I mean, that is not necessarily a good sign for continued rally. So. So yeah, they haven't started running in March for the door yet, but it, you know, unless they get something fed pretty rapidly, you know, there's not much not much reason for them to stick around at this point either.

Paul Yeager: You kind of talked about the new crop there just a minute ago, but I want to go back to the new crop corn here. We kind of had a technical target, kind of like an eight month. If you draw the line on the chart. What does that mean?

Dan Hueber: Well, yeah. You know, there's actually a number of targets that were hit here this week. when you look at some of the longer term charts in December, corn than just the December weekly, we made some good Retracements tested some highs of a year ago. So, it, as much as anything, you know, there are areas to watch. There's nothing magic that says we have to stop at those zones. But that said, you know, next week we're going to hear some acreage estimates. I mean, granted, they're going to be statistical estimates that are going to be generated by a computer. But I think for all intents and purposes, where most people feel we're going to see, extra corn acreage out there next year. So unless you can back that up with a weather issue, you know, higher acreage, with ample supply, you know, not a burdensome supply, but an ample supply of corn. Then how do you really justify taking prices higher?

Paul Yeager: Well, the CoBank said this week that, yeah, we're going to have more acres. We're going to have resilient prices. You've got USDA form, not an official report. It's more of a discussion of things. Correct. However, it's kind of a wink and a nod, right, of some things to happen? 

Dan Hueber: To a large extent. If you look over the last several years, it's really been pretty accurate. So I mean, there is a lot of good things can computers can do statistically. And this seems to be one of them. So it, you know, I think the numbers that come out next week probably. You're not they're going to be set in stone by any stretch of the imagination. We've got a lot of weather in front of us, but, you know, they're there. you can almost take them to the bank as well.

Paul Yeager: In the soybean pits, it has been a lot of technical signs because the fundamental news has been hard to come by.

Dan Hueber: Well, positive fundamental news is hard to come by. You know, there's fundamental news out there. Export sales. We did bounce back a little bit here this last week, but sales have really drifted off. We know the South American harvest is going to just continue to pick up pace. They're going to take a larger and larger share of the current business that's happening. Yes. The report that came out last week was that last week or here? You know, as far as the supply demand, it really, you know, you could say it was a little bit positive for the beans that the carryout was not as high as expected, but it's still growing each year. So it's just not as overwhelming as we once thought it was.

Paul Yeager: So walk me through the palm oil, soil, soy meal issues and how that's influencing this complex right now? 

Dan Hueber: Well, you know, and of course, palm oil did have the bright spot this week. And it did give our bean oil just a little bit of a bounce. Really did not do a great job of sustaining it. So I, you know, it's probably more just, you know, something new with a little bit of a flash in the pan. But of course, when it comes to the spreads, I mean, if we have a strong bean oil market, chances are you're going to offset that with some sales and meals or you've got meal really just kind of floating around your contract lows. So, and I think even in the oil market, you mean, like you say, 2 or 3 days ago, it really looked like we could have taken off, and it just kind of fell back into the same zone. So I think it's more of a stagnant market than anything that's really developing for a year. A big push to the upside at this point.

Paul Yeager: Well, what you just said stagnant, which means you print your reigning on my question before we get to it here, Dan in Nebraska wants to know, Dan, what is the outlook for the commodity super cycle for grains?

Dan Hueber: What a great name for me. We don't, I don't think we're when it comes to the major super cycle. And I'm assuming that's kind of what he's referring to. I think we're several years away from that yet, you know, it's years. 

Paul Yeager: Years? What has to change?

Dan Hueber: We're going to have to develop a major change in the entire fundamental picture. You know, right now, everything we have there, we've known for years, we know what the ethanol picture was and that the ethanol truly was the stimulus for the last major super cycle when it came to corn, you know, where's the next one coming from? We know that's a constant in the market here. At this point in time. We may have a little shift a year in, year out as far as how much corn is actually used for ethanol. But as a whole that's factored in there. We're not seeing any major changes in the livestock industry, so it's going to have to be something new. Or, you know, somehow or another, we're going to eliminate a major growing portion of around the world. And right now, I'm not sure where that would be either. You know, it's Argentina has their problems, but they aren't going away by any stretch of the imagination.

Paul Yeager: So I think the corporate term is we're going to put a pin in that, because I have some more follow ups that will get in the Market Plus. I need to move the livestock here as we wind down. Cattle on feed report came out today 102, 101 98. What do those numbers mean?

Dan Hueber: Really exactly what the trade was expecting, you know, and every single category. And plus, you know, you're looking at placements a little bit higher. I didn't really have a good look at the weight breakdown there, but I mean, that would tend to say we're going to have some more beef available for market down the road here. So it's, I think the big question in the livestock market, both cattle and hogs, at this point is can we sustain the demand? And, you know, each of enjoyed some very substantial nice rallies and are showing signs that, you know, we're, we're backing away from, wanting to eat quite as much of this product.

Paul Yeager: The cattle chart that's on now, that is a trend below that 193, off the 208. That was numbers we just haven't seen. Right. Are we going to get close to that number again. Above 200?

Dan Hueber: Above. Well you know not that we I think we'll see a rebound back towards that area to go, but to go back to the 200 level again, I think that might have been we said we set the precedent, we set the new record and we might not see that for sometime, for in the years ahead.

Paul Yeager: And would that be one of those, major fundamental changes would have to happen to change that market?

Dan Hueber: Well, you know, and of course, when it comes, you know, not that we don't use a fair amount of corn when it comes to feedlots and cattle, but I mean that, you know, grow up to picking the numbers back, you know, it's first going to impact primarily within grass. And of course, you'd have to see a lot of cattle come back, that, but, boy, you're talking about years and development to make that happen. So it's,

Paul Yeager: Well that, that market's been a year years long story.

Dan Hueber: Oh, certainly.

Paul Yeager: And the hog market has had its own story where it had enjoyed a run up. And then, is this reality or is this a pullback before we snap higher?

Dan Hueber: I think you've got some concern. You know, I think we're really seeing a breakdown yet necessarily in the exports, although they've been a little bit flaky since the beginning of the year, a little bit soft. but I think, you know, there's concerns about what the economy's going to do or concerns about a number of layoffs that we've, of course, been hearing about here in the last week and that continues to grow. And I think that the concerns on the, in both of these markets is can we continue to sustain the retail side of this at this point, you.

Paul Yeager: Know, yeah, the hog I mean, the hogs have been dealing with, you know, weaker domestic demand. There's been I think some, some longs have liquidated their positions.

Dan Hueber: Certainly, certainly, you know, starting to back away from those markets. So it, and, you know, all markets particularly have had a good year. We had about a 4 or 5 month run here at this point in time. So yes, we're going to stretch it out. We get a little bit too top heavy. We have to come back and kind of wash those markets out and see where we stand. But you know, to come back to the same levels that we just did, you know, we better find some really solid demand to make that happen. And I don't know where that's really going to come from at this time.

Paul Yeager: All right, Dan, good to see you.

Dan Hueber: Likewise. Thank you.

Paul Yeager: Thank you for the time and the insight.

Dan Hueber: My pleasure.

Paul Yeager: Thank you, Dan Huber everyone. We are going to pause this 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 were producing podcasts before it was cool. The Market Analysis and Market Plus come your way each Friday. Then on Tuesday you get our third offering – the MtoM. Subscribe wherever you get your podcasts. 

Next week, a look back at the 90’s and early oughts for this program.

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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