Market to Market - March 14, 2025

Paul Yeager: Coming up on Market to Market -

Tariffs continue to dominate the world economic discussion.

Making another attempt at defining waters of the U.S. 

Getting help from a small insect to battle a big problem in corn country.

And commodity market analysis with Don Roose, next. 

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.

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Announcer: “This is the Friday, March 15, 2025 edition of Market to Market - the Weekly Journal of Rural America.”

Hello. I’m Paul Yeager.  

The story of tariffs has replaced inflation as the feature in nearly every newscast of local and national origin. 

The economic snapshots are starting to reflect the threats, actions and consequences of decisions involving taxes on goods coming in and out of America as well as the spending and business operations in this country.  (grx)

This month’s Consumer Price Index revealed inflation pressures eased. The monthly gain was 0.2 percent and the year-over-year slowed to only 2.8 percent. 

The Producer Price Index was flat on the month. The year-over-year number moved to 3.2 percent, down half a percent from January’s reading.

The S and P 500 entered into a correction as it has dropped 10 percent since its February 19 peak. 

The Federal Reserve will look at these data points and other inputs for guidance on their next decision on the key interest rate.

Not lost on anyone is the talk of tariffs which has become a daily occurrence as countries near and far from the U.S. launch higher import duty taxes on each other. But the impact on those who depend on shipping goods out of the country are stuck in the middle.   

Peter Tubbs has more.

Peter Tubbs: The daily tariff gyrations from the Trump Administration are concerning some sectors of the agriculture industry.

New tariffs on steel and aluminum were announced this week, resulting in counter tariffs on American goods shipped to the European Union and Canada. The tariffs are expected to raise costs for many American manufacturers.

Almond growers in California are bracing for price declines as the world reacts to new tariffs. The almond industry saw wholesale prices drop 30% as a result of tariffs during the first Trump Administration.

While domestic almond production has declined since the 2020 crop year, the percentage of the crop that is exported has increased to over 70 percent.

Almond growers are concerned their product will be targeted at a time when production costs have increased.

Colin Carter, agricultural economist, University of California, Davis: "Right now, the producers aren't covering costs. The price will fall even further and you'll see orchards being ripped out, farms being lost. There’d be farms for sale up and down the valley."

The European Union has proposed a 20% tax on American whiskey that will take effect on April 1st. Trump countered with the threat of a 200% tariff on European wine and spirits. 

At Brough Brothers distillery in Kentucky, the tariff situation has put plans to export their whisky to Canada and the EU into uncertain territory.

Victor Yarbrough, CEO, Brough Brothers: “So now the deal is pretty much suspended indefinitely, and now we have what kind of, now we have tariffs today and tomorrow we don't have tariffs. ... it’s really unpredictable…it takes us about 30 days to prep a product to ship to wherever it's going.”

Kentucky produces 95 percent of the world’s bourbon supply, and the hyper-competitive sector relies on exports for continued growth. Retaliatory tariffs can have a chilling effect on the industry.

Tariffs are paid by importers of goods, and the costs are commonly passed onto consumers.

For Market to Market, I’m Peter Tubbs.

Paul Yeager: Last week, the Supreme Court brought to an end another case deciding who was responsible for surface water quality. The high court ruled the Environmental Protection Agency had no authority to impose certain restrictions on water discharge. The decision called into question, again, how the EPA will be able to regulate water pollution under the Clean Water Act.

David Miller reports on the next course of action by the Trump Administration on the subject of water quality. 

David Miller: EPA administrator Lee Zeldin, as part  of making what he called the largest series of deregulatory moves in the history of the United States, opened the door to revising the controversial Waters of the United States rule. 

Administrator Lee Zeldin, EPA: “Our goal is to protect America’s water resources consistent with the law of the land while empowering American farmers, landowners, entrepreneurs, and families to help power the Great American Comeback.” 

EPA officials will start their review by getting input from stakeholders that include many who Zeldin says were sidelined during the Biden administration. Zeldin is directing his team to put a focus on clarity, simplicity and improvements that will stand the test of time. 

The WOTUS rule was finalized in 2015 at the end of the Obama administration. Of the legal attempts to further define the rule, one case, Sacket vs. the EPA,  ended up in front of the Supreme Court. In the 2023 high court ruling, the ability of the EPA to enforce certain parts of the 1972 Clean Water Act was greatly reduced. 

The National Cattlemen’s Beef Association and the American Farm Bureau Federation came out in support of the review and restructuring effort. 

Listening sessions are planned over the next few months.

For Market to Market, I’m David Miller.

Paul Yeager: What started as research in the fields of New York has come to the Corn Belt and helps pull a thorn from the side of growers - root worm.

Keegan Shields’ father made a career in academic research. Following his own military career, Keegan picked up what has now become the family business based right in the middle of corn country. 

The big idea and problem starts with a tiny, natural creature. 

This conversation is part of a recent MtoM podcast and is our Cover Story. 

Keegan Shields, Persistent BioControl: Corn rootworm was the focus of a lot of that research. And in the summer, you go dig corn roots to kind of score, the roots. So you've got to go dig all these things up. His lab also took about half a million soil samples, over the life of the technology. So, helping out with that and then, you know, just trying to divide and conquer with the kids. And, you know, I would go with him during the summertime and drive around wonder for wonderful, New York. Just what a kid wants to do.

[Yeager] Persistent Bio Control is the name of the company, and it's you. You're it. What? Why the name and why do this on your own? Why not go work for somebody that's already kind of in this field, doing what you're doing?

[Shields] Yeah. so persistence. kind of our key innovation is, I guess I'll back up. So we sell, these microscopic worms called nematodes. They live in the soil, and they attack soil insect. And that was the solution for this invasive pest that's only in northern New York it's only in four counties. It's what my father worked on for 30 years. And these nematodes will seek out soil, insect pests, kill them and then reproduce. So it's this really cool, natural, self-replicating system that we've figured out how to harness for farmers. [Yeager] That when you say it's only four counties in New York, I believe last time I let me look at my notes here. Yeah. root worms everywhere. So what's different about, those four counties in New York versus the rest of the area?

[Shields] So, he kind of my father kind of stumbled on to the fact that this works in Rootworm. the original research is for a different insect. but once we figured out said, oh, we could help farmers across the Midwest with root worm problems. now it's I think it's something worth commercializing. So there's a lot of different soil insects that these microscopic worms will, will go after and control. We have a seven year continuous study and root worm basically looking at control through rotation and, and, after going after root worm. So corn's really our first market that we're going into. It's what we're most familiar with. But, it's really just the first market.

[Yeager] Corn in Texas and the way it's grown. And even I shouldn't just say corn, but some crops in some states, there is no rotation. It is the same thing year after year after year. when you mentioned rotation, does it mean something different down there than it does, where you're seeing it's, seated today?

[Shields] yeah, a lot of, a lot of the farmers we work with are corn on corn for going back 20 years. Right. They don't, they don't rotate. And that's really stressed out. we've put a lot of pressure on the rootworm traits that are the current solution. the farmers in New York are mostly dairy farmers. so it's, four year alfalfa, corn rotation. So it's a little easier. But. Yeah, absolutely. I mean, we work with some guy that Nebraska and, northern, southern Minnesota that I think a big corn on corn for like 50 years on irrigation or, you know, rain fed. So and a lot of the guys we work with are, they're corn on corn because they're feeding some type of livestock.

[Yeager] So rootworm traits you mentioned that is sometimes in, in the trade of the seed to, to get rid of the rootworm.

[Shields] Yeah. It's the current solution. the seed companies have figured out how to insert a gene from a bacteria into the corn plant so that the plant produces, bt toxin, which is not is harmful to rootworm. what we're seeing are widespread resistance to these toxins. So we've we've, listeners may be familiar with herbicide tolerant weeds, insecticide tolerant, insects. And now we've got, these trait tolerant rootworm, there's been a big shift over the last five years. Five years ago, we had trouble, getting people to admit there was a problem, but but, you know, people were kind of hush hush about it. but now I think it's got more widespread problems. Worse. so it's really about using every tool in the toolbox, to try and control rootworm. And that's what the nematodes really provide, is they'll come in as an independent, mode of action and, and kill off all those resistance survivors, that would normally make it to adulthood and cause more, rootworm pressure and damage. And it's something that, you only have to apply once.

[Yeager] Once over. How long?

[Shields] so our data goes back 30 years. so, you know, the lawyers won't let me say forever, but, you know, a long time more the more than one year, which, again, that starts to make us sound a little snake oily. Right. but we've got we've got the data, and, I think this year we crossed 100,000 acres, have been treated, with these persistent nematodes, about 65,000, are in New York and the rest across the Midwest. 

The full MtoM is available now. 

Announcer: Next, the Market to Market report.

Paul Yeager: The USDA report left no change in balance sheets and the market returned to tariff and weather watch. 

For the week… 

The nearby wheat contract added 6 cents and the May corn contract fell 11 cents. 

The soy complex is dealing with some pressures from EU tariffs and vegetable oils. 

The May soybean contract lost 9 cents while May meal added $1.50 per ton.

May cotton expanded $1.30 per hundredweight. 

Over in the dairy parlor, April Class Three milk futures added a quarter.

The livestock market was mixed. April cattle put on $2.90. April feeders improved $3.05 and the April lean hog contract cut 72 cents. 

In the currency markets, the US dollar index shed 19 ticks. 

April crude oil found 9 cents per barrel. 

COMEX gold gained $81.70 per ounce, and the Goldman Sachs Commodity Index subtracted more than 3 points to settle at 549 - 75.

Paul Yeager: Joining us now is regular market analyst Don Roose. How are you doing Don.

Don Roose: Doing great. Thanks for having me back Paul.

Paul Yeager: When we started the week. Well, we start any week. It seems to be by the time we get to Friday, the story changes dramatically. Wheat is the one that was probably the most impacted by the USDA report, but that wasn't the biggest impact on the on the commodity. What was the biggest mover for you and wheat this week?

Don Roose: Well, you know, I think number one, I think the wheat market, it's the wrong time of year to be overly bearish when you're starting to worry about the weather, particularly when the funds are, short, a big short in the market and we have some dry weather concerns around. So, you know, the wheat market, I think it just bouncing back, showed his true colors reacting not that negative to, negative report.

Paul Yeager: But it was influenced a little bit by corn this week too, right?

Don Roose: Well, you know, I think some of it goes back to the last spreading going on. The trade has been really heavily long the, corn market, heavily short, the, wheat market. And I think to end the week with the concerns is kind of people scrambling back to home base. And, you know, you can't say enough about with the tariffs going on. Paul, I think you have to kind of think of it and trade it kind of like a mini weather market.

Paul Yeager: Do you trade corn like a mini weather market too?

Don Roose: Yeah. I think, you know, if you look at a weather market, you know, you don't know what the next weather forecast towards the next move is going to be. So you just have to kind of prepare yourself accordingly. You know, technically. And I think that's what's going on. I think that's the way you look at these tariffs. You know, treat it like you're in a weather market and that said we got the weather ahead of us. So no short of volatility ahead as.

Paul Yeager: We record this. We're about to have a little system that could cause some moisture in the plains. Some snow in other places. We're getting to that spring planting season where we're watching. But let's talk specifically about corn. I'm very curious, are we at a point right now where technicals have taken over from fundamentals in determining corn?

Don Roose: Well, I think when you look at the technicals, really give you the price direction where you're really at. It'll add and subtract premium pretty fast. The fundamentals I think we know on the corn market or for the most part kind of positive. And that's why we went up to 5.21 and one half on corn. You know, we just kept marching to the upside. And then we ran into a lot of tariff headaches and we had the liquidation. But no doubt the funds wanted to be long. The positive one on the green, corn and on cattle. So I think that's what you're looking at.

Paul Yeager: We'll talk about the funds because I'm curious about them and soybeans as well. But when it comes to new crop corn, I'm sorry, old crop corn, if you have an empty the bin. Have you missed that opportunity, do you think?

Don Roose: Well, I think when you look at it from a marketing standpoint, you know, opportunities come and go. And, you know, we did have a pretty big run, to the upside. 5.21 and a half. Those are only numbers you could have dreamt up in the fall when we were talking about. So hopefully we get another run. That was, one big one, you know? So you got to take advantage of your opportunities when they're there. Now we're on a big pullback. And, you know, the bottom line is you ran into a tariff problem and pushed us down.

Paul Yeager: Well, let's talk tariffs. If we could Phil in Ontario Canada who we've been watching the discussion a lot with what's going on with Canada and Mexico. He asks on X: Tariffs and talk of tariffs. Plus good South American weather have dimmed what look now to be a good grain marketing opportunity. Do we now rely on traditional seasonality in late spring for the next good marketing opportunity?

Don Roose: Well I always look at marketing is kind of like a card game. You know, you have to, you know, as the cards come out, you'll know what you're going to do. And I would say, on the positive side, you're probably down to some weather skiers that we usually get. We usually add risk premium into the May timeframe.

Don Roose: So, I would anticipate we're going to get, weather, premium added back. It's just a matter from what level. But right now, we right now we have a spike bottom in the July corn at 4.51 and a quarter. So at least you have a tradable bottom. If we can get the right card to come out of the deck and push is to sum up signals.

Paul Yeager: What is the deck telling you about the soybean trade?

Don Roose: Well, the soybean market, you know, is the, the best of the worst. You know, it's holding, $10. it's dialed in a lot of negative news. A big soybean crop in Brazil. fairly big crop in Argentina. But we have the acre battle ahead of us. And I think the March 31st, probably going to show that big down acres on new crop corn, and vice versa on the, on soybeans and corn, big, acres there. 

So I think the soybean market certainly has, a lot of downside potential if the wrong thing happens. you know, could you go at or under nine is very possible with the fundamentals. Remember China is our big buyer, and we're having some, pretty tough, talks with them.

Paul Yeager: So is it still the case that tariffs are influencing the soybean trade? The most of the three commodities we talk about?

Don Roose: All the commodities, I think is corn and soybeans are the most have the most negative influence on. So the wheat market to a lesser degree. So yeah, I think soybeans, you know, when you have the big crop coming out of Brazil, when you have, that's the supply side, the demand side is very shaky in a 380 million carryout is, not really a positive. So. But you can shrink those chemicals pretty fast with weather, Paul.

Paul Yeager: Let's talk about weather in South America then, because in Argentina and Brazil, a couple of different stories about the weather differences there. How's that influencing us here?

Don Roose: Well, I think when you look at Argentina, they basically, I think they have the wet, dry weather behind them. It's improved greatly. The Rosario Exchange took the production down. Probably doesn't go down anymore. Probably goes up from here. So I think when you look at it, remember Argentina sells about exports about 1.4 billion bushels of corn. You know, their harvest is going on right now pretty aggressive. So that's coming at us. Interesting though I think a lot of that corn goes into Brazil, Brazil this week. Drop their import tariff to zero. And so they must want Argentine corn waiting for the second corn crop. So I think it tells us that there's a little bit of world demand in South America.

Paul Yeager: For the cattle market. The dollar helped it early. But what helped it late this week to rally.

Don Roose: Well, you know, quite a surprise. I mean, it looked like we had cattle going to trade. You know, 198. And at the end of the week it was, a ratchet up trading cattle as high as 206 late, you know, big move in the, in the cattle that pushed the futures market up. Still have a key reversal in October. Cattle on back and live cattle and feeder cattle key reversal. So next week is going to be a big jump ball. Does a technical lead us to the downside or can we gather to the upside on the fundamentals?

Paul Yeager: Well, the fundamentals of the feeder market were about tariffs and there was the amount of what we we're not it's going to cost too much to import cattle into this country. Is that going to override what you're talking about.

Don Roose: Well I think this is something I think the bottom line, when you look at all this, you can go back and forth on some of these things, Paul, but you know, the bottom line is, is going to be the demand. We've talked about the supply tight for a long time gets tighter for this reason. But there comes a point at the upside at what what price do does a consumer just, resists the purchasing? And, you know, I think there's a real fear that we could go into a recession.

Paul Yeager: And there's talk, late this week about some of the budget stores that, lower income, I think it's under 40,000 have pulled back their spending. Is that the class? the income that's going to influence maybe some of this livestock market?

Don Roose: I think that's exactly right. I mean, the top tier of people can only eat so much beef, you know, so that is left for the rest of the people. So I think it's, you know, watch it close because there's certainly other proteins that are, cheaper, you know, and, and stuff, well, you know, what goes up does come down eventually. We know that. I mean, look at the price of eggs.

Paul Yeager: All right. Well, exactly. And the we had a sell off in hog market there, recently, but is that a I think I read something about that. Maybe that's a risk off situation there. Is that what's going on with the hogs?

Don Roose: Well, the hog market I think is most influenced by the export. 25% of our pork is exported. So you know, and Mexico is our biggest buyer. So that's the concern. And I think no doubt when we had the big tariff fight March 4th, hogs were pasted down over $4. You know, that's the same day corn put in a spike bottom hogs put it in its spiked bottom. Then things kind of, you know, normalized, if you will call it normalization. So, yeah, the hog market on its own, I think was shaky up over 100, 105. And I don't need any more help on the negative side.

Paul Yeager: All right. Well, I hate to leave it on that, but we have to thank you, Don.

Don Roose: Thank you. Paul.

Paul Yeager: Alright, Don Roose, everyone. And we are going to pause the analysis, continue our discussion about these markets in our Market plus segment, you can find both analysis and plus on our website of markettomarket.org. Finally, a thank you to all who've made pledges of support to this and other public TV stations. We have spent the last few weeks asking for your support and many of you have done that. If you've held out until now, we ask that if you value this program, please call or make contact with your public TV station to offer your support. You are the key in our continued coverage of rural America. Next week, we are taking an experiment in cover crops to the next level. Thank you so much for watching. Have a great week!

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: Family owned and operated for more than 60 years. Sukup Manufacturing is a full service provider of grain handling, storage, and drying equipment, helping farmers feed and feel the world. 

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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