Market to Market - April 11, 2025

Paul Yeager: Coming up on Market to Market -

After battling back and forth, President Trump puts most U.S. tariffs on hold

Southern states wait for flood waters to recede as the drought picture improves

A look at CRP compliance across the U.S.

And commodity market analysis with Chris Robinson. Next.

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Announcer: “This is the Friday, April 11, 2025 edition of Market to Market - the Weekly Journal of Rural America.”

Hello. I’m Paul Yeager.  Two of the major inflation gauges were released this week with a look back at last month’s activities on prices.

The producer price index - which tracks inflation before it reaches consumers - was off 0.4 percent in March, the first drop since October of 2023.

The year-over-year mark rose 2.7 percent, which was also lower than the previous reading.

Consumers were also paying less for goods last month. The CPI fell 0.1 percent in March. 

The annual mark of the Consumer Price Index added 2.4 percent.   

Now to the known and unknown of tariffs and the look ahead. 

The waters are muddy on what to expect on exact repercussions both countries will experience with the raised levies on goods between the U.S. and China.

Peter Tubbs looks at this week in tariff news. 

President Donald Trump: “And today we're standing up for the American worker, and we are finally putting America first."

This week, the Trump Administration placed tariffs on imports from virtually every country on the planet, at rates that are higher than the infamous Smoot-Hawley tariffs of 1930.

Trade analysts estimate that up to 68% of goods imported into the United States fall under the new tariff scheme. Economists estimate the cumulative cost of tariffs could act as a $3,800 dollar annual tax on each U.S. household annually. 

While the additional costs of agricultural inputs for the 2025 crop season driven by the Trump tariffs are still being calculated, exporters of farm commodities are waiting on the reaction of trading partners around the globe. Retaliatory tariffs from export destinations would alter trade volumes in the coming months.

The global reaction to the new tariffs has been cautious as nations discuss their options both internally and with geographic partners. 

China responded with a 34% percent tariff on all American imports, and controls on the exports on rare earth materials.

Exports of bulk grain declined during the first Trump Administration primarily due to a tariff conflict with China. Farmers received over $60 billion in cash payments in 2019 and 2020 to make up for lost sales due to the tariff tiff. Grain exports rebounded during the Biden Administration, with shipments in the last four years each exceeding previous highs.

During a visit to an Iowa ethanol plant on Monday, new Secretary of Agriculture Brooke Rollins assured farmers that an aid plan will be in place if farmers need cash to offset trade disruptions.

Sec. Brooke Rollins, U.S. Department of Agriculture: “But if necessary, we are ensuring that we are set up. We have the infrastructure ready to make whole again what that will look like.”

For Market to Market, I’m Peter Tubbs.

Paul Yeager: Field work resumed this week in cooler conditions, but is expected to pick up intensity as the National Weather Service is predicting relatively dry conditions across the U.S. 

This comes after another volatile week in spring weather. 

David Miller filed this report.

Spring weather hammered portions of the Midwest and South this week as tornadoes and violent storms tore a path almost 800 miles long across the countryside. Homes were flattened and buildings ripped apart from Oklahoma to Texas to Indiana. The system also dropped record-setting rains and created a situation for life-threatening flash floods.

At least seven people were killed in western Tennessee, Missouri and Indiana in the first wave of weather that spawned powerful tornadoes. One of those tornadoes hit Lake City, Arkansas destroying homes and turning over cars. Parts of Michigan, Kentucky and Tennessee experienced localized flooding.

The storms may not be done. Weekend weather predictions include more of the same as daytime heating could combine with an unstable atmosphere and abundant moisture streaming in from the Gulf.

For Market to Market, I’m David Miller.

Paul Yeager: Government programs have long been a target for investigations of fraud, waste and abuse. 

Oversight is a chance to allow sunshine in to see what’s happening and if compliance is occurring. 

CRP is used by some to keep environmentally sensitive ground out of regular crop production. 

But how many acres are enrolled and receiving payments are under the watchful eye of the FSA.

Colleen Bradford Krantz looks at the compliance rate in our Cover Story.

The 1985 Farm Bill, which established the modern version of the Conservation Reserve Program, dictated that no county could have more than 25% of its eligible cropland acres enrolled in the program.  Later, the Wetland Reserve Program came into existence as another voluntary program designed to protect environmentally sensitive areas, and those acres are to be included when calculating the total enrolled.

Prof. Jonathan Coppess, Ag Policy, University of Illinois: “Part of the concern about this program and some of its predecessor programs in the '30s and the ‘50s was if you take too many acres out of production, you’re really going to hurt rural communities…You’re not going to have grain going to the elevator, you’re not gonna have farmers going in and buying supplies and other things that are in town.”

Jennifer Zwagerman, director, Drake University Agricultural Law Center: “It was trying to find a balance of what’s a number that we think still meets those environmental goals and encourages these types of uses and programs, but also isn’t going to receive pushback from local rural urban communities because they’re afraid of what it means for their economic resources within the community.”

Market to Market filed an open records request to obtain county-level data from the federal government in an effort to ascertain how well the U.S. is complying with its rule. Our investigation revealed that, for 2019, the sample year, the nation’s counties generally succeeded at remaining under the 25% maximum. Only about 1% – or 35 counties nationwide - were in violation that year.

Nationwide, that means 244,000 excess acres were enrolled. If that’s multiplied by the $63-per-acre national average payment at the time, the estimated total overpaid would have been about $15 million. But experts say the excess spent would have at least had a positive societal benefit: protecting soil and water.

Jennifer Zwagerman, director, Drake University Agricultural Law Center: “Overall, I don’t know that it’s a  miss because if the goal is preserving land, I mean all of this money is still going to keeping fragile land out of production, protecting it, working toward those issues.”

Jonathan Coppess says it’s important to remember that the conservation programs, managed by USDA’s Farm Service Agency, benefit all Americans indirectly. CRP is a voluntary program where farmers are paid to take land - much of it environmentally sensitive - out of production.

Jonathan Coppess, University of Illinois: “At the end of the day, those $15 million are still putting in conservation practices on the land and doing some good. So I think there’s always an important distinction between some of the payments we do and what we are trying to do with conservation.”

A pattern emerged in a few states where several counties were in violation of the rule: Colorado, Texas, Georgia and Louisiana each had four or more counties that exceeded the 25% limit. Eleven other states had one to four counties in violation. We created an interactive map on our website, MarketToMarket.org, where you can click on each state and see county-level data.

Two examples where counties violated the 25% rule by a long distance were in Camden County, Georgia, where 320% of eligible acres were reported as being enrolled, and Mineral County, Colorado at 142%. This suggests that ground not considered eligible as cropland was enrolled.

A visit to the USDA office that serves Camden County, Georgia provided little information as to how more than three times the eligible acres were enrolled. An official there said he was uncertain as to how it happened.

Bailey County, Texas was reported as having the greatest excess in terms of total acres enrolled beyond the allowed limit. It enrolled 47,393 extra acres, landing at a total of 37%. That means that, if the amount paid to landowners was in the lower payment range of $50 per acre, an excess of $2.3 million was spent in just that county.

According to USDA, Douglas County, Washington had 43,824 additional acres enrolled in an area where CRP per-acre payments were closer to $100. That enrollment of 32% of eligible acres would mean the government spent an excess of about $4.3 million in that county.

Zwagerman says it is worth noting that federal policy does allow counties to be granted exemptions to the 25% rule. Neither officials with the individual counties nor the USDA media team mentioned this being the case for these particular counties. The USDA media team did send an email response saying FSA works to comply with federal policy and uses software to help counties remain in compliance. The results, they say, are even better as of this year.

USDA: “As of March 2025, only two counties slightly exceed the 25% cropland enrollment limitation. FSA is continuing its work to bring counties into compliance…”

It’s unclear whether the same software was in place prior to Market to Market’s request.

Jonathan Coppess, University of Illinois: “I think it’s a fascinating finding and, being kind of a nerd on this stuff, I think it’s great when it’s helping them – it’s a feedback loop into how they are operating the program... It’s running very well to begin with and if they are improving on top of that, I think that’s overall a great example. Particularly at a time when there’s a lot of focus on kind of beating up federal employees and agencies…It’s not like we couldn’t use a little good news here and there.” 

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

Paul Yeager: USDA lowered corn carryout in Thursday’s report while raising that number for wheat. 

For the week… 

The nearby wheat contract added 27 cents and the May corn contract gained 30 cents. 

Soybeans held on despite the back and forth between the U.S. and China. 

The May soybean contract surged higher by 66 cents while May meal improved $16.50 per ton.

May cotton expanded $2.51 per hundredweight. 

Over in the dairy parlor, May Class Three milk futures found 51 cents.

The livestock market was mixed. June cattle decreased $1.40. May feeders put on $3.82 and the June lean hog contract increased $1.78. 

In the currency markets, the US dollar index weakened 271 ticks. 

May crude oil fell 31 cents per barrel. 

COMEX gold strengthened $208.90 per ounce, and the Goldman Sachs Commodity Index subtracted more than 31 points to settle at 518 - 85.

Joining us now is regular market analyst Chris Robinson. 

Welcome.

Chris Robinson: Hey Paul

Paul Yeager: A week ago, if you would have sat there, would your tale be different than it is today? I mean, we were down 40, down 20, down this down that. We're up - everything this week. What changed and why? You're going to say something different now to that question than he would have a week ago.

Chris Robinson: We always know if you're a farmer, a producer, you're always basically a net long speculator. So you're like the person in the back and on the floor. That would, you know, get up in the morning, buy a 20 lot and beans and then go do something and come back at the end of the day. And did he make or lose money? You're always long. So you always have to defend the bottom and risk managers that's, you know, rule number one defend the revenue. So luckily if people had had defensive positions on those worked, meaning that they gained value as the price went down, the key was, was the whipsaw we saw back. You mentioned soybeans, wheat and soybeans is probably the biggest concern because China, big secret, doesn't really take a lot of corn or a lot of wheat from us. It's all beans. They take 25% of our crop.

Paul Yeager: And they weren't going to take many of our beans. They already indicated that was the case. So not a surprise is what you're right.

Chris Robinson: And they were already all done with their old crop sales. And this is usually the time of year they sit on their hands for new crop because everything's coming up from South America anyhow. So the real risk is November ‘25 and, that broke severely at $0.65 lower in three days. But then as soon as the, the first wave of tariff concerns, we came right back up. So that's something we haven't seen in a long, long time. A $1.25 swing like that. And I don't care who you are, if you're out of position or if you're not hedged, it makes it very, very, very difficult. It also made it very, very difficult. We had some hedge options on that. We paid $0.10 that were worth $0.40. And we're like, well, I don't want to sell them, because what if we drop another dollar? So that was a real busy week of managing those positions because those 40 cent puts now today you just mentioned we're up $0.60. Those puts that were worth $0.40 are worthless. So the hedge is there to protect you. And what I always talk about you said, well what I said if I've been here I'm like, don't make an emotional sale. Don't get upset. Don't sell unless you absolutely have to. If you're bankers like, hey, you need cash flow, then you have to sell. But if you can avoid selling for emotional reasons, always do that.

Paul Yeager: But how do you keep your emotion out now, given the rise that it is? Because how many people you call on the phone are going to say, Chris, I'm not selling because I think another $0.40 is coming.

Chris Robinson: Yeah, I hope they're right. Because again, at the end of the day, all producers are net long speculators. We're just coming off of, you know, a really tough, two years really. We went from having super high prices with Covid to a two year downtrend and all these commodities. And, you know, we just had I mean, crude oil today, just for example, is at a four year low. I mean, and we've basically a lot of these commodities came down to four year lows. So it makes it difficult to sit through that. I get it. I think that, you know, the any good marketing program is about defending the bottom, keeping the upside open. This is not the time that you want to be aggressively, you know, selling calls ahead of that of what whatever's going to happen this year. So I'd say, it was a scary couple. Really, really about six weeks really of, hard trade. we're starting to recover. We've had a good recovery for the week. If you look at the sell off that we had in corn, very, very technical stuff, we talked about $0.70 on this week's highs. We we clawed back about 62% of that. That's a big level that gets a lot of people's attention. the I think it's probably smart to keep the upside open because one thing, another, the big speculative funds, they are out of position. They are they were short everything except for corn, cattle and lean hogs. Everything else, they're a bit short. They're massive positions betting that the market's going to go down. Well, the good news is the speculators are all trapped now. And part of the reason we had this big day here Friday was these guys are getting out of that position. So I think if I've talked to the producers like what do I do? I'd say keep your powder dry if you do not want to sell. Right. We just had a 45 cent rally in corn. If you don't want to sell, get yourself a substitute sale, which is what a put is. And now, you know, five, ten, 15 years ago, you have to go out and buy six months worth of protection. It was very, very expensive. You can do weekly calls now. I mean, you can do very short term, protection. So there are alternatives out there and especially and I always tell guys, I'd rather see you buy a put than make a sale because we don't know if this is 2012 and, you know, six weeks from now, we've got a drought and it's game on. You don't want to be oversold.

Paul Yeager: Well, let's take in weather for a minute here. Let's go Trent in Iowa if we could please with a question for you, Chris. Normal market signs don't seem to be following true at all lately. Our weather market swings going to be the only sense of normalcy this marketing year.

Chris Robinson: I love that question. Normal market signs I started, you know, trying to figure those out when I was 22. Here I am. You know, my.

Paul Yeager: If you don't have to say your age is fine, it's okay. No full disclosure.

Chris Robinson: But yeah, there are no markets will reprice based on uncertainty. And that's really what this is all come down to has been normally would we would trade supply and demand. We got through the supply demand. We actually the USDA report was friendly. I mean we had they gave us less corn and to carry out that was another friendly, bit there which also helps prices to rally. So, I think that, you know, there are a lot of weather services out there. Some of them are calling for, you know, a possible this possible that I stay away from that. What I would say is this is keep the keep the upside open. And for goodness sakes, if you do sell into this rally, you owe it to yourself to re-own it. And you don't have to reopen it through December. You can reopen it through, you know, June, July, August, through those tight that time year, which historically, when you go back to are we going to have a potential drought. Those are the months it kicks in. In 2012, we were trending lower all the way till the end of May. I put it in my letter today, and then Mother Nature turned the rain off and we exploded. Soybeans had dropped $2 and they turn around, rallied. So I'd say every year that you're going to be a producer. Keep the upside open. if we do have a drought, you're going to want to be in a situation where you are making the choice to sell, not not feeling that, you know? Oh, boy, if I miss this high, I'm going to be in trouble.

Paul Yeager: Drought is a story for wheat, but so is the dollar. Down 375 points in two weeks. Is that are those the two big factors in wheat right now?

Chris Robinson: Three year lows in the dollar as of this morning. And that's three pricing for a bunch of other reasons don't go too far in the woods. But, you know, statistically that usually helps our exports. People always say lower dollar. It's going to help our exports. But the big you know, the 800 pound gorilla is what's going to happen with, demand based on the tariffs we did have a weather scare the last time I was here. We'd had a big spike in wheat. We did rally dollar because it was winter kill, and that was a gift. I remember at the time I was saying, this is a gift. You know, when you get a dollar dollar. I think it was about a dollar two rally and the wheat has been very, very volatile. We had a dollar rally, then we came all the way back down, you know, six, seven, eight days ago, we were at contract lows again. We've been very, very volatile. So I think that having a lower dollar certainly doesn't hurt us. But I think the big issue is going to be demand. And demand is really wrapped up in how these tariffs are perceived by the market.

Paul Yeager: Cotton has been one of those markets that has been low, low, low for a long time now. A little pop is again a tariff the main story in cotton.

Chris Robinson: Yeah tariff and also China is the biggest and end user. So they use the most and they also produce the most. But they also like our cotton because our cotton's higher quality. So as China goes cotton goes. And that's something to watch right. So that was the concern there. And that's why cotton really got hammered when the first tariff issue came out. Now again, we talked about the managed funds. They've got a record short position. They are, behind the eight ball to put it nicely, and you start to see them having to buy those back so their pain could possibly be, a benefit. I was looking at Dec cotton today. We get about $0.70. $0.71 guys get healthy. But we were just, you know, flirting with $0.65, sub 65. Those are five year lows for cotton. And we were talking about that. Are people even going to bother plant cotton. So a lot of acres were maybe going to go to soybeans. And then we were talking about the acres issue there. So, it's a good problem to have. it's where the, you know, you want the situation. If you need cotton to recover, the stage is set. We just have to see if we can get some more follow through.

Paul Yeager: Are the longs exiting live cattle?

Chris Robinson: Well, they sure did. On the first correction in the stock market, we and we had a kind of a classic 38% pullback. We've been in a tremendous four year rally the last 7 or 8 months. We've rally we've had periodic corrections. but again it's almost when markets get like this. And I mentioned the last time this here that the surrogate for if you can't get enough S&P puts on which are the hedge to the stock market. They will sell cattle. And you saw that this year I think this week a lot of that pressure was the fact that the managed funds were already long. They're massively long cattle. And, also lean hogs. So they were taking profits there. Also pushing down there. And you saw that, kind of an oversize influence. You know, the we've talked a lot about the disconnect between the cash market and the futures market. Watch that feeder cattle index. If you're trading May options, it's right there. It's almost like a, you know, 1 to 1 move. So there's your heads there for feeder cattle. But if you look at big picture, if you go back and look at where we are, we're still relatively good prices. We've had some pressure. the trend remains intact. We'll see if, you know, we can recover next week. We had a pretty good recovery today.

Paul Yeager: Tough to recover in hogs from this week.

Chris Robinson: You know, my friend in Indiana, JD, he told me a long time ago. Hogs, they trade like they ice skate. I mean, really, we went from almost contract highs to eight month lows. And there's a situation where, you know, if you had had a hedge on it was here today, gone tomorrow, the hedges, blew up in value.

Two days later, we rally back sharply. Hogs are one of the most difficult markets to trade. But there I think our market there really lends itself to using options. you know, the herd is not big enough. The demand is very sensitive. What's going on with China? There's a lot of questions about what's going to happen with China with that pork demand. Again, I think that if I'm a hog producer, when I get these rallies and you look at now July hogs, it looks like it might go up to to retest the dollar mark again. So if we get that dollar mark again, take advantage of it.

Paul Yeager: All right. Thanks, Chris. Good to see you.

Chris Robinson: Good to be here.

Paul Yeager: 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.

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Next week, turning waste into an investment in your operation.  

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: 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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