Pearson: Well, a very special edition of Market Plus. Thanks for joining us here on our Market to Market Web site. Walt Hackney and Sue Martin with us tonight and we started with Sue on the show, so Walt, we'll start with you. Let's talk about this livestock business. I look at that Palmer Drought Index and I look through Montana and Nebraska and up through Wyoming and Colorado, western Kansas, Walter, man it's dry up there.
Hackney: It's setting records, they call it the "red area" particularly in the eastern slope is at an all-time record for drought which brings up a dilemma. A year ago as we're getting into spring the western areas didn't have the needed grass to carry the cow/calf herds for the summer and they got busy selling pairs very aggressively. In anticipation of moisture in the fall, available hay in winter, to buy replacement cattle back to replace the cattle they had sold. That hasn't happened, they've used up or are using up a large amount of their winter feed stuff, they can't afford to add any replacement heifers or bred cows to their herds. The point here is we're going to see fewer available calves this fall. Those cattle are going not to be as available even as they were a year ago. Some are grass yearlings, I'd think if you don't, I think if you look at Texas, maybe areas of Oklahoma, maybe parts of the Flint Hills of Kansas you'll find available grass yearlings. Certainly not the Sand Hills, certainly not Colorado/Wyoming and certainly not areas of western South Dakota. So, I would say that the availability of feeder cattle this summer is going to be more limited than we had a year ago.
Pearson:So, you'd step up and buy them now?
Hackney: I think contractors today, if they can do it and get the rancher to go along with them or the grass person that's running these yearlings, I think they'd be ahead contracting yearling cattle now and I think they'd be ahead contracting five and a half, six weight kids for October/November delivery.
Pearson: Okay, all right, put that in your caps and think about it. Walter, thank you. Sue, you said you're an eight-dollar girl. Now, we didn't have much time to pursue this on the show but you're looking for eight-dollar soybeans.
Martin: Well, absolutely Mark. I think that, of course, my time for that to get into that price range is in the month of June but the one thing that I didn't cover on the show that I really want to talk about is that I eluded to all the things that are going on and everybody thinks that we have to have dry weather here to drive soybeans. We have less acres coming for soybeans and besides that we have all these issues going on in South America. The farmer down there is so frustrated because he sold the beans at $25/reals per sack and turned around, they're now at $40/reals per sack and he's paying more for fuel and fertilizer, he's losing money and he doesn't like this. And of course for the first time he sold sixty percent versus thirty or forty percent ahead. So, he's trying to renege, plus they are so known in Brazil and Argentina that if they think there's inflation, they will hang onto soybeans as a hedge against the inflation. And then you mix that along with weather and all the disruption and you've also got a socialistic president in office so he may side with the little guy about the GMO beans or whatever. But what is going on here I think it disruptive to exports, I also believe that there's talk that the exporter out of Argentina did not get rebated back his vat tax and he's frustrated about that and they're talking about a strike here around March 5th. There's even some rumors that Brazil may see the same thing. So, if that occurs, again, that's disruptive to exporting and these vessels are sitting there and they don't sit there cheaply without being filled. So, I think that there's reasons besides just a weather issue, not to mention that with this Asian rust bean found in nearly every soybean growing region and especially the larger ones, I think it has surprised the scientists that hey, you know, this did survive an off-season and they're trying to treat it with five fungicides but I'm hearing that these fungicides are very strong and could be somewhat hazardous. I think there's some issues coming up that will be more than just the fact that maybe they had to have a bad crop to put prices higher here.
Pearson: Okay, so the emphasis for a stronger bean market could come from the fact that we have problems in South America and there does seem to be, I don't want to call it an arrogance, but a feeling that this bean market down there is huge and ...
Martin: Absolutely, even Paraguayan production has been raised as well. So, it will be interesting to see because with everything that is going on I think we're pumping up the thing so high and I think we're going to find that that's not the case.
Pearson: Alright, well Walt and Sue, want to thank both of you very much. Walt Hackney and Sue Martin joining us for Market Plus this week. Thanks for checking in the Market to Market Web site, be sure to tell your friends and join us next time. For all of us here at Market to Market I'm Mark Pearson, have a great week.