Market to Market (March 15, 2019)

Mar 15, 2019  | 27 min  | Ep4429

Coming up on Market to Market -- A whirlwind of weather hammers the Plains and beyond. The little blue budget books arrive on Capitol Hill with a thud for rural America. A return to the farm comes with a heavy dose of reality. And market analysis with Don Roose, next.

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This is the Friday, March 8 edition of Market to Market, the Weekly Journal of Rural America.

Hello, I’m Delaney Howell.

The March weather lion blew over trucks in Texas, cut-off Midwest interstates and jammed up rivers across 25 states – or as we called it this week ... Wednesday.  

The massive low pressure system hammered Colorado with a springtime storm as interstate travel became nearly impossible from Colorado to South Dakota. I-90 was shuttered for hundreds of miles as crews tried to make progress on clearing the snow.

Just a few miles separated blizzard from heavy rains. Ice chunks jammed rivers as spring melt happened quickly as warm temperatures and heavy rain on still frozen ground served up widespread flooding in several states.

A loud noise came from Capitol Hill this week when the president’s budget landed for lawmakers to dissect.

Government agencies are tasked with finding cuts as they look for ways to make do with less, especially in agriculture.

John Torpy reports.


President Trump’s budgetary wish list met with a tepid response from Congress this week.

The $4.7 trillion dollar proposal looks favorably on military spending and construction of a border wall. But domestic programs like USDA would receive cuts if the administration’s budget were to be adopted.

The suggested cut for the Department of Agriculture is $3.6 billion, or fifteen percent of last year’s allotment. Crop insurance landed squarely in the cross-hairs with a reduction in premiums and a tightening of subsidy programs. Funding for the Supplemental Nutrition Assistance Program is wrapped around strengthened work requirements for able-bodied SNAP recipients.

Two years ago, President Trump said he would like to see $1 trillion earmarked for infrastructure improvements. Since then, the figure has been part of every budget including 2020’s, hovering around $200 billion.

Missing from the line-items is money for Lock & Dam improvements. The American Soybean Association protested the spending inaction, calling it a reversal by President Trump on promised infrastructure investment for inland waterways, which the association sees as vital for shipping.

Democratic lawmakers objected to the President’s plan saying the proposed cuts will only make matters worse for farmers already hurting from the trade dispute with China. Opposition is high enough in both the House and Senate that the budget proposal is not expected to be adopted by Congress.

For Market to Market, John Torpy.

The E-P-A moved forward this week with a formal proposal to sell E-15 year-round.

The combo of increased demand and lower fuel stocks has driven prices higher by a nickel in the last few days to $2.52 per gallon.  

Retail sales rebounded in January after a sluggish December. The Commerce Department pegged the increase at 0.2 percent.

Wholesale prices reversed course after three consecutive months of declines indicating little inflationary pressure in the economy.

New homes sales fell 6.9 percent in January and was likely a reflection of the government shutdown cutting into buying.  ---

One Iowa family got a home that was new to them as they switched residences in 2018. They made the move from concrete streets to dirt roads in an effort to help make a transition with the family farm.

As John Torpy explains in our Cover Story, the hand-off has had challenging moments.  

In the Spring of 2018, Joni Embree-Meinders returned to this place which she called home nearly two decades ago. At the request of her grandfather, John Young, Embree-Meinders brought her family farm back to the Young Farm and got right to work…hitting the ground running...with a big smile on her face.

Joni Embree-Meinders, Young and Son Farms:”My heart is--this is home. And I'm surprised at how, how hard that hit me, right? There are so many things unsettled here. But this is definitely home for my heart.”

In mid-June of 2018, wheat harvest was underway when Joni, Zach, Lucy and Colby moved back to the small central Kansas town of 874. Corn and soybeans followed closely thereafter while the planter patiently waited to put next year's winter wheat crop in the ground.

Young Farms endured its share of dealing with Murphy’s Law as things that could go wrong…did. Mechanical problems plagued the operation during harvest. A long summer drought slowed the growth of their dryland crops. When rain finally arrived, it fell until just days before the start of harvest. The storms delivered all of Burrton’s annual rainfall in just 30 days. Embree-Meinders took all the problems in stride and embraced the steep learning curve.

Joni Embree-Meinders, Young and Son Farms: ”There's so much to learn. I've kind of put myself in his submersion program with everything. I read absolutely everything I possibly can. Everything that Grandpa tells me to look at or the guys that he listens to a read their articles and things like that. I've tried to get--read everything I can get my hands on. Some of it makes sense. Some of it doesn't.  But I figure if I just submerge myself in information at some point, I'll have a conversation with somebody that's going to make it all click. You know?”

Embree-Meinders continues to tap her grandfather’s knowledgebase. She relies on his years of experience to help navigate issues both on and off the farm.

John Young, Young and Son Farms: ” I didn't know we were going to become involved in a trade War, which is making it more difficult. There's going to be problems you know in any business. I don't care what what you're in, what you’re in. You know, a person that is able to meet those challenges, and as she is able to do it and she's interested in it. and that's something it's really hard to find today. But she's doing a great job and and she likes it. You have to like it.”

Joni Embree-Meinders, Young and Sons Farms: ”And I think, whenever you care about something, truly care about it. It makes it very very easy to to learn or submerge yourself in or get involved and things like that. And this is--I've got a lot of personal drive and my "whys" are huge for this operation. And so it makes it makes it fun and easy. I'm interested I want I want to learn more.”

Joni and Zach Meinders drive to move back to the farm was fueled by a longing for their children to have the same chances they had growing up on the farm.

Lucy and Colby have settled into the Burrton Unified School District which has a smaller student body than the one they were used to in Des Moines, Iowa. But what the school in Burrton lacks in population, it makes up for in countless opportunities.

Lucy Embree, Burrton, Kansas: ”I've learned that it's easier to make friends here. If someone comes in everyone's accepted here because I mean it's just such a small school that everyone knows everyone.

Colby Embree, Burrton, Kansas:”I think that when somebody comes then they're like hey! And they just welcome.”

Joan Simoneau, Superintendent, Burrton Unified School District: ”Kids here, first of all are not going to fall through the cracks. We're gonna know all, you know we're going to know all about them very quickly.  And, kids in Burrton, if you're standing upright and can take a good breath, can play basketball, football, volley ball, run cross-country. Be the president of their class, be part of the K club, Shake Hands Association for Youth, and do FCCLA, 4H, you name it./A lot of opportunity for kids here.”

Dwindling populations are a common thread throughout rural America. According to the U.S. Census Bureau, Burrton, Kansas has lost of six percent of its population since 2000, making Joni’s journey back to the family farm a unique move in rural America.

Joni Embree-Meinders, Young Farms: ”You know it's been really it's been nice because I don't get welcome home or welcome to Kansas or anything like that. What I get is..."we are so glad you're here." And I get a lot of--it's far more appreciative then just a welcome back. The fact that we're coming back to continue something that's been set for a long time it is I think appreciated in a community.

For Embree-Meinders, every day is a good one. Despite any hurdles the day may bring, she notes that with every sunset, she has no regrets about her family’s move to rural America.

Joni Embree-Meinders, Young and Sons Farms: ” There's going to be hurdles, there's going to be stumbling blocks, there's going to be people that let you down there's going to be all of that and it's all going to be okay. At the end of the day, when I get ready for bed, I am so content. My heart is so happy here.”

Joni Embree-Meinders: ”I'm closer to my grandpa now than I have been my whole life and he's an amazing man. And I'm really honored to get to learn from him in this setting.”

For Market to Market, I’m John Torpy.

Next, the Market to Market report.

The bears appear to have left the market. The question is for how long. The big three commodities had their best performance in seven weeks as spring weather challenges appeared on the horizon. For the week, May wheat bounced higher by 23 cents while the nearby corn contract gained 9 cents. The saga of U.S. and Chinese trade talks took another turn this week as the president said he’s willing to walk away without a deal. The May soybean contract increased 14 cents. May meal jumped $7.10 per ton. May cotton improved $2.01 per hundredweight. Over in the dairy parlor, April Class III milk futures added 11 cents. The livestock market was mixed. April cattle shed 58 cents. April feeders fell 77 cents. And the April lean hog contract rocketed $8.25, a nearly 14 percent jump. In the currency markets, the U.S. Dollar index stepped-back 69 ticks. April crude oil soared again, this time by $2.35 cents per barrel. COMEX Gold gained $2.20 per ounce. And the Goldman Sachs Commodity Index improved nearly 14 points to finish at 431.70. Joining us now to offer insight on these and other trends is one of our regular market analysts, Don Roose. Don, welcome back.

Roose: Thank you, Delaney. Great to be back.

Howell: Don, we had an exciting week this week and put in a reversal here earlier in the week in the wheat markets. Is the bottom in?

Roose: Well, we think so. We think a lot of these grain markets have scored a bottom and certainly it was a positive week for agriculture and wheat was the number one leader on the grain market. We had basically on the wheat market if you look at it we dropped off the top $5 a bushel a few weeks back. We torpedoed all the way down to $4.27. We ha a double bottom on wheat, which means we scored a technical bottom here short-term and really it was led by the world just finding good support. Russia flour, Russia interior prices moved up and that really gave us support in the market. So the wheat market we think found a short-term bottom.

Howell: Did we see exports improve the situation at all for the wheat market?

Roose: Well, remember not yet, but that's the opportunity down the road. As we look at other countries to see if they're going to have some weather problems as we move forward, that's really probably the thing that we have to look at now. April, June is going to be the key for the wheat direction. But funds are caught, like they are in a lot of these grain markets, they're record short caught in the wheat short and in the regular wheat, soft red wheat also short. So that is the opportunity. It's the wrong time of year to be caught short going into the spring.

Howell: Don, you mentioned weather issues. We're also seeing weather issues in the United States. We had a social media question about that to some extent this week. We've got Bradley in Upland, Nebraska. He said, many acres of winter wheat didn't get planted in the Plains due to abnormally wet weather last fall. How will that affect corn and soybean acres this spring?

Roose: Well, that's a good question. I think when you look at it that is going to be the debate and we're going to start to look at that when we see the March 29th acres and stocks in all positions report not that far away. Remember, we're already at record low 110 year acre lows on wheat so we think that is going to be some shuffling around on wheat. But the acres are pretty low already and that's the one issue.

Howell: Don, you mentioned that wheat was the leader this week. Did we see any reaction in the corn markets specifically from the rumored announcement about China potentially buying U.S. corn? Did that breathe any life into the corn markets?

Roose: Well, I think it really did. I think, remember, the wheat market is the thing that really poured the corn market down to just some, actually we went down to harvest lows on corn and then we found some support. And you could see when the wheat market started to rally the corn market started to rally. So we think that probably the corn market scored some kind of a low, much like the wheat did also. So we think there's some upside potential.

Howell: Net short positions are record levels for the corn market as well for this time of year. What does that mean for the corn market going forward?

Roose: Well, you're exactly right. We had a key reversal on Tuesday on the corn and at that time we were just off the record short position, 238,000 contracts record on the corn short and they got up to about 218,000 so a big short. And I think what it really means, the same thing as the wheat, it's the wrong time of the year for the funds to be caught too short. We need some kind of a catalyst to push to the upside and I think on Friday when we saw the Chinese Parliament vote to protect the foreign IP and IT, I think that really was a green light and it really shot a lot of the commodities up as there's big opportunity in the hopes that we're going to see a lot of agriculture purchases. So we'll see.

Howell: Was that the reason we saw soybeans also have a pretty strong close here on Friday?

Roose: Well, you're right. The soybean market also technically on our systems turned up on Friday. It was wheat first, then it was corn and then the soybeans last. And I think that is part of the reason. When you look at it, the soybean market, a lot of these markets have been caught in a range but particularly the soybean market has been caught in a range. So we went down to the bottom end of the range, now we're trying to move back into the middle of the range, and it's all on how much buying opportunity is ahead and then what is the U.S. weather going to be.

Howell: I want to talk about weather. But first, I have this question for you, Don. When you look at the rumored sales or even some of the sales that have been confirmed by China, especially on U.S. soybeans, it seems like we're not reacting in the soybean markets anymore. How much of a purchase or agreement are we going to have to see to spark some life back into the soybean markets?

Roose: Well, a lot of those purchases have been telegraphed and that's part of the problem, we've had these agreements, and then some of these purchases have been for even next year on soybeans. So they're distributed out. And I think if you look at it from a Chinese standpoint we've already passed our biggest opportunity for exports. And so now we're really, it's South America's time that they're up to bat. So I think that's part of the problem but it doesn't mean that we don't have some spring concerns.

Howell: South America, you opened the gate there on that as well, Brazil is nearing the end of their harvest. Are we seeing them taking up the lion's share of exports to China at this point?

Roose: Yeah, and that's the real problem, our export market is really in the fall and theirs is just really right now. And I think the other thing that has happened is Brazil's crop it was shrinking, shrinking, shrinking, now it has stabilized and, as you know, they're about 65% harvested so they're moving along pretty aggressively along with Argentina. So the soybean situation is behind us from Brazil. And we're really turning from South America to North America on soybeans right now. And then corn will look at Brazil and the U.S. as we hit the spring and summer.

Howell: Well we're hitting the spring now, we finally got some warm weather. We're seeing temperatures rise, but we're seeing so much flooding across the Midwest, the Plains. Don, are we going to see acreage shift here because of delayed planting?

Roose: Well, that's going to be the big debate because it starts with the fact that we didn't get the proper fall tillage work done so it starts there and then I think we're just going to see how the spring goes because it's one of those that you're running into people in the Delta that are actually with the low prices that we have on corn it's wet down there, it's wet in the South, they're actually hoping maybe they could get some prevent plant acres. So there's a lot of strange things. But yeah, we're coming up to an important time period and typically we tried to add risk premium because we don't know what's going to happen in the weather and a lot of these other issues. And I think this last week was a good week for the grain market to the upside.

Howell: It was. We're going to continue discussing the grain markets in Market Plus. But Don, we've got to talk about the meat markets. They have also had some fascinating couple of weeks here. The live cattle market is interesting to me because packers are buying so far out in advance for April and May. Is that normal for this time of year?

Roose: Well, if you look back on the cattle market what we had is just a tough winter, one of the toughest winters we've had for a long time. Our production was supposed to be up one to two percent in the first quarter because of the conditions, the weights down, actually down one percent. But the issue that you have going forward is we're going to have the supplies jump to a 12 year high from the firs to the second quarter. So we've got a lot of supplies coming at us and it's really going to be up to the demand. But also on Friday a lot of optimism that maybe pork buying and also beef buying by China. So it really was all about China and the funds are sitting near record long in the cattle market. We were talking they were record short in the corn market. So there's some fireworks there. But seasonally we usually put a top in right during this timeframe, Delaney, and typically we drop $27 a hundredweight from the winter high to the summer low, that puts you at $102 for a low if we do the average, so you've got to be careful.

Howell: Do you think we're going to follow that normal seasonal pattern?

Roose: I think we'll follow a seasonal pattern. We've got a $13 a hundredweight built in now but I think it's going to be something less than that. You would think more like a $109 low would probably be more realistic just because the hog prices are just on fire.

Howell: Okay, let's talk about hog prices because they had so much excitement this week. Over the last two weeks they have put on $12 in the lean hog markets. Is it all spurred because of Chinese buying?

Roose: It's all about China. And I tell you, the hog market really was the darling of agriculture this last week. And I tell you, when you look at it, it's just a series of events. We had hog prices went way too low just recently because China was liquidating their herd and putting those supplies into the pipeline, then it just did a 180. A week ago pig prices jumped $10, 10% over in China. That really was the start of it. And then we did have on our export sales China bought 50% of our exports and their breeding herd looks like it's down somewhere around 19%, their overall supply is down 16%. So does that equate to big buying in the U.S.? The market voted that it does, but we'll see.

Howell: Don, let's assume China is going to continue buying. How much higher are we going to head here in the lean hog markets?

Roose: Well, and that's it, that is the question because we had the PED virus of 2014 and we shot up into the mid-$130s pretty fast. So do we have that type of market? Usually in markets like this we have July hogs around $89, you usually try to hit these big round numbers, that's $100. We'll see. But it's a market that is very overbought right now and very dependent on what the Chinese do from a buying standpoint because I can tell you, the government put out their outlook, they're looking for, just for example the fourth quarter, 50 to 56, they're looking for supplies to be up 3.5% in the fourth quarter, third quarter up 4%. So there is a big disconnect between what the government is saying and what the market is voting on the Chinese to be.

Howell: Don, your quick thoughts here. Crude oil continues to chug higher. We hit the highest levels since November. Ten second thoughts on are we staying here or going higher?

Roose: Well, I think we're rangebound so I would expect we're going into the season where we usually push up on energies. I imagine we follow a seasonal pattern but I think it's limited to the upside.

Howell: All right, Don, we're going to continue talking about some of these things, feeders, cotton, we didn't get to those, but we're going to hit them in Market Plus. Thank you so much.

Roose: Thank you.

Howell: That wraps up the broadcast portion of Market to Market. But we will keep this conversation going on Market Plus where we'll answer more of your questions. You can find it on our website at A reminder, many PBS stations are in their fundraising mode and this program may be shifted to different time slots. Please show your support by calling the station that carries Market to Market and invest in accurate information and timely market analysis. Join us again next week when we look at the challenges of moving back to the farm as many others have left rural areas. So until then, thanks for watching. I'm Delaney Howell. Have a great week.



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Pioneer Hi-Bred International is a proud sponsor of Market to Market. 

Tomorrow. For over 100 years we have worked to help our customers be ready for tomorrow. Trust in tomorrow. Information is available from a Grinnell Mutual agent today. 


Accu-Steel, offering fabric covered buildings specifically designed for the cattle industry since 2001. The next generation of cattle buildings. Information at 


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