Market to Market (September 13, 2019)

Sep 13, 2019  | 27 min  | Ep4504

Coming up on Market to Market -- No truce in the trade war. But producers hope for more fact than rumors to change the story. Finding the right ingredient for a family business. And market analysis with Ted Seifried, next.


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This is the Friday, September 13 edition of Market to Market, the Weekly Journal of Rural America.


Hello, I’m Delaney Howell.

Predicting the winner of a football game between rivals is almost as easy as guessing what the Federal Reserve will do with its key interest rates when they huddle next month. --

The data point of producer prices unexpectedly rose in August 0.1 percent - mostly on the plunge in energy prices – a signal inflation is remaining tame.

Lower gasoline prices factored into consumer prices, as the mark edged up 0.1 percent.

However, when energy and food are removed from the equation, core inflation rose at its fastest pace in a year – adding 0.3 percent for the third straight month.

 More shoppers bought automobiles and made online purchases as retail sales increased almost half a percent. ---

Many of the items moved into our internet shopping carts originate in China.

The trade spat between the two countries took a step back from the cliff this week. China signaled a return to moving more U.S. pork and soybeans through the checkout counter and vowed to lift punitive tariffs on the two products.

Paul Yeager reports.  

Officially, China has stopped purchases of America’s agricultural products, but as the fields turn toward harvest, so did the story with the economic giant.

The Chinese began buying U.S. soybeans this week. The news came just hours after a report revealing July was good for domestic pork producers. The U.S. Meat Export Federation has reported, despite a 62 percent tariff on American made pork, Chinese imports of the protein were up 51 percent over a year earlier.

Late in the week, the U.S. and China pledged reductions or delays of tariffs on some goods caught in the Trade War, the exact concessions vary but all were made in good faith ahead of scheduled talks for next month.

Steven Mnuchin, Treasury Secretary: "Well there's no question, the only reason why China is seriously negotiating with us is because of the tariffs. And this president is dealing with issues that should have been dealt with for the last 20 or 30 years. So tariffs do work. That's what brought them to the table. No different than sanctions work. And the president of course is a negotiator, so this this delay was a goodwill gesture and nothing more than that.”

As the president tweeted about the expectation China would be buying large amounts of agricultural products, the Treasury Secretary tempered enthusiasm.

Steven Mnuchin, Treasury Secretary: “I spoke to the Chinese, I believe, about a week ago. There is a deputy level meeting that is set up I believe it's either next week or the following week. They're coming here. We expect they'll be active worked on. The ambassador and I have a date in the beginning of October. I think you know with some of the logistics issues. First, the ambassador is very focused on getting USMCA done now that Congress is back in session, so that's the number one priority. We have UNGA coming up. The ambassador is working on the Japanese deal, so it's really just logistics issues. My expectation is they'll be here in October unless something changes."

As Congress returned to Washington, farm-state lawmakers hoped USMCA would be one of the progress points as well.

Sen. Charles Grassley, R – Iowa: “Modernizing and improving our trade relationship with Canada and Mexico is a bipartisan no-brainer.”

Sen. Charles Grassley stayed on the message he delivered while touring Iowa during the legislative break.

Mexico’s president Andrés Manuel López Obrador pledged support for passing USMCA and Canada’s Prime Minister Justin Trudeau is starting his reelection campaign by touting the benefits of working with the United States.

Justin Trudeau, Canadian Prime Minister: “We renegotiated NAFTA, securing trade access to our largest and most important trading partner at a time of U.S. protectionism and unpredictability.”

For Market to Market, I’m Paul Yeager. 

The Environmental Protection Agency fulfilled a campaign promise by President Trump, revoking the 2015 Obama-era WOTUS rule.

The legislation shielded a wide swath of U.S. wetlands and streams from pollution. The policy was opposed by developers and farmers who said it hurt economic development and infringed on property rights.

Critics of the rule say the power grab is over, eliminating the patchwork of regulations.

EPA Administrator Andrew Wheeler announced the move late this week.

Andrew Wheeler, EPA Administrator: "President Trump issued an executive order directing the EPA and the Army to review and if appropriate replace the 2015 definition. Today's action finalizes step one of our response to the president's executive order. Step one repeals the 2015 rule and recodifies the longstanding and familiar regulatory texts that existed previously. It also sets the stage for Step Two our proposed revised definition of waters of the United States. In December of last year the EPA and the Army issued a new proposed definition that would clearly define where federal jurisdiction begins and ends in accordance with the Clean Water Act and Supreme Court precedent."

Multi-generational businesses are rare. The dreams of the next group can take the original mission off course. Other times the industry changes dramatically. 

 By the time the seventh wave of a family comes along, the original operation might need spicing up or the dream dies.

A brother and sister went back to the preverbal salt mines to reboot a dormant business as Peter Tubbs reports in our Cover story.

The 400 million year journey of this artisanal salt ends at a pair of tweezers. Impurities and debris are meticulously pulled from the product before packaging at the J.Q. Dickinson Salt Works in Kanawha County, West Virginia. 

Nancy Bruns, Partner, J. Q. Dickinson Salt: “it's been an amazing personal and professional journey to bring back this business of my brother and myself. And we really, um, you feel the weight of those seven generations kind of watching you.

Nancy Bruns is the seventh generation of her family to make salt in the Kanawha River Valley. The family business began in the early 1800’s by boiling water drawn from the ancient Lapetus Ocean. Sitting 300 feet below the Appalachian Mountains of West Virginia, the 400 million-year old brine is pumped into pools covered by hoop barns, and dried using energy from the sun.

The trip from brine to jar takes five weeks with the brine being dried three times, the salt gathered by hand, and the crystals sorted and sifted into different sizes for packaging.

The Bruns family has been exploring new markets for their product and taken advantage of the growing interest in specialty foods.

Nancy Bruns, Partner, J. Q. Dickinson Salt:    “I mean, uh, consumers and chefs around the country really wanted locally made high quality products. Um, the so-called farm to table movement as well as, um, there are very few salt makers in the U.S. who make it by natural evaporation, solar evaporation. And I saw a real opportunity there.

The salt industry thrived in this corner of West Virginia in the 19th century, and was the state’s biggest consumer of coal before the Civil War. Pork processors in Cincinnati were the primary destination of salt from the Kanawha River Valley.

Production of salt from West Virginia declined in the years after World War II as underground salt mining became more economical. The Dickenson family moved into mineral extracts to keep the company afloat until the 1980’s. Nancy and her brother Lewis revived the family business by targeting specialty foods in 2013.

Nancy Bruns, Partner, J. Q. Dickinson Salt: “It's a really bright, bold flavor. You actually end up using less because it's a strong flavored salt. Um, and the texture of it is very unique. It's not hard like rock salt and it's not soft and flaky. It's got a nice crunch, but it's a delicate crunch and it really adds a nice pop of flavor in your food that's unlike any other salt in the world.”

The flavor and crunch found a fan base among chefs and food lovers across the country. The market is split between wholesale and retail customers, and consumers can purchase directly from the company.

Sales have increased at the same rate that production has expanded. The initial 400 pound test harvest has grown to an annual production of over 20,000 pounds of salt. The only limits to output are the number of sunny days in the Kanawha Valley between March and October.

Their over-the-counter business sees many of the same challenges faced by other niche food marketers including the need to convince customers to pay a price premium for an otherwise readily available product.

Nancy Bruns, Partner, J. Q. Dickinson Salt: 1.25  “But you really, once people understand that a naturally made sea salt is better for you, the mineral content is good for you and the difference in the flavor it makes on your food. They don't go back. So if you can just get it in their hands and in their kitchens, they're really loving it and they don't turn back to the big guys.

To greater diversify their marketing plan, J.Q. Dickinson Salt Works is also a popular event space for weddings and gatherings, providing revenue when the business would otherwise be closed. The company also hosts a monthly dinner series with regional chefs that supports local non-profits, and a salt festival in September.

Overall, reviving a business created by earlier generations has been a rewarding second career for the siblings.

Nancy Bruns, Partner, J. Q. Dickinson Salt: “And here we are on the same land where they made salt for so many years and it's, it's an unbelievable experience. And even though we're doing it very, very differently than they did it, it's, um, it's actually something that's brought our larger family together because we have this joint history and now it's alive again.” 

For Market to Market, I’m Peter Tubbs.

Next, the Market to Market report.

The trade fed on goodwill gestures between China and the United States, a USDA report, and drier weather conditions. For the week, December wheat was up 20 cents while the nearby corn contract gained 13 cents. China’s removal of a 30 percent tariff on U.S. soybeans helped extend a rally in the soy complex. The November soybean contract rocketed higher 41 cents. December meal added $8.50 per ton. December cotton improved $3.70 per hundredweight. Over in the dairy parlor, October Class III milk futures gained $1.44. The livestock sector ended in the green as October cattle improved $3.20. October feeders put on $3.68. And the October lean hog contract rallied $2.98. In the currency markets, the U.S. Dollar index lost 10 ticks. October crude oil declined $1.83 per barrel. COMEX Gold dropped $22.90 per ounce. And the Goldman Sachs Commodity Index gained a point to finish at 405.15. Joining us now to offer insight on these and other trends is one of our regular market analysts, Ted Seifried. Ted, welcome back.

Seifried: Hi, Delaney, thanks for having me.

Howell: Ted, let's talk briefly here about wheat. They had a very impressive 4% move in December futures over last week. What happened there? What was going on?

Seifried: Yeah, wheat for the most part was a follower for corn and soybeans. And when you have row crops improving, wheat likes to follow along with, we're a little bit concerned about the quality and harvest delays that we're seeing with the spring wheat crop. But, again, it's mostly following what the row crops are doing. And we had a report there on Thursday, it was extremely benign for the wheat, came out almost exactly as far as expectations were concerned for both U.S. and world, really nothing to see there.

Howell: So let's talk about the report as it pertains to the corn markets, Ted. Was there anything to write home about there?

Seifried: There's a number of different things going on in that corn report. For one, we saw a big increase in old crop ending stocks therefore new crop beginning stocks and that offset a smaller yield. Ending stocks came in higher than what the trade was expecting, yield came in higher than what the trade was expecting, so it was a bit of a bearish report for corn. We had the knee jerk reaction lower, we were down 5 or 6 cents or so, and then we closed the day up 7 cents. So you had a reversal higher day at a timeframe where we're usually looking to put in this sort of harvest or seasonal low. So that sort of reversal action on a negative report is really very good news. Now I'll say this, I think some of us were worried that corn report could have been a lot worse than what it really was. Some people thought maybe they'll raise the yield. So the fact that they didn't do that I think is a good thing. We're looking at, the USDA does ear counts but they don't do ear weights on the September report. So we're looking at ear counts being down basically at levels we haven't seen since 2012 but ear weights are still rather strong. And the question is, is that ear weight number going to come down as we get into harvest? And I have a sneaking suspicion it might. So I do think that there could be a lower yield. I also think harvested acreage could be lower. One or the other I think has to take a fairly large cut. So for me the production number will continue to come down. I'm very curious to see what quarterly grain stocks look like at the end of September because I'm a little bit skeptical about this big carryover that we're seeing for old crop. I think feed and residual numbers might be higher than what the USDA is currently looking at. But we'll see. I think there's maybe some positive headwinds coming for corn at least now between the end of the year, early January.

Howell: Ted, I want to go back to something you said earlier on there about the key reversal we put on this week and the seasonal tendencies to form a bottom now. With the reversal that we had does that indicate that a bottom is in or still need to put that in?

Seifried: First of all, not quite a key reversal because we didn't set a new contract low on Thursday. But a lot of time these sorts of reversals are indicative of either a bottoming formation or the beginning of a bottoming formation. When we started the no planting rally back in the spring we had a key reversal on that day and then we never looked back. That could be the case here. I think a lot of it depends on soybeans. But either way I do feel like corn has reached a price level, a timeframe, and sort of a fundamental outlook that now would be a time where I think we could bottom and I do think we'll have a halfway decent harvest recovery.

Howell: Ted, before we get to the soybean discussion I want to ask a question here from Pete in Frost, Minnesota since you're kind of our ethanol guy. He said, what is long range effect of refinery waivers on the ethanol and 2020 corn price?

Seifried: Okay, Pete, I hope you've got about 30 minutes for this answer. No, look, yes RE's are not a good thing for the ethanol industry, we've seen I think 23 plants close in the last few months, that's not great, closed or idled in the last few months, that's not great. The thing is that a lot of these plants that are being idled they're coming from companies that have other more efficient facilities that are kind of picking up some of that slack. We haven't seen a huge drop in ethanol production but it's not a good feeling going into next year. It's not great when you see the USDA cut 25 million bushels off of new crop ethanol usage. So ethanol is a problem. And when we get into this winter and se start talking about elections you feel like this administration right now is really poking its constituency by the trade deal with China and also the ethanol issue. I feel like one or both of those need to get fixed before we go back to the ballots. I think the easier fix would be ethanol and I'm optimistic that something gets done with that. But I'm, I want to be optimistic about our ethanol export demand. Again, a trade deal would help with that. I think ethanol, the rest of the world is coming along, maybe we're not domestically as much, we need to really be pushing E85 more. But I'm optimistic for ethanol. However, we need to fix the RIN problem and the SRE problem.

Howell: I always know I can count on you to be pro-ethanol, pushing that E85. Ted, let's move on and talk a little bit about what happened in the soybean markets this week. There was a lot of news that sparked some excitement here at the end of the week. Opening up Monday do we have legs to continue higher?

Seifried: Well, I think so, with one little kind of asterisk there. A lot of this is coming from South American weather and I think that's getting kind of overlooked a little bit because we're talking about the USDA report, we're talking about how pod weights are so high, the USDA is using record pod weights for this current crop and all of us are saying no, I think that number is going to come down. So the general outlook I think after we see this report, after we saw this report on Thursday we looked at pod count, which really kind of confirmed what we had seen on the Pro Farmer Crop Tour, pod counts are down sharply, lowest that we've seen in four or five years, more. But the pod weights are off the charts. And we understand why the USDA does that. The idea is less competition so the plant is going to give more resources to each individual pod to add onto weight. The problem is, is that with a lot of these soybeans being planted really late or really, really late the plants aren't just going to continue to pack on weight like corn would because soybeans are more dependent on daylight rather than temperatures. So I figure that these late planted soybeans aren't going to really see these huge pod weight numbers. I think that number is going to come down. I'm worried that our national average yield in soybeans ends up 45 or below. So I think there is bullish reason to think longer term for the soybeans. But right now the trade deal with China, who knows, we could come in on Monday and that could all blow up in our face, it's happened before. So we've got to kind of really be on edge about that. But South American weather for me is maybe one of the bigger drivers right now. They're really quite dry right now and they don't have a lot of rain in their forecast.

Howell: Ted, I also want to ask, the report this week lowered ending stocks and new crop stocks for soybeans and you're mentioning maybe pod weights are lower or bean sizes are lower so yields could be lower. What does that do for our carryout? We were talking about a billion bushels maybe this time last year. Now the story seems to be changed.

Seifried: Okay, so in July, the July WASDE report we were looking for an over a billion bushel carryover. Now we're down to 640 million. So that's a significant reduction in just a couple of months. If yield continues to drop I think those ending stocks are going to drop almost the equivalent amount because I don't see a whole lot of fat to trim off of the demand side of the balance sheet. As far as exports are concerned we've been so pessimistic about that for so long that we're not really looking at high expectations for exports anyway. And then as far as the crush is concerned, crush margins are good. I don't see any reason why we would want to cut the crush more than 20 to 40 million bushels at most even on higher prices. So if you start taking away from that production number, 80%, 90% of that I think comes off the ending stocks and if we get down to levels like I was talking about, 45, 44, 44.5, even 45.5 for a national average yield, pretty quickly we're going to be talking about something close to between a 400 and a 500 million bushel carryover. And then if we do start to get a hint of a trade deal or a trade truce with China and China starts buying more soybeans like they were doing on Thursday, all of a sudden we always have to worry about running out of soybeans here. So I think I've been saying it for a while, the story of the spring was the corn, the story of the fall is the soybeans and that story is just starting to play out now. I think there's a lot more upside potential for soybeans.

Howell: Ted, we're going to save dairy for our Market Plus segment. Folks, you can catch that at We've got to talk about the live cattle and feeder cattle this week. There are some gaps in the charts on both feeders and live cattle. Are we starting to go back up and maybe fill some of those gaps that we've placed?

Seifried: Yeah, so on Friday we saw the feeder cattle take a little bit of a step back. With December corn closing over that $3.67, a very key technical resistance, now we're going to be a support level, I think the feeder cattle market is getting the feeling that corn has more upside potential and that kind of spooked a little bit on Friday. But overall, yeah, we had that gap lower based on the Tyson plant fire. The cattle market had a job to do when that happened. When that fire happened we had to make packers margins very enticing for that production to get offset by other facilities. And for the most part it has been. So boxed beef prices seem to be stabilizing. We are in sort of that time of year where demand kind of softens a little bit as we get out of the key grilling season. But it starts to pick up again as we get into the holidays. So it's just a short period of time. I think domestic demand stays strong. I think our export demand stays strong. I think we're currently in a bottoming, overall bottoming formation. I think we'll go and minimally fill those gaps. But into the end of the year I'm looking for strength in cattle.

Howell: Okay, Ted, I was traveling around the state of Iowa this week talking to all sorts of Iowa pork producers and I promised we would make sure and spend an adequate amount of times talking about the hogs, especially this week. Is this a turnaround week for the lean hog markets?

Seifried: Turnaround is an understatement. We were limit up on Thursday and then expanded limit up on Friday. That's as far as you can move in 2 days. No, that's fantastic. Again, a lot of this is all China news, really all China news. We had been very disappointed in the hog market or from our pork exports to China because China had not really been coming in and buying like we had anticipated they would with the ASF problems that they've been having. So we rallied on ASF but then when they weren't buying we took all the ASF premium and then some out of the market. Well now that we have China waiving tariffs on pork, we saw on Thursday that they had already come in and bought 11,000 metric tons of pork, there were rumors on Thursday morning that they were buying more aggressively and we might see that on the export sales sheet next Thursday. So now we're back to the idea of ASF is going to cause a whole lot more demand. So now we're reacting to that, we're trying to get back to the pricing that we probably should have been or stayed at in the first place. I think there's more upside potential as long as China does follow through on their purchases.

Howell: So, Ted, with that being said, we don't know, China is a wild card right now. For those independent producing, pork producing friends that we have out there watching the show should they be rewarding this rally?

Seifried: I don't think we're quite there yet. After 2 limit up days, limit up and expanded limit up, yeah you could have a setback at any point. We're leaving gaps on the chart on the way up. But really I think the work to do is what we do over Friday's high. Maybe $4 or $5. If we're expanded limit up again o Monday then I would start to make sales. But for right now I'm going to let this situation kind of play itself out.

Howell: And opening up Monday where do we think that trade is going to open?

Seifried: There was still a fairly decent size pool and the synthetics were trading higher. Ask me again Sunday night because who knows what sort of political news we're going to get or trade war news that we're going to get over the weekend so I don't want to get too aggressive with that. But I would think that we would be higher if not sharply higher on Monday.

Howell: Sharply higher on Monday.

Seifried: We're going to try.

Howell: All right, Ted Seifried, we're going to continue this discussion on Market Plus. Thank you so much for joining.

Seifried: The pleasure's always mine, Delaney.

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 Fall foliage and harvest season are drawing near. Search Iowa PBSMarket on Instagram and keep track of the great images we capture in the field in addition to finding behind-the-scenes images from our producers. Join us again next week when we’ll look at an industry facing winds of change. So until then, thanks for watching. I’m Delaney Howell. Have a great week!


Market to Market is a production of Iowa PBS which is solely responsible for its content.

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     


Grinnell Mutual Insurance