Market to Market (February 7, 2020)

Feb 7, 2020  | 27 min  | Ep4525

Coming up on Market to Market -- Presidential praise for the economy. The EPA stands up for Roundup. Filling the gap in the trucker shortage. And commodity market analysis with Tomm Pfitzenmaier, next.


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


Sukup Manufacturing Company – providing equipment and buildings to store and condition grain to help farmers adjust to market swings. We build drying, moving and storage equipment designed to preserve the quality of their crops. Sukup Manufacturing, store now, profit later.     


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. 


This is the Friday, February 7 edition of Market to Market, the Weekly Journal of Rural America.


Hello, I’m Paul Yeager, Delaney Howell is away this week.

A winter storm stretching from Texas to New York has already taken more than 5 lives and cut power for several hundred thousand customers.

The storm rounded out a week where politics took center stage in rural America.

A messy caucus Monday led to Tuesday’s State of the Union and Wednesday’s acquittal of the President.

As of Friday, the results for the Iowa caucus were too close to call with all eyes switching to New Hampshire.

Iowans travelled to rural city locations on a winter’s night at the beginning of the week to officially cast support for their presidential candidate as part of the Iowa Caucuses.

Gathering in church halls and high school gyms, the results of what was decided that night were delayed on the Democrats’ side of the process of picking a nominee.

Iowa Republicans picked President Donald Trump as their winner as he went in front of America the next night, delivering his third State of the Union address.

The President focused on many things, with the biggest applause lines from his statements about the economy.

Donald Trumps: “From the instant I took office, I moved rapidly to revive the U.S. economy — slashing a record number of job-killing regulations, enacting historic and record-setting tax cuts, and fighting for fair and reciprocal trade agreements. Our agenda is relentlessly pro-worker, pro-family, pro-growth, and, most of all, pro-American.”

Farmers were mentioned once in reference to new trade deals.

However, the National Farmers Union responded to claims made by the president about the “great American comeback” with a statement that farm debt has climbed to its highest level since the 1980’s farm crisis.

Farmers and ranchers continue to take the brunt of the trade war even with a signed cease-fire in place. Chapter 12 bankruptcies increased in 2019, but are still below historic highs according to a report by the American Farm Bureau Federation. The increase of 20 percent – almost 600 farms – is the highest filing rate since 2010, the year following the Great Recession. 

U.S. Farmers began receiving the third tranche of MFP 2.0 payments this week. The federal government has joined farmers in saying “trade not aid” but is making the payments to help offset losses from the U.S/China trade war.

In the month leading up to the announcement, the nation’s economy added to its gains. -

Last month, 225,000 jobs were created – in line with the Fed’s overall expectations.

The unemployment rate moved up 0.1 percent to 3.6 percent as more people tried to return to the workforce.

The Creighton University Mid-America Index pushed seven points above growth neutral with help from the USMCA and Phase 1 trade deals. However, the survey was conducted before the coronavirus began putting pressure on the regional economy. –

Since its introduction in 1974, glyphosate, marketed under the name Roundup, has had a significant influence on global agriculture. Many GMO crop varieties were developed specifically to allow the direct application of the weed killer.

Peter Tubbs has more as the EPA stood up for Roundup.

The Environmental Protection Agency has issued an interim decision on one of the world’s most productive and controversial weed killers.

The regulatory review by the EPA reaffirms the agency’s stance that glyphosate does not cause cancer.

Glyphosate, the key ingredient in Bayer AG’s Roundup, has been the target of litigation charging that exposure to the chemical leads to cancer in its users. Multiple juries have awarded millions to cancer patients who believe their illnesses were caused by the herbicide.

The EPA judgement follows similar findings by regulatory bodies in the European Union, Australia and Canada. In 2015, the International Agency on the Research for Cancer declared glyphosate a probable carcinogen. The EPA claims it considered a larger dataset than the IARC to arrive at its non-carcinogen conclusion.

The EPA also found no indication that children are more sensitive than adults to glyphosate, or that the chemical is an endocrine disruptor. The EPA also considers trace amounts of glyphosate in the food supply to be safe.

Bayer AG, which bought Monsanto in 2018, has maintained that glyphosate and Roundup are safe for both users and the environment at large. The agricultural chemical company is appealing the court verdicts against them. Reuters is reporting the agricultural chemical giant also has begun settlement talks.

The EPA is expected to render its final decision by the end of the year.

For Market to Market, I’m Peter Tubbs.

It’s not something you generally think about when picking up a delivery off the porch but chances are it got there by truck.

According to the American Trucking Association U.S. trucks moved nearly 11 billion tons of freight in 2017, generating about $700 billion in revenue.

The number of drivers bringing you goods from faraway places is starting to decline, but there are a growing number of people who are looking to make the open road their office.

Colleen Bradford Krantz has more in our Cover Story.

These truck drivers-in-training don’t typically sign up at Iowa Central Transportation Technology Center because of reports about a national shortage facing the occupation.

But the Fort Dodge, Iowa facility’s staff, who train the students to handle 80,000-pound semi-trucks, are happy to see the men and women walk in the door. This training center and others around the country know that the U.S. needs another 60,000 drivers.

The first signs of a shortage were seen in 2005, although things improved for a few years. The trend took a turn for the worse in 2011. The shortage has grown by about 500 percent over the past 8 years. Officials with the American Trucking Associations say the shortage could climb to 160,000 in less than a decade.

Dean Fryar, Transportation Technology Center: “Eventually the driver shortage will mean the companies can’t haul the freight that they have been hauling in the past. And so then it’s going to create delays, whether it be groceries or other goods...It can cause…just a kind of chain reaction.”

Experts at the ATA say the shortage is tied, in part, to increased demand for shipment of goods, but also an increased demand for drivers with a clean driving record.

Dean Fryar, Transportation Technology Center: “In my view anyway, the insurance companies have driven it. In other words, the drivers have to be very qualified now in order to drive for trucking companies…

They better have a squeaky clean record in order to be hired.”

At the same time, the Department of Transportation, hoping to limit fatigued driving, changed regulations in 2003 and 2005 to more strictly limit a semi driver’s allowed hours behind the wheel in a given period.

Dean Fryar, Transportation Technology Center: “The hours of service rules have gotten stricter over the last few years. That’s also made a dent in the amount of money that driver can make. And it has also made a dent in the amount of drivers that companies need because … productivity isn’t quite as much.”

Those factors, combined with the retirement of older drivers and a reluctance among drivers to be away from family on long-haul, multi-day jobs, have left the industry struggling.

Deon Clayton, a 26-year-old from Fort Dodge, signed up for classes to get his Commercial Driver’s License. The idea of travelling outside of Iowa sounded more interesting to Clayton than the factory jobs he held in the past.

Deon Clayton, Transportation Technology Center, student: “I wanted to do something where I could travel and that was my main motivation for being a truck driver… I haven’t seen most of the United States and I wanted to be able to get as many states under my belt.”

Clayton was only halfway through the 11-week course when he was handed a conditional job offer by an Iowa trucking company. He had no idea the nation was facing a driver shortage until he began his training.

Deon Clayton, Transportation Technology Center, student: “I found out when I got here and was like, yeah, that’s great because I was told that this is a good time to be getting into the industry … Most students get jobs before they even leave the program.”

Agriculture has yet to be affected quite as severely as some industries. Many times, agriculture products like livestock or grain only need to be moved a short distance, allowing drivers to be home most evenings.

The idea of retirement didn’t sit well with former farmer and emergency medical service worker Don Greiner. The Missouri man agreed to help a friend whose company hauls grain and fertilizer.

Don Greiner, truck driver, Oregon, Missouri: “I can’t sit around and do nothing. I gotta be doing something. So this is probably as good as anything. I make a few dollars at it and have a good time. I enjoy the people that I work with and the other farmers…. (But) I don’t want to be going over the road or something like that where I’m gone two or three …nights a week.”

During agriculture’s busiest seasons, Greiner might work longer days than before he “retired” from his last job.

Don Greiner, truck driver, Oregon, Missouri: “I went to work at seven yesterday morning and I got home about 10 last night. So 12, 14 hours or 16 hours aren’t out of the ordinary here during harvest and planting.”

An American Trucking Associations survey shows the average age of long-haul drivers is 46, younger than other segments of the industry. The ATA suspects older drivers or semi-retirees, such as Greiner, prefer the shorter travel and avoid the long-haul jobs.

The industry, which has about 3.5 million truck drivers, believes the best solution may be to bring in more women. Right now, females represent less than 7 percent of all drivers.

Bringing in younger drivers may be another solution, but truckers currently must be at least 21-years old to drive an interstate tractor-trailer.

In the meantime, driver-assist technologies are making life on the road a bit easier. Driverless semis are being tested in several regions, and at least one company hopes to have the backup driver out of the cab in 2020. Still, the days where fewer drivers are needed are a bit down the road.

Dean Fryar, Transportation Technology Center: “I don’t foresee the shortage getting any better anytime soon.”

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

Next, the Market to Market report.

The USDA says it will not include Phase 1 projections in next week’s WASDE. Commodity traders are expected to subtract China’s projected purchases and recalculate carryout numbers. For the week, March wheat rose a nickel and the nearby corn contract gained 2 cents. Predictions of heavy rain in South America and evidence the coronavirus scare is fading, helped add a dime to the March soybean contract. March meal fell $1.70 per ton. Cotton expanded a quarter per hundredweight. Over in the dairy parlor, March Class III milk futures lost 37 cents. The livestock sector finished mixed. April cattle put on 12 cents and March feeders cut $1.75. An announcement by Tyson’s CEO that their pork exports to China were 600 percent above the same quarter last year helped the April lean hog contract add $4.65, an increase of nearly 8 percent. In the currency markets, the U.S. Dollar index skyrocketed 136 ticks. March crude oil lost $1.19 per barrel. COMEX Gold plummeted $15.80 per ounce. And the Goldman Sachs Commodity Index fell a little more than a point to finish at 385.40. Joining us now to offer insight on these and other trends is one of our regular market analysts Tomm Pfitzenmaier. Welcome, sir.

Pfitzenmaier: Thanks, Paul.

Yeager: We have to start with the dollar. I said 136 ticks. We got a question that came in via Twitter this week that we thought was a good one. This came in from Former Farm Boy @ruralmidiowa. He says, I don't see any weakness in the USD anytime soon. So, what he's asking, why should we expect an increase in exports? So, you can answer either part of that first. Why is the dollar going up?

Pfitzenmaier: Number one, I think the dollar is going to continue to get higher. The dollar's value is based on differentials, interest rate differentials, and Germany had negative interest. I think that as long as the interest rate in the U.S. stays strong, which I don't really expect any big change there, possibly even could be moved higher if they think the economy gets a little too hot. I would expect the dollar is going to continue to be strong. As far as the second part goes, I guess you have to make the assumption that the dollar value makes a big difference. And I'm not totally convinced that within a fairly wide range if people need our products they're going to buy them and I'm not sure the dollar value changes that much. We may be more subject to the currency changes in Brazil and Argentina than we are to the U.S., changing the dollar value of the U.S.

Yeager: We'll get into the cheapest one at the Gulf here in a minute when we talk corn. Let's start with wheat though, Tomm, because there's all those TV shows on NBC, Chicago Hope, Chicago whatever, it was Chicago wheat that was leading. Is that going to continue to be a star of this market?

Pfitzenmaier:  I think so. That is the one everybody trades, that's where the volume is so I would expect so. We've kind of been in a trading range, bounced up a little bit. I think there's another 20 cents up in that Chicago wheat contract up in that $5.65 to $5.85 range. If you want to be a seller, I think you need to be, I guess I'd scale up somewhere up in that range and start to make sales. Export sales continue to be not that great. There's plenty of wheat around the world. There's a lot of, as we always have this year, is it too dry in the wheat countries, is it too wet or is it going to come out of dormancy too quick? All that stuff that goes on every year is going to give us little bounces. But in the end I just don't think we can go that far.

Yeager: All right. So you talk about moving up sales. How long of a period do I have to do that?

Pfitzenmaier: I think probably into the spring, probably pre-harvest.

Yeager: All right. That's on the wheat market. But on the corn as we were talking about just a minute ago right now the corn market is struggling to be, it's not the cheapest at the Gulf and it is the cheapest in the world at the Gulf right now, so why is that?

Pfitzenmaier: It's the cheapest until April 1st when Argentine corn becomes available and then that's the cheapest. So we've got a window here and we had good export sales as a result this week, are probably going to have another three or four weeks of good export sales as long as we have that price advantage. When that goes away then I'm expecting you're going to see a pullback in exports. Now, the China thing is the big wild card in there so we don't really know. The USDA said that they're, I guess I'd correct a little bit what you said in the intro in that they have said that they're going to incorporate what we know publicly. And there's a lot we don't know that is not public. So that is why I think people aren't looking for all that much change in the export estimates in the report next week is because there just is a lot of unknown and from what we do know there's probably not a lot of reason to change it much.

Yeager: Are you surprised at how much frankness sometimes the USDA has been on making statements like this like, you know what, we're only going to talk about this? They didn't always do that.

Pfitzenmaier: A little bit. They tend to be a little quiet about what they're doing and kind of leave a lot of uncertainty. So it's kind of a little bit refreshing in some respects to have them tell us that.

Yeager: That is surprising when you see that. You do have a report scheduled to come out on Tuesday. You've got some concerns about the 2020 crop size when it comes to corn.

Pfitzenmaier: I've got tons of concerns about it. If we come back in, plant most of those prevent plant acres, bring them back in, and these reports that the USDA does this outlook thing in February, that's probably going to use a trendline yield, that is kind of what they always do, which is quite a bit higher than last year's yield. So if you use a trendline yield, a big jump in acreage and demand that doesn't change all that much unless you're one of these that think China is going to buy us out of corn, it looks to me like you could be looking at a 2.7, 2.8, 3 billion bushel corn carryout next year. So it's another reason to me that I'm a little less than optimistic that China is going to run in here and buy corn because they can look at that too. They could very well stall here, wait for prices to drop and then step in because there's no real time restrictions, immediate time restrictions on the buying they do. And as far as I understand they're not even going to check them until July or August. It takes four months to do the paperwork. So why wouldn't you just sit, wait, see if we sag a little bit and then maybe step in and do some buying.

Yeager: And the Chinese might be doing that whole wait game too, right? They want to push the U.S. price down.

Pfitzenmaier: Exactly.

Yeager: So do you see China a bigger story in the corn market or in the soybean market when it comes to phase one with us twiddling our fingers and thumbs waiting for something to happen?

Pfitzenmaier: It depends on how you want to define the story. There's potential in corn and beans with the size of this Brazilian and Argentine soybean crops coming on here I don't see, I know the bean carryout is half of what it was a year ago and all that and that gets everybody kind of excited, but it's still we're probably going to be looking at a 400 to 450 million bushel carryout on beans. And once again if you pull those prevent plant acres in, use a trendline yield in beans, that could be a pretty good chunk too. Again I think soybeans in Brazil are a lot cheaper than U.S. beans. China historically doesn't tend to buy stuff that is expensive if they don't have to. So why wouldn't you, if you were China why wouldn't you buy the cheap beans to fill what you need for a while, wait and see if we do plant all these acres, do have a decent crop, which we have a pretty good tendency to grow crops under a wide variety of conditions, we've proven that the last couple of years, wait for U.S. bean prices to sag and then step in and buy them after that's done. So the near-term it's really hard for me to get all that excited. I don't want to be negative and I don't mean to say they're not going to buy anything but they could play us a little bit, like that's never happened before.

Yeager: I'm going to say let's move onto meats now shall we, Tomm, before we both get in trouble with a comment. The cattle right now the packer and the lots are kind of far apart on these markets.

Pfitzenmaier: I think the cattle market maybe got a little bit overdone. We have had exports are down 4.4% from a year ago so that is disappointing. On the other hand I think we've probably peaked out our numbers in cattle and they're going to start to contract a little bit. So it's hard for me to get bearish cattle down here in this $119, $118 is a 50% retracement in the April contract so we came kind of close to that this week. I guess I'm expecting that we're probably still going to have some weather issue, some demand issue, something that comes along to give us a pop in cattle. So if I was a producer I'd be staying open on cattle. I wouldn't get too concerned about that.

Yeager: Speaking of pops, hog market. Last week, it's been falling like a rock, not sure what the reason was there. What is the reason for this rise back up other than what Tyson said? Is there more in this story?

Pfitzenmaier: Well, we got wildly oversold. The other thing you've got to be a little careful with this Tyson comment is we had practically no exports a year ago so first grade math --

Yeager: Fun with percentages is what to call it.

Pfitzenmaier: Yeah, it's maybe not as significant as that sounds when you hear that 600% number. But we need, I've been saying this for a year, if China doesn't buy significant quantities we're producing way too many hogs. That is the reason hogs have gotten depressed. Part of it I think too is a lot of people have over the last year been trying to be long hogs and I think this was a week where they threw in the towel and said the heck with it and got out and that drove us down to lower levels. So I think it's going to stabilize. You could pop April hogs back up in that $75 range and it wouldn't surprise me just because it got so oversold. But don't get excited about going much beyond that without some huge quantity purchases by China.

Yeager: Yeah, because limit up on Thursday, triple digit gains again on Friday. All right. That's all we have time for, Tomm Pfitzenmaier. But we will keep this conversation going on Market Plus because I have a whole bunch, I actually did homework for you. This isn't the B team. I'm trying to be legit and everything. So Tomm, thank you much. That does wrap up the broadcast portion of Market to Market. And as I said we will keep this conversation going in Market Plus. That is where we answer more of your questions which come in through several different channels. You can find the show and submit questions to us on our website at And one of those social media channels is Facebook. It allows you to keep track of your favorites including those from rural America. You can find our links and photos under MarketToMarketShow. That is a new Facebook name for us, MarketToMarketShow. Join us again next week when we'll look at how a group of beekeepers are using groundbreaking methods to fight colony collapse disorder. So until then, thanks for watching and have a great week.



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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. 

Sukup Manufacturing Company – providing equipment and buildings to store and condition grain to help farmers adjust to market swings. We build drying, moving and storage equipment designed to preserve the quality of their crops. Sukup Manufacturing, store now, profit later.     


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. 


Grinnell Mutual Insurance