Market to Market - August 29, 2025

[Paul Yeager] Coming up on Market to Market, swatting away a malicious pest that squeezing the cattle trade. How pork producers are working through three big issues facing their industry and commodity market analysis with Sue Martin next.

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This is the Friday, August 29th edition of Market to Market, the Weekly Journal of Rural America.

[Yeager] Hello, I'm Paul Yeager. The new home building market has been one of the economy's bright spots for much of the last five years. However, in July, Commerce Department data showed a 6/10 of a percent drop in the new construction market, and it was down more than 8% from a year ago. Orders for durable goods items meant to last three years or more slipped by 2.8% last month. Fewer requests for Nondefense aircraft drove much of the drop, though machinery orders moved higher. The PCE tracks goods and services purchased by consumers. The mark was up 2/10 of a percent on the month and up by 2.6% in year over year readings. Consumers are always a key part of the economy, and often what could happen to them is often overlooked. In reports. The beef industry is looking at record prices for live cattle and feeders, while consumers keep paying the price at the meat counter. But one small factor could keep making a big impact on both sides of the farm gate. Peter Tubbs reports.

[Narrator] This week, Mexico reported that new cases of New World Screwworm in the country have jumped 50% since July of this year, and disease officials in the country have identified over 5000 cases in animals, with 600 still active. The USDA has announced a $680 million plan to increase production of sterile screwworm flies, which are used to eradicate active cases of screwworms. A New World Screwworm case was first identified in southern Mexico in November of 2024, which led to the border being closed to the importation of animal commodities. The border has been open and closed over the past nine months, with the third suspension to animal traffic in July. The border closings are straining the supply chain of cattle destined for the U.S. market.

[Colin Woodall] When you look at the U.S. beef cattle industry, it really is an integrated North American supply chain, including both Canada and Mexico. So anytime there is a disruption with either our northern or southern border, it does have a direct impact on us as U.S. cattle producers. We have a lot of cattle feeders right now that are struggling to be able to keep their feedlots up and going because they cannot bring feeders out of Mexico. That, of course, could have a trickle down impact on whether or not we can maintain packing capacity in those areas.

[Narrator] The parasites have been described as flying piranhas, which eat their hosts from the inside and can kill a steer in 7 to 10 days. Screwworms can also be spread by deer, feral pigs and even birds. Warm blooded animals can serve as hosts for the parasitic larvae, which eventually develop into adult flies. The screwworm was eradicated from the United States in 1966, and from all of Central America in 2001. From Market to Market, I'm Peter Tubbs.

[Yeager] The speed and intensity of change in the pork industry has been a lot for producers to contend with. In 2025, the National Pork Producers Council spent much of the year trying to get a repeal of proposition 12. That's the mandate on space for animals in confinement. They're trying to get that into the next farm bill. The release, though, of the Maha report, added a new front. This, along with an ever changing trade war, has been the focus of NPCs. President Duane Statler. Our conversation is part of the next MtoM Podcast and is this week's cover story.

[Duane Stateler] Where does the Secretary of Agriculture is? We've got, you know, concerns on prop 12, and then we're also got concerns on the labor, and then we're just got a few concerns about some of the things in Maha. You know, just wanting some actual answers rather than some, you know, copies of drafts that might be intended for use or not intended for use. Just what is going to be the examples that we're going to, you know, guidelines are going to go by.

[Yeager] And you'd like to see the details because then you can plan. Are you of that mindset?

[Stateler] Yes. We need the details. We've got we've got two big concerns. The details is in the classifications of processed ultra processed and whatever they seem to leave out the processed step and go. They're putting everything into ultra processed and I just have a problem with that myself. And so does the industry that when you're talking about ultra processed, I don't consider sausage, ground pork that had some salt and pepper added to it to be sold as ultra processed. But when you only have the one classification, they're either talking about, you know, they're just talking about ultra processed, that's where it could fall into, well, is it or isn't it?

[Yeager] Do you know what the room is and where you can be in it to help in that conversation?

[Stateler] Well, we were invited in just the same as what the crop people were. Everybody was invited in to the white House there some time ago. We expressed those concerns. We have turned in, you know, our you know, we were asked for more information. So our staff put together, you know, some ideas on, you know, coming up with the process. You know, what is processed, what is ultra processed. And let's try to protect, you know, dense protein, you know, that is good protein. And but we haven't heard back.

[Yeager] You were probably thinking the majority of your term was going to be spent on prop 12.

[Stateler] And it has been my first year on the board. We made the decision to go, you know, prop, you know, to go to the Supreme Court. I mean, and the whole plan was we're going to, you know, go to California. We're going to lose. We're going to go to the ninth Circuit. We're hopefully we're going to lose. So we get to the Supreme Court. And we knew before we ever made that decision as a as a board, Paul, that we had producers that at that point in time they were all upset that we didn't do enough to try to stop this. Well, we didn't have $25 million to throw at that campaign. And if we threw 25, they'd come back with 35. We don't have the deep pockets that they did. The activists wanted to divide the, you know, the producers, and they did, because we've got those now that have went to prop 12, which is fine, because they're even with what we do stopping this, you know, carrying on to the other states, if people in California want to have prop 12 type meat, those producers should be getting a premium for that. You know, both GT and the Henson bill, the Save our bacon. It does nothing to do to strip the right of the California people to, you know, have their prop 12. But it stops this from being a patchwork, that there will be no more of this across the country.

[Yeager] Do you get the sense that that bill, the bacon bill that you're referring to, has a better chance of passing than getting some of the language into a farm bill in a in a larger package.

[Stateler] I will take. Either way, we can get it across the line. Paul, I think there's I think there's a chance for one or the other. I don't know whether I wish I can't give, I can't be hard on GT Thompson because he said, we're going to get a, you know, we're going to get this done and reconciliation. A lot of people didn't think that was going to happen. He is adamant. I talked with him just two weeks ago that we are going to get a 2.0 or skinny farm bill across the line, and if he does that, we're in.

[Yeager] Is it moving? Well domestically versus internationally specifically as we talk trade.

[Stateler] I think we're picking up domestically. Trade is, you know, a real issue for us. You know, all the trade deals are, you know, not exactly defined yet. And they're still getting wrote up. We you know, we're on top of that. I think there's going to be some openings.

[Yeager] How long can you hold out for details on some of these trade deals that will help pork producers across the U.S.?

[Stateler] Well, a little bit of a history lesson. Paul, is normally when you did the trade deals the old fashioned way, that took up to two years before you did it. This is on a fast track now. They said they won't ever get 90 deals in 90 days, and that's proven true. But trying to get this stuff down, there's two problems with what we're trying to do. It's a lot of information that they have to get put forth in these trade deals. I mean, you're talking not only our products, but everybody else's products. I mean, automobiles, tools, you name it, you know, you're going with. And the other problem of it is, is this is a on a piece of paper, just like an executive order. And then we have a few people, a few Republicans in the, you know, on the Hill that think that maybe we shouldn't be part of the WTO anymore. Well, hold back, boys, because if we're not part of the WTO and if someone just comes in and reverses all these executive orders that this president has wrote for these trade deals, then we're going to revert back to our old trade deals that we've had. And if we're not a member of the WTO, we won't have any reciprocal action to go back to try to get us to that part. If we're not a member of the WTO, we'll have, you know, our old legislative things will not be of existence. So, yes, we do still need to be a member of that so that if something happens with these trade deals, we still preserve everything that has been legislatively passed. And these agreements with countries in the past that would still have some teeth to them.

[Yeager] The full Mtom episode will release Tuesday.

[Announcer] Next, the Market to Market report.

[Yeager] New export sales provided some spark to corn futures, while the wheat market dealt with the final pressure of harvest for the week. The nearby wheat contract added $0.07, and the December corn contract gained $0.09. China purchased some cargoes from Brazil, leaving the U.S. out of the market for another week. The November soybean contract lost $0.23, while September meal declined $4.90 per ton. December. Cotton shrank by $1.48 per hundredweight over in the dairy parlor. October class three milk futures improved $0.14. The livestock market was higher. October cattle added $1.77. October feeders put on 1.98, and the October lean hog contract expanded by $3.83. In the currency markets, the U.S. Dollar index improved 19 ticks. October crude oil gained $0.31 per barrel. Comex gold added 9220 per ounce, and the Goldman Sachs Commodity Index was up by more than three points to settle at five 4810. Joining us now, regular market analyst Sue Martin. Hello, Sue.

[Martin] Hi there.

[Yeager] Harvest pressure and wheat. When is that story going to end?

[Martin] Well, I think we've maybe seen a low in wheat here this past week. Seasonally, we tries to put a low end by Friday right before we move into Labor Day weekend or September. And it usually also is enhanced by the fact that globally, most countries are done harvesting wheat as well. And I think that when I look at the wheat market, I still think it's a market that has potential. And of course, the corn market certainly offered some help this week as well. Closing higher for the month. And so I think that puts some support under the wheat market to.

[Yeager] But they're going to need more than just a friend. Are they going to need some export sales. Maybe a resolution of some world global issues. Maybe India comes on to buy. Which of those has the most promise?

[Martin] Well, I think for now there's thought that Vietnam, Bangladesh and Indonesia will be coming in to buy. And that's part of thought to be part of the Trump agreements. And then the other thing is you look at the Black Sea and part of our situation, with prices remaining. So low and not very robust, so to speak, is because Russia's got to pay for a war. And therefore their values of wheat are low and have been ever since. We basically seen them start the war, and we peaked at a high and came down. So we have to compete. And right now I would say we look at Russia's crop, even Ukraine's experiencing something similar. It's been very dry, but yet the spring wheat in Russia is thought to be yielding good. But it's very poor quality because they had a lot of rain in that area, and they used that to blend off with. So, you know, not all is great there. And then Ukraine, of course, very dry as well, and less production. So, you know, the global side of the equation sounds like we're still going to have plenty of wheat. But right now I would say maybe the U.S. is a little competitive.

[Yeager] Quality. That's a story that's starting to develop in the corn market. There's this thought that crop tours and rust and these things are starting to impact traders. Do you believe that?

[Martin] I think so. We closed December corn higher for the month of August, which should portend to try to push out our high of August in September when we come back after the holiday weekend? I think the traders focus is going to be about that report on September 12th and thinking, what will NASA do with the yield? Will they bring it down off of 180 8.8? I think they will. At worst, they'll stay unchanged, but I think they'll come down. The shock would be if they tried to add to it, because nobody believe it. But, you know, the southern rust, if you're north of I-70, the southern rust is really taking a toll. And I would have to say, you know, if you have a severe case of southern rust, it can take 45% of your yield. And the good thing about the southern rust is that it does not winter over like Tar Spot does. So that will be the good side of it. But still, it's bringing crops home quicker. I've heard reports out of Illinois where the stock condition is not good and stocks are falling over because of it. So it's going to be an interesting time. But it's certainly I think, has all of a sudden gotten everyone thinking the yields going down and just how much is it going down.

[Yeager] So if I'm a producer sitting here going, I have a rally, I should take advantage of this versus what you're just saying is there's potential to rise. What should I be doing right now? What's my range that I'm looking at?

[Martin] Well, I think first off. I think the one thing for corn and soybeans as well, that we have to keep in mind is what's the weather going to be like here in September? Now we're arid and dry. Now, but the weather sources that we're following that we have found to be very accurate this year and have been for probably the last three years, are predicting that by mid-September we're going to turn cooler and wetter. Not a good thing for if you're wanting to harvest beans or corn. And in the meantime, it reminds me of the year of 2014, where we had a wet fall. It started in September, and I'm kind of intermixing markets here a little bit, but for example, the soy oil, the traders were short soy oil and long soymeal, and that spread premium just wrapped them. I mean, they took huge losses because all of a sudden, by the time we got into the first trading day of October, we put lows in in corn and in beans and the market rallied quite sharply. In 2014. We went from on December corn, we went from a price of 318, I think it was in a quarter to a high of three, eight, 98.5, I think. Is the rally on that on the beans. We went from 901 up to 1086, and I think that when you're already starting to look at the most, the greatest yield potential and now you're ratcheting it back, and then if we turn wet, I think all of a sudden the commercials, the elevators and what have you and ethanol plants are going to think, oh, my goodness, I'm going to have to improve this basis to see if I can get them to try to bring me something. And of course, we all know that there's plenty of bean space on farms available now too.

[Yeager] Is there? Because that's a big concern, is that not everybody thinks there's enough space to handle this crop on on site.

[Martin] Well, as large as it is, because of all the added acres and because of the 180 8.8 ore as Arlan Suderman 180 8.1, I would have to say, you know, we're going to have a big crop, but it's a matter of how big. I think it's not as big as they originally thought. And the market has seen short covering because of this. So we closed higher for the month. I think we're going to make some higher highs. Just on the anticipation of how much will we shave off this yield.

[Yeager] I'll put you I'll pin you quick corn for 50 potential for December. Still here in the next month.

[Martin] If we turn wet like it's forecast, I think you could see that in October.

[Yeager] All right, well, then, in beans, I want to throw this in here because this question I think is also part of the conversation. Boyce in North Dakota wants to know, Sue, does Brazil have enough soybeans for China to last until Brazil's next harvest, or will China have to come to us at some point this fall or winter? Specifically? Let’s Talk beans?

[Martin] Well, I think that you've got China pretty well bought up through October, November. Not so much, but they've been buying and I sort of think it's kind of a way of rubbing our face in it. When they go to Brazil and keep buying here of late for October, November delivery, the crush is been pretty active in China. It's also been active in the U.S., and it's been active in Brazil. And so I think that when we look at the crush and you look at Soymeal and actually our commitments of Soymeal are running about 30% ahead of the ten year average. And the new crop coming up has is basically running about 40% over the five year average. So we've got good demand for Soymeal at this time, but then cure for low prices is low prices. And but I look at China and I think they're basically rubbing our nose in it because back in 20 1819, they were taking beans then in. Well and then they turned and banned the imports of beans. But then good old Cofco international grains were taking about 90, 95 or so percent of the deliveries until everybody caught on to them. And then they disappeared. Well, they're probably using another entity and coming in under their umbrella. So maybe they're getting us beans and we just don't know it.

[Yeager] It's always possible we'll continue our soybean discussion. Sue on Sunday you are asked on our panel about cattle and you have a theory that this live cattle market might have might. I mean, it's I should say only a dollar rally this week. Is that I. Don't you think that rally is far from over?

[Martin] Well, I think first off, I looked at the years since 1976, and we had four other years where we made higher highs with the June contract for the year and then the August contract came on and took that high out. And then there was the one year, 1980 put a high in in August. And then we broke into December. And interestingly, 1981 did not make higher highs. Then the next year was 2008. Well, that was the year that China had the Beijing Olympics. And so they had been all about building hotels and nice restaurants. Cabbies had to have clean new vehicles. And so I think that was a year that, yes, June cattle made higher highs. And then the fall contracts came on, August made higher highs. And I believe in July and then went inside range in August. And then the October contract stuck a high in September that year we broke prices from that high into December by $34. And then in the next year was and we did not make higher highs in 2009. And I think it's because the the Beijing Olympics, they were importing a lot of beef. And then after the Olympics were pretty much done, they didn't need us. And then the next year was 2014. And that year we basically rallied again. August took out the high in July inside range month. And in the month of August, and then the October came on and made higher highs in September. Even might have went on into October. And then the December contract that year broke close to $30.

[Yeager] So you're looking at a technical thing right here more than anything.

[Martin] Yes. But there's there's another side to this.

[Yeager] And you've only got a few seconds.

[Martin] Sorry. okay. You know, like I say, I told that story about talking, but the thing is that when you have a cattle market that has pushed like this one and we have tight numbers in our on our radar for next year. But the thing is, is that we have to keep in mind this new world. Screwworm I read today, it has expanded 56% into August 17th over what it did in July. That's a lot. But part of I think what's fueling that is if you notice, you look at Texas, Oklahoma, they're catching rains. It's those wind currents that are humid and wet that are coming up and and that feeds that new world.

[Yeager] Screwworm that'll be something we have to watch and we'll have to talk about feeders in more depth and hogs as well. In Market Plus. So I appreciate your time there, Sue. Thank you so very much. Thank you. All right. Sue Martin, everyone, and I want to let you know that you have been watching the analysis segment, and in a moment, we will continue our discussion in an online only segment. Search Market Plus with Sue Martin. Wherever you get your podcasts to hear that conversation or go to our website of markettomarket.org. I do want to say thank you for checking out the images and stories from behind the scenes of the 50th season celebration in our latest Market to Market Insider newsletter. We told you a little bit about Sue. We showed a picture of her being here. Sign up to know what's next at our website of Markettomarket.org. Next week we are going to honor the tradition of cheese making. Thank you so much for watching. Have a great week!

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

I wouldn't be here without my customers.

Yeah, I'd like to thank the customers.

They're very dear to our heart.

It's about the people that you're working with and the relationships that you have.

Thank you.Thank you, thank you.

Thank you from the bottom of my heart.

Family owned and operated for more than 60 years. Sukup Manufacturing is a full service provider of grain handling, storage and drying equipment, helping farmers feed and fuel the world.

[MUSIC]

Tomorrow, for over 100 years, we've worked to help our customers be ready for tomorrow.

[MUSIC]

Trust in tomorrow. Information is available from a Grinnell Mutual agent today.

Trading in futures and options involves substantial risk. No warranty is given or implied by Iowa PBS or the analysts who appear on Market to Market. Past performance is not necessarily indicative of future results.