Market to Market (May 22, 2020)

May 22, 2020  | 27 min  | Ep4540

Coming up on Market to Market -- “Unpredictable spring weather leaves producers in a pinch. One supplier sends new crop pigs to different marketplaces. And market analysis with Sue Martin, next.


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This is the Friday, May 22 edition of Market to Market, the Weekly Journal of Rural America.


Hello, I’m Paul Yeager.

As every state in the union starts to re-open in some capacity, the scars of shutting down for several weeks may take months or years to heal. --

More than 2.4 million people applied for unemployment benefits last week bringing the total to 38.6 million filings.

The Commerce Department says housing starts plummeted 30 percent in April to the lowest level since 2015.

Existing sales were off almost 18 percent, but supplies tightened – pushing the prices to a new high.

The Rural Mainstreet Index improved from April’s record low to finish at 12.5. The Creighton University survey of bank CEOs in 10 states also revealed three out of four banks in rural areas say they have restructured farm loans to deal with weak farm income. --

Producers in those areas are trying to find ways to at best, break even.

Livestock operators are searching for new options as processing plants slow their intake of product.

John Torpy reports.

For the better part of a month, the supply chain providing meat to U.S. consumers has been coping with the impact of COVID-19. With close to half of the nation’s slaughter capacity closed or greatly reduced, consumers are left with purchase limits and limited choice at the meat counter. For producers, many are left with the task of euthanizing perfectly healthy animals because there is nowhere to take them for processing.

Brad Benda, Hog Producer:” We were scheduled to have our barn empty by May 5th. Um, we got a little pushback, you know, in scheduling. It seemed like it took forever to kind of get loads lined up. And then when we did have it lined up, they were canceled occasionally, but we lucked out as far as being able to get them out and gone. Barns cleaned out and we restocked again. And that would be the pigs that then Jake took control of.”

Brad and Jacob Benda are a father and son team working on a multi-family operation in east central Iowa. They farm around 2,800 acres and raise close to 5,000 head of hogs annually.

Jacob Benda, Hog Producer: ”The packer notified us that, you know, they're not gonna be able to guarantee the numbers that our contract that we have with them for shackle space. /we were basically had a load scheduled, they would get canceled or pushed back, rescheduled to other days. Um, what normally would take about like three weeks to clean out a 1,200 head building took about six, just shy of six weeks.”

Packing plants continued to close due to coronavirus outbreaks among their employees, causing a bottleneck for livestock producers trying to get their animals to market.

Jacob Benda, Hog Producer: “So we were just, and it was every day phone calls to the buyer, you know, can we get a load in this week? Can we get two loads in this week? Can we get any loads in this week?”

Time was against Benda and other producers like them. While packers could not take hogs, producers had nowhere to send the contracted animals as new pigs were on the way to fill barns that were already at maximum capacity.

Jacob Benda, Hog Producer: “That awful realization of if you had to actually euthanize pigs to, you know, get to be able to take that next group of babies coming in or you would try and find somewhere to put them for a temporary holding. Um, there's so many, so many different things that you can do. And then, you know, ultimately if none of that can be found, then you have, you'd have to euthanize the animal.”

In an effort to avoid culling part of his herd, Jacob Benda turned to social media as another avenue to sell his animals.

Jacob Benda, Hog Producer: ”I was telling dad, it's like, you know, what if I put out there that, you know, this is where we're at, kind of be vulnerable as a producer. I mean, and you know, say we're in a tight spot, we're going to try and you know, if there's any interest in these pigs, they're not at market price. Because, you know, in a co in our co-op, you know, we have a cost of production and that's what it costs us and you know, a couple dollars of feed and we, we need to, we need to try and move these.”

What happened next astounded the Benda’s.

Jacob Benda, Hog Producer: ”It blew up. Just went crazy. I mean crazy is kind of the best word I can use to describe it. Um, I, it started off with, you know, friends sharing and then friends of friends shared it and the friends of the friends of the friends that shared it shared. And um, within, I believe two days it was over a couple thousand shares. And then as of, I think yesterday was 21 or 21 and a half thousand shares… I got calls or messages from everywhere. Florida, Ohio, South Carolina, California, everywhere. Can you ship me a pig? So just blew up.”

The social media post ended up moving a portion of the Benda’s inventory, helping them avoid the possibility of having to euthanize pigs.

Jacob Benda, Hog Producer: “We've got rid of through about 30 percent of the feeder pigs that we had. If I was able to go through and actually respond to everybody on Facebook, I would have that building, that 1,200 head building, sold over probably twice.”

But even with the success found in an unlikely arena, the operation still has hurdles to jump over as the coronavirus continues to rewrite “normal” for agriculture.

Brad Benda, Hog Producer: “We're out for maximum production in our sow unit. So to scale that back prematurely would be a bad deal, you know? So I think it's just a moment by moment, month by month kind of decision going forward on whether or not this does return to normal, if normal ever be reached.

This week, the USDA unveiled a $16 billion aid package aimed at assisting livestock producers like the Benda’s who are affected by processing plant closures due to the coronavirus.

Brad Benda, Hog Producer: “What the president offers is going to help out, you know, a lot, you know, because you still have, uh, commitments, you know, short term feed bills to pay, stuff like that. Um, but yet I also hope that in that, that there is something sorted out that they can get this packing plants back up to a hundred percent.”

For Market to Market, I’m John Torpy.

Other than in Florida and much of the Gulf Coast, the Drought Monitor is on holiday east of the Mississippi River.

Farmers in parts of Minnesota and the Dakotas are still trying to get 2019’s corn crop out of the field. Just a few counties over, drought conditions are taking hold. 

Josh Buettner reports on the challenges of this growing season.

This week, heavy rains pumped the brakes on a robust spring planting run.  USDA reported 80 percent of the corn crop among the nation’s 18 top producing states had been sown before record floodwaters sliced through the Wolverine State, prompting Michigan’s Governor to declare a state of emergency following catastrophic dam failures. 

Gov. Gretchen Whitmer/D - Michigan: “Experts are describing this as a 500 year event. It's gonna have a major impact on this community and on our state for the time to come.”

Heavy runoff from 4 to 7 inches of widespread rainfall pushed rivers higher early in the week as over 10,000 central Michigan residents were ordered to leave their homes twice in less than 24 hours along area waterways.

Debra Dodd/Spokesperson, Consumers Energy: “We have a substation, at the mouth of Sanford Lake that leads into the mouth of the Tittabawassee River, and that is totally underwater.  Midland County has been one of our hardest hit areas, there's been significant flooding. I understand there's been about 50 streets that are actually closed to traffic as a result of the flooding.”

The president pledged his administration’s support for the state on a visit to a nearby Ford Motor plant reconfigured to produce ventilators for COVID-19 patients.

President Donald Trump: “Americans are praying for central Michigan. We're going to take care of your problem. The governor and I had a great conversation this morning.”

Headquartered in Midland, Michigan, Dow Chemical Company said there were no risks to people or the environment despite floodwaters mixing into containment ponds at a local Superfund site.  And while city officials report no deaths or injuries, the company, as well as the Environmental Protection Agency, will be required to review and reassess the site after the deluge.

Raymond Gulvis/Arenac County, Michigan: “This is the worst flooding I have ever seen in this area. The worst.  Years ago, the wind used to come out the east and cover the farm with water.  We have since diked it, but this year the dike wasn’t tall enough.  It’s the price you pay for living in the low area along the river.  Do I like it? No.”

For Market to Market, I’m Josh Buettner.

Next, the Market to Market report.

The market shrugged off government payments plans in favor of trying to figure out if China was in or out of the U.S. grain market. For the week, July wheat gained 9 cents and the nearby corn contract was down a penny. Limited global demand has given the soy complex cold, wet feet. The July soybean contract fell a nickel. July soybean meal declined $3.40 per ton. July cotton lost 64 cents per hundredweight. Over in the dairy parlor, June Class III milk futures added 30 cents. In the livestock sector, August cattle dropped 50 cents, August feeders fell $2.28 and the July lean hog contract shed $1.60. In the currency markets, the U.S. Dollar index weakened 63 ticks. June crude continued its run higher closing up by $3.65 per barrel. COMEX Gold shed $18.10 per ounce. And the Goldman Sachs Commodity Index lost 7 points to finish at 295.90. Joining us now to give us some insight is regular market analyst, Sue Martin. Sue, good to have you in studio.

Martin: It's nice to be here.

Yeager: I tried to comb my hair since people were coming in here. I've been talking to computer screens, so forgive me.

Martin: No, you look good. 

Yeager: Well, let's talk about looking good for one day. The wheat contract, Kansas City kind of been on that run down, down, and then all of a sudden spike. Is that weather here or is that weather overseas?

Martin: It was weather overseas more than anything. Looking at the European Union, the weather there dryness that is encompassing into Germany, France a little bit, a little bit of pulling but especially more than anything Russia. Southern Russia is still dealing with dryness and the concern is that their exports are going to be down considerably as is their production. And so that is, I always think of the time when we got down into the very latter part of June and we had been talking about Russia and all the issues they were having one year and then the market exploded. And of course sometimes in a year like this you can set up an early harvest low too.

Yeager: Are we looking, are the conditions there for one of those explosions in June?

Martin: I kind of think so but I think we're going to meander. If you look in mini markets they all are sort of set up the same, very oversold, very overdone, indicators extremely like Bollinger Bands, extremely spread apart, almost like jaws and the market is now trying to level itself out, it's kind of spent itself and now we're just kind of working ourselves into a range trying to work higher. The wheat market looks to me like it's not done rallying but certainly Friday was a risk off type of day because you've got China and the U.S. kind of duking it out a little bit in words between the two Presidents and in the meantime we have a forecast that is calling for rain next week for almost every day.

Yeager: And in the area where there's wheat production in the United States where it has been dry. Real quickly before we move on, Sue, are you at the point, are you selling, waiting on this meander? Are you holding? What are you trying to do? What are you looking for?

Martin: At this moment I would hold. I would not sell. On our website we're 60% sold and now we're just sitting back and waiting, in fact we even recommended maybe replacing some of those sales on the board this week. I think that we're going to see a chance to maybe push, you might see Chicago go up around $5.40 basis July, the KC you might get up around $5.10., $5.15, maybe a little higher. But I think that then we'll have to take another look. Do I see an explosion? Not yet. I think we need to get more into June, take a look at European weather and just how tough has it really been.

Yeager: You talked a little bit about these two countries duking it out, the United States and China, as I called it that little developing country. Bradley in Upland, Nebraska is asking about this one and we had a couple of questions about it. With commodity prices so cheap can China buy enough volume to meet their Phase 1 trade deal obligations? He's also hearing reports of corn harvest basis level twice as large as last year. Do we lock in now or wait for an improvement? Do you want to cover China/U.S. trade relations first?

Martin: Yes. I think they can. You have to remember, China is a country of about 1.4 billion people. They've lost some through the COVID but they need everything, they needed everything before. And they've made trade deals around the world with many countries and now that, I think this is a trend that we're going to start seeing, especially if we see COVID break out again, which won't shock me if it does, but I think you're going to see countries going back to something we used to see until the early '90s, late '80s, early '90s when we started going into just in time inventorying. I think countries are going to start building reserves and having food on hand. And of course this week China, Beijing told their state agencies like Sinograin and Cofco International Grain, which we've talked about before in various shows, but they were told to go ahead and start buying more mainly because the country is concerned that if they get into another situation the last thing they want is to run low on food.

Yeager: We've talked about China on soybeans but it has been corn that has made more of the news here in the last two to four months. But if you're China and you continually get beat up verbally by this country and you're having a spat with Australia at the same time, why do business with either one of those countries? I'll just do all my business with Brazil.

Martin: Well, that's an interesting thing that you say, China certainly has been avidly taking beans out of Brazil very aggressively. But they're getting low on beans themselves. They have been selling so aggressively. And in the meantime when we start getting in and looking at our fall they're going to be needing beans as we go into the turn of the year. What's really interesting about Brazil is they are now on the tip of the iceberg turning into probably one of the biggest COVID-19 cases in the world and they're not really, we have to remember Brazil is an emerging economy so their social network isn't really set up quite like the U.S. and maybe China and others. But because of it we could see this impact exports on many markets, especially the meats. But Brazil is one country we better be watching real closely because they might be about ready to hit themselves pretty hard.

Yeager: And they have developed quickly in the last couple of decades. Let's get specifics here on July corn. Held pretty much even two weeks in a row, this thing is not moving. Are we going to see this pattern continue or do we have a breakout one way or the other?

Martin: Well there's an old saying, never sell a quiet market or kick a sleeping dog because they'll both bite. And corn has kind of been that way, beans too, when we start to set back they get sort of quiet. But a week ago corn closed lower, after making higher highs closed lower for the week. Then it turned around this past week and took out that high, again closing lower for the week. I've been on deck of thinking ever since January that corn would go down into June and I still believe it's going to. What I would love to see is that it comes down, takes the low out, and I know that's not a popular thing to hear, but take the low out and all of a sudden you run out of sellers. You've got a market that option volatility is extremely low. You have managed funds that are over 230,000 contracts short. You have a beautiful recipe for the market to turn around in a heartbeat, all it needs is a trigger.

Yeager: All we need is a trigger. All right. I'll ask you the trigger in Market Plus. I need to get to soybeans now. Again, this is a market where limited demand from China but at some point there's some buying. At some point is it just a shrug of your shoulders of China buying or is there something else underlying with this market in soybeans?

Martin: I think in beans we look at Argentina and they are a country that is going to have to file for a $65 billion debt loan that they need to refinance and farmers are holding tightly because of inflation and the peso is dirt cheap and so they're not selling and Argentina needs those exports and they're not getting them. So I think that when we look at soybeans the crush is pretty good, soy meal is struggling, came down to the lowest levels it has had on a weekly basis since 2016 and that is probably being helped a little bit by the drop in livestock numbers through euthanization and what have you and aborting sows farrowing and what all. But when I look at the bean market I think here's another market too that has potential once we get into June. Now, the market seems to get quiet on breaks. Granted, we had a risk off day. There's good support on the June, or the July, around $8.28 to $8.32 area. But there's thoughts that feeding the bear is expectations that we're going to increase bean acres at the expense of corn, especially in the Northern Plains.

Yeager: If you can get in the field.

Martin: If you can get in the fields is absolutely right. I think if I was a farmer in North Dakota and I had corn that I needed to be getting planted I probably would opt to take prevent plant rather than plant beans.

Yeager: All right, I need to get to the livestock sector because, Sue, I think we have talked over the years about this market has consolidated. We have things where packer doors are shut, we're not taking things, the cattle all of a sudden you hear about profit margins and finally a little bit of a selloff this week. What is, is it all about supply? Is it all about we’re catching up with what has happened over the last month?

Martin: Well, I think the packer this week the cash was ranging from about $117 to $120. It depends on how willing the packer is to dole out a little bit of his profitability because he knows the government is kind of checking in and investigating. But on the same token you want to keep your people that are supplying you in business and you still have a situation in the feedlots where we're backed up. Cattle numbers are backed up. We're not increasing beef production because we aren't processing the numbers we need to do. And we always thought there would be a little bit of a tighter supply as we went into August and September. Now you're going to have numbers fulfilling that hole so maybe it isn't quite as a detriment as you'd think, but it would have been more friendly had we had that hole. But we're spreading the beef production or meat production out. In the meantime here again Brazil with packing houses, if JBS for example in Brazil was smart enough to learn off their experience in the U.S. and there's some others that are doing testing now, then they'll skinny by and be okay. But it wouldn't shock me if they have a huge problem and then all of a sudden you have a global tight supply of meat and proteins. Here's the thing, if we've got a minute --

Yeager: Barely. Yes, go.

Martin: Okay, here's the thing. We've had a change in our weather outlook for the month of June. But still looking at heat in July and August. What would happen in the Western Corn Belt if we were to have some 100 degree days? What would happen if our grasses, if we turned drier and our grasses started to deteriorate? We would be in a mess. So, I think when we get a chance here on these feeders getting them lifting, get some hedges on them. If nothing else buy puts, just get something there.

Yeager: Quickly, cattle on feed, what did you see from that report?

Martin: Well, the one thing that I was pleased about, we all knew that placements were going to be way down, you can't get them in the feedlots. But the marketing number, the trade was looking for an average guess of around 74.7 I think and it came out at 76. So yes it is still down quite a bit but it was a little better than what the trade was expecting. So that should be a plus for the June come Tuesday.

Yeager: Right, placements down 22%.

Martin: The on feed was neutral, right in line.

Yeager: Hog wise, final minute --

Martin: I'm bullish hogs.

Yeager: You're bullish hogs. Why?

Martin: Yes. I think that first off we're cutting numbers, we know that. Yes, same situation you can't push them through as fast as you'd like to. And labor is the big issue. But on the same token I think here again Brazil is a big producer of pork and I think we've got awfully good demand, I think China will be coming in for more, they need it, they want it and I also believe that when we look at this July hogs, June hogs, doesn't matter, either one, you've got the indicators so overdone and they're starting to pull away from the lower Bollinger Bands and usually that will push you at least to a 10 week moving average and maybe even through it.

Yeager: All right, I'll have to take you and put you on point about prices later. Thank you, Sue Martin, good to see you. That will wrap up the broadcast portion of Market to Market. But there is still more to talk about and we'll cover it in Market Plus where we'll answer more of your questions. We had some great ones this week. You can find it on the web at Our YouTube channel is the quickest way to find our video stories from the week and dig in the archives. Find our channel by searching Market to Market. Join us next week when we'll examine the supply lines handling the reopening of America. Thank you so very much for watching. Have a great week.




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

What's the most complex industry on Earth? It's not genetics, or meteorology, or logistics. It's a business that involves them all. It's farming. Thank you, farmers, from Pioneer.  


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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