Market to Market - August 18, 2023

Market to Market | Episode
Aug 18, 2023 | 27 min

On this edition of Market to Market ... the U.S. draws a line in the sand over Mexico’s GMO corn ban. Ukrainian farmers worry about the bottom line as easy export avenues are cut off. Plus, going beyond the niche at meat lockers post-Covid. And, market analysis with Mark Gold.


Coming up on Market to Market - The U.S. draws a line in the sand over Mexico’s GMO corn ban. Ukrainian farmers worry about the bottom line as easy export avenues are cut off. Plus, going beyond the niche at meat lockers post-Covid. And market analysis with Mark Gold, next.

What's next doesn't happen by chance. It happens when researchers and farmers work together to solve tomorrow's agronomic challenges. We're committed to creating what's next because at Pioneer, our name is our mission.


Sukup Manufacturing. Celebrating 60 years of innovation as a family owned and operated manufacturer of grain storage, drying and handling equipment out of Sheffield, Iowa. Learn more at


Tomorrow. For over 100 years, we've 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, August 18 edition of Market to Market, the Weekly Journal of Rural America.

Hello. I’m Paul Yeager.

The South and Southwest have been on roast much of the summer. Now the Plains and Midwest will bake the next several days with temperatures easily above the century mark and likely break records.

Inflation, which has long been running hot, is moderating.

However, consumers are still spending. Retail sales were up 0.7 percent in July.

International trade is vital to the agricultural sector when it comes to neighbors to the north and south.

This week, one North American dispute escalated.

David Miller reports.

Mexico and the U.S. have reached an impasse over an import ban on genetically modified corn. This week, U.S. Trade Representative Katherine Tai made good on her promise to ask for a dispute settlement panel under rules set down in the U.S. - Mexico - Canada free trade agreement.

The battle is over a decree published by the Mexican government in late 2020 banning the import of GMO corn for human consumption in January of this year. There are also plans to ban imports of GM corn for animal feed. Mexican officials argue biotech corn may affect human health, even when used in animal feed, but have yet to present proof of the claim.

A statement from Mexico's Economy Department says the measures under debate have no effect on trade and do not violate the USMCA.

U.S. Secretary of Agriculture Tom Vilsack released a statement saying, in part, “Mexico’s approach to biotechnology is not based on science and runs counter to decades of evidence demonstrating its safety.”

Mexican farmers raise the bulk of the corn used in domestic food production, but do import about 15 percent of the U.S. corn crop each year.

Newly issued regulations have removed the start date for the ban along with replacing a hard date for implementation with a gradual substitution.

The yet to be selected panel of experts will have about six months to study the complaint and release its findings. Trade sanctions could follow if Mexico is found to have violated the rules of the trade pact.

For Market to Market, I’m David Miller.

The movement in grain through the Black Sea region has been a headline maker since February of 2022 when Russia invaded Ukraine.

As the conflict drags on, farmers have struggled to find ways to sell and move products for various reasons.

Peter Tubbs files this report on those trying to make a living in this environment.

Victor Tsvyk harvested 170,000 bushels of wheat this month. But after Russia exited a wartime deal allowing Ukraine to ship grain to other parts of the world, he has no idea where his bounty will go or how his farm will survive.

This season, the Ukrainian wheat and corn crop is expected to be 40 percent smaller than the historical average due to a drop in planted acres. While the crop may be smaller, farmers are more concerned about market access.

Oleksandr Sivogorlo, agronomist: "The problem is, first of all, that for us, for the world community, what is grown in Ukraine can be available in those countries that need the grain. We cannot sell our products, as the port infrastructure is partially destroyed and blocked."

 Last month, Russia pulled out of the deal brokered by the U.N. and Turkey that provided protection for ships carrying Ukrainian grain through the Black Sea. Concern over the safety of sailors, ships and cargo has forced more grain onto rail cars for transport to other countries. Along with the reductions in shipping capacity are increasing worries about the economic impact of higher shipping costs.

Recent attacks on Ukrainian ports have caused tremors in global grain markets, but the coming harvest in the northern hemisphere has put downward pressure on prices.

Oleksandr Sivogorlo, agronomist: "What Ukraine produces, it consumes only 15-20% internally. 80% of it needs to be exported, but we do not have this opportunity today."

Before the Russian invasion, 80 percent of Ukrainian wheat was exported, primarily to Egypt, India, China and the Middle East.

The spring wheat harvest is complete and planting of winter wheat has already started. As the next crop goes into the ground, current farmers continue to worry the next crop may go no further than the local storage facility.

Viktor Tsvyk, Ukrainian farmer: "What I could feel in this situation? It is a great sorrow for everyone. It is hard for me to talk about this. But we need to experience it."

For Market to Market, I’m Peter Tubbs.

Part of COVID relief dollars were spent on ways to feed Americans.

Local meat processing was one of the first enterprises to receive assistance. Iowa lawmakers acted in 2021 to assist with the pandemic backlog. Some of the establishments that came on line have experienced growth and, in a few cases, expanded.

Josh Buettner has our Cover Story.

While the coronavirus pandemic ravaged the global economy, the repercussion carved into rural America was its own animal. Advocates say unemployment, mental health and food security issues hammered many areas already in the midst of long-term decline.

Dr. Chad Hart/Extension Ag Economist/Iowa State University: “When we look here in Iowa, we have seen a population drain, especially over the past 40 years.  And we’ve also been watching that drain, not only from a statewide perspective, but within the state.  We have seen our rural communities getting smaller, and our urban and suburban communities are where we’ve seen tremendous growth.”

Dr. Chad Hart is an Agricultural Economist at Iowa State University.  He worked the family meat locker back home in southwest Missouri – and says the sticker-shock of hefty retail prices back in 2020, due to COVID hobbled workforces at corporate packing plants, revealed an edge for nimble operations like where he grew up.

Dr. Chad Hart/Extension Ag Economist/Iowa State University: “When you go into your big grocery stores, everything is pre-packaged.  You’re sort of buying what they want you to buy – whereas, when you’re working with a small meat locker, often times, you can custom order.  It’s like – ok, you want your steaks how thick?  You want your hamburger in half pound, pound, two-pound packages?  That’s something that a smaller business does have some more agility to do.”

Last spring, the Biden Administration announced a roughly $1 billion investment to help strengthen meat supply chains.  A lame duck Congress and the White House followed up early this year with millions more to stir competition and boost more small processors.

Dr. Chad Hart/Extension Ag Economist/Iowa State University: “Every move that the government makes has some trade-off to it.”

Hart says rural businesses should build on pandemic-related momentum because urban centers offer more goods at lower prices to consumers accustomed to driving long distances.

Josh Dreps/Co-Owner/City Meat Market: “We make everything homemade, fresh.  There’s not too many places like this anymore, really. We still do it the old-fashioned, hard way.”

Some have turned that exodus on its head for decades, drawing an array of customers by focusing on value-added niche markets.

Josh Dreps/Co-Owner/City Meat Market: “Between fresh cut steaks, and counter lunchmeats, and different kinds of sausages… bacon, jerky…I would say we are probably pushing 2000 pounds a week.”

Josh Dreps is a 6th generation co-owner of City Meat Market in New Albin, Iowa.   Grocery and other businesses have closed shop here over the years as distributor favor drifted to nearby La Crosse, Wisconsin.  Drep’s family store, in operation since 1882, has endeavored to plug some of those food-related gaps, while diversifying their traditional meat offerings which have captivated carnivores for generations. 

Josh Dreps/Co-Owner/City Meat Market/New Albin, Iowa: “Word of mouth has really helped.  I would say that’s our greatest advertisement.  It’s a dad that brings the son in, and then his son comes back with his dad in a wheelchair, and he’s bringing his grandson along, but, you know, a lot of times there’s people that we’ve never seen before, and uh…What brings you here?  Oh, nothing, we just heard that this was a good place to come, so we decided to make a day trip, so, you know, we get people from all around.  We’re still sending packages from Florida to Texas, Washington … everywhere in between.”

2020 U.S. Census data confirms Professor Hart’s rural flight claims, which he adds can result in small towns competing with each other for more scarce consumer dollars.

Dr. Chad Hart/Extension Ag Economist/Iowa State University: “The locker plants that have survived up to this point, often times aren’t just locker plants by themselves.  They are doing something else that’s helping draw those customers and keep those customers with them for the long haul.”

Roger Meirick/Co-Owner – Elma Locker and Grocery/Elma, Iowa: “The backlog is tough.  I mean, we’re booked out almost through 2024...try to leave a little room for some that we missed or people forgot…The quarters and halves and whole beef…lotta different people buying them now that never did before.  It got big.”

Elma Locker and Grocery in Elma, Iowa has bucked the trend as well.  Co-Owner Roger Meirick says business has skyrocketed since 2020, but input shortages and rising labor costs have ridden shotgun.  His skilled crew motors through some 20 head of cattle and 30 hogs per week, along with seasonal wild game.

Roger Meirick/Co-Owner – Elma Locker and Grocery/Elma, Iowa: “Good Iowa cornfed beef, good burger…It’s just tough to book beef two years in advance and you still don’t even have the bull bought yet.”

Some fifteen years ago, a previous locker and separate grocery store folded, so Meirick left a good job with a local co-op to partner up in offering both essential food businesses under one roof.  The community has supported them through the Great Recession, COVID and inflation.

Roger Meirick/Co-Owner – Elma Locker and Grocery/Elma, Iowa: “Groceries are 30…40 percent higher.  In a little store like this, it’s a little bit tougher for us to get our volume and low prices.  Profit margins are pretty low on the grocery because we’re probably a little higher to start with.”

Traditionally, meat locker market advantage lies in affordable bulk meat prices driven through multi-party client deals. 

Both Elma and New Albin have gone against the grain – slowing population losses to a drip over the past decade.  Observers claim such novel approaches could help stoke more resilient main streets elsewhere, but many scratch their head about what the future holds.

Dr. Chad Hart/Extension Ag Economist/Iowa State University: “The virus changed a lot of things for folks, and we’re trying to figure out which changes are going to stick with us in the long run, and which changes are going to fade away.  Are consumers willing to deal with less choice, possibly higher cost, in order to keep that local business viable and running?   Or, will we fall back and say, no, we like the convenience of buying from those regional centers or buying online and having that brought to us.”

For Market to Market, I’m Josh Buettner.

Next, the Market to Market report.

The heat dome’s forecasted movement over the Grain Belt contributed to trade staying in a smaller range. For the week, the nearby wheat contract lost 14 cents, while September corn added a nickel. The soybean complex seemed more reactive to the pending heat. The September contract closed higher by 26 cents on the week and September meal shed $6.40 per ton. December cotton shrank by $4.27 per hundredweight. Over in the dairy parlor, September Class Three milk futures improved 52 cents. The livestock market was mixed. October cattle cut $2.50. September feeders dropped $2.92. And the October lean hog contract improved 80 cents. In the currency markets, the US dollar index rose 55 ticks. September crude oil declined $1.84 per barrel. COMEX gold shed $27.40 per ounce. And the Goldman Sachs Commodity Index cut almost 12 points to settle at 577.50.

Yeager: Joining us now is Market Analyst Mark Gold. Hey, Mark.

Gold: Hey, Paul. How are you?

Yeager: Good to see you.

Gold: Nice to be back.

Yeager: You just saw the story about Ukraine and Russia. I had somebody ask me at the Iowa State Fair this week, how serious should we believe Russia saying what their numbers are, what the Ukrainians numbers are? We're not paying attention to the story liked we used to. What is really happening there in your eyes influencing the wheat market?

Gold: Well, certainly Russia has got an awful lot of wheat to sell. Every time every month comes out the higher and higher estimate on the wheat. The Ukrainians aren't doing that bad considering the war conditions. So, when you've got cheap wheat, and the Ruble has taken a pretty good drop here in the last month making their wheat even cheaper to export. Now we've seen the deal with Egypt and now India making deals with the Russians. It's hard to compete with such cheap prices out there.

Yeager: Yeah, the Russia product is the cheapest. What about domestically? We talk about heat. It's going to get hot in those winter wheat acres, drought starting to creep back in into some of those spots. What's a domestic U.S. wheat producer supposed to do right now?

Gold: Well, just get the crop in, get the spring crop planted and then hope for the best that we get some rains. The heat is not going to be as much of an impact on the wheat right now as it will be on the beans and to some extent the corn. But it's an interesting situation with this heat. In the 50 years I've been in the business I've never seen a summer where August, the last two weeks of August, push back over 100 and no rains. We've never seen that. We've seen it maybe in the first two weeks and then we get rains in the last two weeks and we still make a crop. This is a bit different. We saw the crop ratings improve when we had rains in the first week in August. Now we're shutting it off, a blast furnace of heat coming in. I don't think the genetics will take this all that well and I think particularly the soybeans are going to have a problem. I don't think we've seen the end of the corn numbers going down in terms of the crop progress. So, I think there's a problem out there.

Yeager: We'll get to soybeans in a minute because I have a very specific question on what you're saying. Corn wise, you think the heat, there's a school of thought that says that crop is pretty much done, it's just a finishing off. You don't buy that?

Gold: I don't buy it, not with this kind of heat and no rain. You still need moisture to finish off a crop. We always talk about we like to see some good rains to finish off the crop. Well, not only aren't we getting good rains, we're putting the heat on this thing, 105, 107 degrees in Kansas, 102 in Nebraska, Arkansas, Missouri, all getting hit, southern Iowa. There's still growth left in the corn crop and I believe we're going to do some damage out here.

Yeager: So, do you see more of an impact then on that December contract? We've been flirting, kind of dancing here for a little while. Is that telling you that heat is baked into this price or has yet to be factored in?

Gold: I don't think it has been factored in. I think a lot of people saw the rains in August and said, okay, we've made a crop, next. And again, we've never seen this before. And my guess is the next two weeks of crop progress are going to show continuing deterioration in the corn and in the beans. And I think, like I said, we've got problems out here.

Yeager: We could have our lowest exports in 10 years. There's questions about the size of the crop. Demand seems to be an issue moving forward. Your weather story is bullish. What wins out here then?

Gold: I think in the short run next week if it's as hot and dry as they say we tack on another 30 or 40 cents in corn and maybe 75 cents or more in the beans. And I think at that point it's probably another marketing opportunity. It's another year where we've been up, we've been down, we've been back up again, back down, and now maybe up again. And you've got to take advantage of these opportunities for exactly what you say. The demand, particularly in corn or wheat isn't there. The demand in beans, particularly for soy oil, is there, no question about it.

Yeager: The beans, they develop a little later in some of these states. The heat bakes them is what you're saying. Is that why they were able to stabilize a little better than wheat and corn?

Gold: I think that's part of the reason. The soy oil demand is just huge. Right now, it's the cheapest veg oil in the world, so we should be seeing demand pick up there. And when I look at some of the reports I'm seeing about pod counts out there and the size and everything else, it tells me that not only is this heat affecting the market, affecting the growth in the soybeans, but the early heat and dryness that we saw affected it as well and yes, it was probably saved by those rains in August, but now with this heat again and these pod counts being low I think that is going to be the surprise on the crop tour next week when they see, geez, pods aren't out here.

Yeager: So, you allude to the Crop Tour, that historically sometimes goes a little under wheat USDA says the final crop is. But it does give us a little better snapshot. How much stock do you put in that?

Gold: I think it's a good trend to get an idea if we're missing something big. I don't think it's necessarily the most accurate forecasting tool for the final crop production. But I think it gives us a sense that if the rains did stave off a real problem in the beans but now we've got this pod issue, that is going to show up because they're counting the pods. And if it's as low as I think it can be, I think that is going to be a surprise to the market.

Yeager: I'm going to ask you a question back about corn but it does have bean implications as well because of the catastrophic size of things. Tony in Nevada, where he knows a little bit about heat, how many more catastrophic weather events does Mother Nature need to unleash on planet Earth before traders realize $5 corn is dirt cheap or you could also say $13 beans are cheap?

Gold: I don't disagree that beans and corn are cheap here. I would say that, how many more catastrophes can we throw at it? It looks like we can throw one or two more at it. They talk about climate warming but nobody has talked about what really caused this heat, which was this volcano, underground, underwater volcano off of Tonga, it's called the Honga-Tonga Honga volcano and it was one of the biggest volcano eruptions they've seen. Those water molecules in the air is really what heated up the atmosphere out here. So, when you see things like a hurricane about to hit California, the weather has changed, but it may not be because of what a lot of these people think it has been. It can be other things.

Yeager: Well, if you saw the local news this morning here in Iowa they're talking again about the smoke coming through. That has been a story all summer. Do you have any sense yet on smoke's impact on crop, improving this, disproving that, changing patterns?

Gold: You know, I think that's a hard nut to crack. We saw the smoke around the Chicago area and it was significant. Did it have any real lasting effects on the crops? Probably not because we had enough rain to take care of it. But, it's another issue in Canada. We've seen more bizarre weather events this year than I can remember. And what's the true source? I don't know if we know the true answer to that.

Yeager: We had a cattle on feed report, we'll get to that in a moment. Let's talk live cattle because they were a little more the headline maker. Are we setting into a little wave lower here? Have we hit that top part of the cattle market?

Gold: Well, what has been interesting about the cattle market is the box beef market just keeps jumping. We jump $5 yesterday, another $1.90 I think today, trading somewhere around $315ish. And the fat cattle haven't followed through really, except we did have a nice comeback today in the feeders and in the fats despite the corn being strong. What bothers me about the cattle market is the box beef and apparently the demand is still pretty strong, yet we can't make new highs out here. And that's always a bit of a red flag. So, I'm a little skeptical of this cattle market. As you mentioned, the cattle on feed I thought was friendly with the placements being as low as they were. But we really haven't reacted to these low placements. Partially what is I think happening in the cash market is guys are trying to get cattle out into the system before this heat comes. But that should translate eventually into some lower box beef prices out here.

Yeager: Cattle on feed numbers, on feed July 1, 98%, placed on feed 92%, fed cattle marketed 95%, all bullish numbers you say. Is there one that stands out?

Gold: Well, certainly the placement number, it's a good three points under what they were looking for. The marketings are just a little bit higher out there, which is good. So, it's a bullish number. Maybe that was kind of baked in a little bit in the last two hours in the cattle market on Friday. We'll see how it reacts. If we can open higher, stay higher, maybe make new highs off the numbers, then I'd say maybe there's another run coming in the cattle. We haven't seen that happen for a long time and I'm skeptical whether it will happen this time. But this cattle market, it's changing. We've seen some things in the pricing where now some guys are pricing cattle by the pen, which we haven't seen in probably 40 years. So, what is behind it? I think maybe the packers are trying to keep some real prices from showing up into the averages. But, who knows.

Yeager: Oh, I could say a lot of things, but I'm going to get us both in trouble. Hog market, it has been different. Like soybeans have been different in grains, hogs have been different lately in livestock. Why?

Gold: Well, the hog market, particularly the December, they just keep pounding it, except today it came back pretty good, two cents or more. I don't know why they're looking at the numbers and thinking December is so bearish, not when you've got problems around the world. Swine flu still hasn't been vanished, maybe this vaccine will help it. But I think hog prices are really too cheap out here, I really do. And when we've come from $110 or higher than that and now we're looking at $70 --

Yeager: Very good, appreciate your time, Mark. Thank you.

Gold: Thanks.

Yeager: Good to see you. That's Mark Gold, everybody. We're going to pause this Analysis and continue our discussion about these markets in our Market Plus segment. You can find both Analysis and Plus on our website of All of these resources are free. YouTube connects you to our full program, Market Plus and the MtoM podcasts. When you subscribe and turn on the notifications by clicking that bell, you will know before anyone else our work here is ready for you. Follow along at Next week, we look at incentivizing farmers to protect a natural resource. Thank you so much for watching. Have a great week.



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

What's next doesn't happen by chance. It happens when researchers and farmers work together to solve tomorrow's agronomic challenges. We're committed to creating what's next because at Pioneer, our name is our mission.


Sukup Manufacturing. Celebrating 60 years of innovation as a family owned and operated manufacturer of grain storage, drying and handling equipment out of Sheffield, Iowa. Learn more at


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