Market to Market - August 25, 2023

Market to Market | Episode
Aug 25, 2023 | 27 min

On this edition of Market to Market ... excessive heat presses on Middle America as tropical storm systems hit the coasts. The arguments for and against a controversial carbon pipeline. Incentivizing farmers to protect a natural resource. And, market analysis with Dan Hueber.


Coming up on Market to Market - Excessive heat presses on Middle America as tropical storm systems hit the coasts. The arguments for and against a controversial carbon pipeline. Incentivizing farmers to protect a natural resource. And market analysis with Dan Hueber, 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 25 edition of Market to Market. the Weekly Journal of Rural America.

Hello. I’m Paul Yeager.

Monetary policy makers head to Jackson Hole, Wyoming late each summer in a tradition dating back decades. The retreat atmosphere allows for a change of scenery - even if the decisions stay the same as if the leaders were in Washington, D.C.

Fed Chair Jerome Powell said Friday a further interest rate hike is likely as the economy has been growing faster than expected.

Mortgage rates hit a 22-year high this week of 7.23 percent - keeping many buyers on the sidelines. 

The higher rate has stymied the existing home market as July’s reading fell 2.2 percent. The year-over-year pace is off 17 percent.

Durable good orders tumbled 5.2 percent last month with fewer contracts for Boeing. The core reading was higher when transportation was removed.

Wednesday’s high temperature in Des Moines was only 97, four degrees cooler than Phoenix. However, the heat index in Iowa was 114 compared to 101.

Meanwhile, the National Hurricane Center was tracking five disturbances at one point this week.

Our weather wrap starts with Hilary and the rare West Coast system.

Here is Colleen Bradford Krantz.

The first tropical storm to hit southern California in 84 years has moved on leaving heavy damage in its wake. Large equipment led the clean-up of mud in mountain and desert towns with area residents lending a hand.

The amount of precipitation that swept across the Death Valley region hit hard in an area unaccustomed to heavy cloudbursts.

Senior Public Information Officer Shane Reichardt, Riverside County Emergency Management Department:  "In the hills above us, we had approximately 13 inches of rainfall in a short amount of time. That's really the kind of rainfall rates that cause the damages that we are seeing downstream. So, that 13 inches basically equates to about a 1000-year storm."


As Hilary moved east, Nevada felt the impact of the storm clouds as did areas of Oregon and Idaho.

Tropical Storm Harold came ashore in southern Texas this week.

Here in Corpus Christi, thousands of homes were battered by high wind and heavy rain - eventually losing power as the first storm of the season slammed the area. Harold stayed just below hurricane status.

One of the hottest weeks in the Grain Belt lived up to its forecasts. Triple-digit temperatures and heat indexes blanketed 22 states as more than 126 million people were under heat warnings for several days.

The Drought Monitor actually improved as a whole in the continental U.S., staying consistent with the last several weeks of readings. However, conditions intensified in the areas already plagued by drought.

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

Five states are going through the process of hearings involving a carbon pipeline.

The process takes time and many phases.

This week in Iowa what could be six weeks of hearings began for the Summit project.

David Miller was there.

Tim Baughman, Farmer - Denison, Iowa: “Summit Carbon Solutions wants to take our land for their private profit pipeline scam.

This week, the Iowa Utilities Board began what is expected to be several weeks of evidentiary hearings. When they are finished, the Board will determine if a construction permit will be granted for the controversial Summit Carbon Solutions CO2 pipeline. Before the hearing began, about 200 landowners and supporters gathered outside the venue in Fort Dodge, Iowa.

Tim Baughman, Farmer - Denison, Iowa: “Our safety, our land, our lives and livelihoods are more important than Summits for profit bottom line.”

Witnesses were concerned about who would be responsible for soil compaction, damage to drain tile, what they called ambiguous language in easement contracts, and the consequences of a pipeline rupture along the 700 miles of the Iowa portion of the Midwest Carbon Express.

Glen E. Alden, Landowner, Garner, Iowa: “Now, out here in the rural, like where we’re at, it’d only take out a couple homesteads, you know, not even a good mass shooting, you know, so, uh so that’s no problem. In the county, it comes terribly close to Corwith, which is several hundreds of people, maybe that’d make the news.”

The bulk of those testifying objected to the possibility that Summit will be granted the right to use eminent domain when landowners refuse to sign a voluntary easement.

Marcia A. Langner, Landowner - Ayrshire Iowa: “The hazardous pipeline, as proposed, could limit future homes, livestock facilities, machine sheds or other building expansions and limit the versatility of our farming and future farming operations.”

A spokesperson for Summit Carbon, says they have signed easement agreements with 73 percent of the landowners along the 2,000-mile, $5.5 billion underground pipeline that stretches across five states.

Monte Shaw, Executive Director of the Iowa Renewable Fuels Association, an industry advocacy group, says Summit Carbon is just satisfying the needs of their customers.

Monte Shaw, Executive Director, Iowa Renewable Fuels Association: “we shouldn’t pretend when folks show up here in a lot of red shirts that they speak for the landowners, they speak for a minority of the landowners. A voice that’s theirs to have and that should be heard, I’m not saying they shouldn’t be here, let me be very clear, but they do not represent the vast majority of, the super majority of landowners.”

The Iowa Utilities Board is expecting the testimony to last through the end of September.

For Market to Market, I’m David Miller

Those who depend on the Colorado River for their farming and ranching operations have been told to drastically cut their usage on their own terms - or the federal government says they will step in and mandate the cuts for them.

Conservation is one part of the water equation, quality is other.

Achieving clean water in a rural setting has often taken a carrot and stick approach with limited success.

Peter Tubbs profiles new efforts to prevent water pollution in Minnesota in our Cover Story.

Farming is often a balancing act between environmental sustainability and financial viability. On one side, you are out to make money and on the other, you are protecting your most valuable economic resource.

The Minnesota Water Quality Certification program was begun in 2015 to help incentivize farmers to protect one of their valuable resources: water. Almost 1,200 farms have been certified, covering nearly a million acres of Minnesota farmland. Certification also deems an operation in compliance with any new water quality legislation for a decade. The regulatory certainty has become an attraction for beginning the Water Certification program.

Brad Redlin is the Water Quality Certification Program Manager for the Minnesota Department of Agriculture

Brad Jordahl Redlin: Folks in Minnesota decided that they would like to try a certification program to really assess farms, help them and provide the service of getting them opportunity, finances, technical assistance for improving water quality.

Brad Jordahl Redlin: What we have is that regulatory certainty component which says that if you get water quality certified for a ten-year period, no matter what new laws come along or regulations of whatever form, you're going to be deemed in compliance.

That's really an insurance policy for those ten years to know they're either going to be in compliant with it after those ten years or they have ten years to make any tweaks that they might have to meet some new law.

The WQC program reviews every part of a farming operation that might affect the water leaving a farm, from tillage practices to manure management. The surprise finding is that farms that fulfill the parameters required by the Water Quality Certification are consistently more profitable.

Brad Jordahl Redlin: I mean, I know the answer is that when you do site specific risk assessment, response analysis, you're maximizing your performance on the farm. We have these licensed accredited agronomists, conservation planners that go out and work with the farmer throughout the entire operation every step of the way, maximize their performance. It's going to be more profitable. It's no different than any other industry or any other application of management to a production challenge. If you maximize that performance property or the profits are going to be there. And that's what's been shown to happen.

The study’s authors emphasize that being certified is not the key to improved profitability, but rather managing a farming operation at a level that would qualify a farm for certification is an indicator of other work being done.

Keith Olander is Executive Director of AgCentric, a State of Minnesota program that bridges the gap between agriculture and education.

Keith Olander: I think that as we look at that become to become water quality certified, you have to step through the process, which means that I am watching all of the practices on my fields and within my livestock. You know, is it as it comes to what are my tillage practices, what are my chemical practices, what are my cover practices on that soil in a more year-round basis?

Keith Olander: How am I managing residue? Those are things that maybe we take for granted in some of the farming operations, but it isn't maybe uniform in practice, but it tends to bring those out to say that helps us become more profitable. So, yes, I'm a little leery to just say your water quality is certified now and you're going to be more profitable.

Keith Olander: But undoubtedly that cohort effort over four years and starting to get over 100 farms, it's really hard to argue that.

Brad Jordahl Redlin: And so, the fact that certified managers are still showing to be more profitable than even their cohorts within this financial service provision process that the Farmers Manager program provides, that it just more clearly, you know, just really delineates the fact that what certification values is what's profitable.

Producers who market directly to consumers use their water quality certification to differentiate themselves for others in the market.

Keith Olander: That's possible. But over the long haul, absolutely not. Water quality certification is an enhancement to your farm over the long term. I think that's it's a bold statement, but it's a fair statement that we can make.

Keith Olander: At the same time so the consumer can draw back a little confidence to say we're doing both of those in a fair way, that we're supporting farmers to be viable economically and environmentally sustainable.

For Todd Stencel, a Mankato, Minnesota-area farmer, reducing tillage passes, one of the requirements to get certified, lowers input costs and creates a higher performing soil.

Todd Stencel: Why I do. I guess bottom line, the number one would be time savings. So, if Dad started it. I'm familiar with it. I grew up that way doing this practice of ridge till slash strip till the amount of labor savings and fuel savings is significant. I can get by with one hired man in the fall.

Todd Stencel: Okay. So, I, one of the things that will work really well for corn production if we start there, is banding the fertilizer. So, I try to get the fertilizer placed right directly below where I want to plant that seed. And with that fertilizer there, it's readily available and directly close to that seed with the root structure right on it.

Todd Stencel: And it just seems the corn responds very favorably.

To achieve certification, Stencel made adjustments to the tiles on the edges of his fields. He installed low velocity water quality inlets that slow the access to the tile once ponding occurs, reducing the amount of soil that is washed down the tile, and he keeps the trash from harvest on the field.

Todd Stencel: It was a fairly simple process. I inquired about it. I don't remember what year I'm in the year before I inquired about it through the NRC, US and our local soil and water got the paperwork, kind of contemplated it, and then with the help of the NRC, us was encouraged to apply for it and the local soil and water.

Todd Stencel: And on my particular farm, because of that ridge till and strip till I was already using, it was actually very simple to implement the different things they recommended for like the, the, the tile intakes. All I had to do is change a few of those, prove the paperwork on my current practices. And I was in.

Stencel also teaches farm business management at South Central College in nearby Mankato. Examining the financials of working farms confirms that small tweaks to farm practices can increase profitability.

Todd Stencel: So that means a full year production cycle. We need to see what that schedule F is, what it's going to look like we'll project. And the strength of the program is after we find their data, we can put it into a software called RankEm that's available through the University of Minnesota. That RankEm software then gives them a comparison benchmark against other farmers and we can see different metrics of their management level to see, for example, is our cost production high low, you know, where are the things, the little things that we can change on their farm to improve it?

Todd Stencel: And then we do that over and over again to try to refine, to say, for example, if fertility is an issue, how much as far as dollars per acre should we spend and what type of return should we expect from that investment.

Water Quality Certified farms tend to have more livestock than the average farm in Minnesota, which may require a higher level of management. Access to manure reduces input costs while also improving soil chemistry.

That practice of examining every dollar earned and spent on the farm and determining the unique best practices for each producer often improves the profitability compared to neighboring farms.

Keith Olander: I don't want anybody to say if I go get water quality certified, I'm going to make more money. I don't think that that's the case. I think it's always the idea that if I'm going to be a successful business, I got to think like a successful business.

Keith Olander: And certainly with water quality, as pointed out, as that, those people that are certified think like successful business owners, but that just comes back to this management of soils, the environment, and that falls back into my economics.

For Market to Market, I’m Peter Tubbs.

Next, the Market to Market report.

It was the heat and the humidity this week that blasted crops over several states, leaving a void of limited moisture to finish off a crop in the field, and in the trade. For the week, the nearby wheat contract lost 17 cents, while December corn subtracted a nickel. The soybean complex pressed higher on heat and export purchases with some technical assistance thrown in. The November contract added 35 cents on the week and December meal put on $26 per ton. December cotton expanded by $3.69 per hundredweight. Over in the dairy parlor, September Class Three milk futures strengthened 39 cents. The livestock market was mixed. October cattle improved $2.35. October feeders gained $3.28. And the October lean hog contract sold off $2.30. In the currency markets, the US dollar index rose 74 ticks. October crude oil declined 62 cents per barrel. COMEX gold expanded $22.90 per ounce. And the Goldman Sachs Commodity Index increased almost 6 points to settle at 583.20.

Yeager: Joining us now is Market Analyst Dan Hueber. Good to see you, Dan.

Hueber: Good to see you. Thanks for having me.

Yeager: Wheat has been troublesome. We've got a couple of questions that don't like the outlook of it. Do you?

Hueber: I think for the time being at least we've probably seen enough punishment to the downside. Granted, it doesn't have a lot of good news on its side either. There's no real issues around the world. At this point in time production wise we don't know what Australia or Argentina is going to look like here over the fall and winter months. But that said, there's not much of a friendly story and corn is really not far behind. Corn just does not have a good demand structure right now. So, the two work side by side.

Yeager: All right, I'm in domestic wheat production and I'm hearing what you just said. What do I do?

Hueber: Well, I think there's no reason to panic at this point in time. I think all of the markets -- granted, commodities tend to move in tandem with each other, not that we don't separate from time to time. Beans especially look like they have a little potential to rally here right now. Again, we don't know what these yield numbers are going to come in. But boy, if you end up trimming a half a bushel off of the nationwide bean yield right now it would put some life under the bean market. And I think that is going to support corn, which in turn is probably going to support wheat, runaway rallies certainly not, but at least better opportunities to sell than we have today.

Yeager: So, wheat needs friends.

Hueber: Wheat definitely needs friends.

Yeager: Corn this week had a lot of heat. But there is a concern that maybe this crop was ahead, this heat didn't matter. The market kind of maybe agreed with that sentiment. Do you?

Hueber: I think to a large extent, yeah. And again, heat was primarily from Iowa west, or I should say Illinois west, we had heat for three or four days in Illinois. But, far enough along probably not significant damage. Granted, it looks a little tougher here in Iowa than it does in Illinois. But then you go east, Indiana, Ohio, Michigan, Wisconsin, really the crops look beautiful there. Yes, Iowa is certainly the big one and Minnesota according to Pro Farmer at least is going to struggle this year. But that said, not enough to -- when you're talking about a 2.2, 2.3 billion bushel carryout, you can lose a couple hundred million bushels and it's not going to change the picture all that dramatically, particularly when demand is not there to begin with.

Yeager: USDA is calling for a yield, a bushel to acre of 175, the Crop Tour today number was 172. So, as you plan ahead, we look at maybe harvest lows that may enter into the picture in late August, September. Do you believe a low is in, in corn, in December?

Hueber: I believe a temporary low, yes. I think we have a base, you've taken December corn down to this $4.80 level when it has really floated around here for the last two to three weeks. That's pretty typical action for corn too when you're at a low ebb of trade. Granted, we still need a stimulus. Maybe that stimulus is a little better bean trade, maybe we see some export business. Mexico has been active, not unusually active, but active in our market here as of late. Again, are we talking anything more than a 10%, maybe a 20% rally? Probably not.

Yeager: What do you like about beans? You kind of tipped your hand a little bit there.

Hueber: Well, I don't know if I want to say I necessarily like what's going on in the bean market per se. But, that said, I think there is -- a bushel or two in corn doesn't really make a huge change within that supply and demand balance. A bushel in beans makes a huge difference. And I say, I think there's just enough concern about what happened on these last two to three weeks when they really should have been filling pods. Some of the farmers I've talked to in Illinois even say, the plants look phenomenal, they're tall, they're bushy, but there are just not the pods there. So, unless we saw some really late fill you're probably looking at average bean yields even for some of the best bean fields out there.

Yeager: Again, Pro Farmer numbers, they predict 49.7 after their research this week. USDA is still at 50.9. So, there is your half a bushel difference, a little more than that. So, if I'm looking at we're already flipping into next year for that deferred contract or if I'm looking ahead to harvest this year, what is a strategy for me right now given there's still a possibility of a bump?

Hueber: I would tend to say that farmers do tend, at least in my experience, that if we look at respectable prices at harvest time they'll tend to move beans off the combine more so than corn. There is more carry in the corn market to begin with, so if it's a question of how do I allocate space for storage it's probably going to go more so to the corn and with deferred sales. But, I think from where we stand anything higher I think you're going to see beans move off of the combine. And I think in both cases we have to keep in perspective that over the next 30 to 45 days we're going to have the largest supply we're going to have all year long. So, there's still going to be an ample amount of supply out there right now, which should really temper any kind of a runaway market.

Yeager: Yeah, I didn't hear anything about a harvest low there settling in for beans.

Hueber: Well, we might have seen that already. Maybe it was a summer low.

Yeager: Well, let's ask, you left out one word maybe because you knew this question was coming. James in Oklahoma asked us this week, he said, how much will a slipping Chinese economy affect grain prices? A billion plus people still have to eat, Dan.

Hueber: Certainly. The Chinese consumer just as a whole seems to be spending less and when you talk about deflation already in China, how can you have deflation when we've seen prices escalate for everything from fuel to housing or whatever the case may be? But I think you have a nation there not only are they spending less, demographically that country is truly a mess. It's an aging, aging population. Speaking from experience when you get older you tend to spend less, you tend to eat a little less, so your priorities shift along that same area. And that population is aging dramatically. Again, if you don't have the young people, the people truly with the appetite for everything, not just food but for goods and clothing and you name it, it tends to be pretty harmful to the economy.

Yeager: Moving to livestock, live cattle. Weather related market or packer back in control slowing down the line market?

Hueber: Well, it may be a combination of both. But certainly, the hot weather over the last week has slowed down gains. So, maybe we're having a little less tonnage potentially over the market here in the next few weeks. That said, what a phenomenal year in the cattle market. But we have just reached that point where I think the consumer, particularly as you move into the fall when we tend to cook outside less, a little less appetite for some hamburger there and we look at the price discrepancy between beef against pork against poultry you can see this demand really start to wane pretty rapidly in the beef market even with the lower numbers.

Yeager: Well, and prices if they do get out of control again, if we have this inflation train that Powell thinks that we're going to have, beef is usually one of those places where it shows up.

Hueber: Sure, sure. And again, I think we've been fortunate in the respect that as many issues as we've had within the economy and the worries about inflation, the employment has kind of been the balancing act there. And of course, that has been a major objective of the Fed is to slow down the growth in employment and if that's the case and you start seeing fewer people hired or people start to lose their positions you're going to tend to back away from the expensive treats at the grocery store as well.

Yeager: Talk about an aging population, that is part of that factor too that we haven't had in a while. Let's go to feeders then because there is a word, I wrote it down when you were talking about China, you talk about deflation, there could be the recession, but the word now in feeders is stagnation. Is that what you hear?

Hueber: Well, I think it certainly makes sense. If you're starting to see the fat market level off, peak out, even with lower feed grains it's going to be pretty difficult to sustain any higher prices on that feeder market right now. So yeah, I think when you look at the beef trade as a whole, the beef industry as a whole it's probably not a time to be a real bull.

Yeager: Is it time to cover feed needs with feeders right now?

Hueber: Short-term probably okay. There is probably, when it comes to corn usage, certainly I would say for the next 30 days, 45 days, would not hurt to have some coverage on for the upside. If you're looking over at the meal side of it, I keep hearing, granted the meal market performed extremely well here this week, but you keep hearing stories that meal is actually backing up at the plants, the hot weather not only affects the appetite for the animals, hogs and cattle both, but it also messes around with the crush a little bit as well. So yeah, I guess I wouldn't be overly aggressive on the meal. But on the same token, it doesn't hurt to have the next 30-day coverage on anyway.

Yeager: That didn't seem to be impacting the hog market. Or did it? Because we were lower on the week there.

Hueber: Lower on the week but tried to bounce back kind of late week. But hogs have enjoyed a pretty substantial rally over the last four to six weeks, so I think we're more in a corrective phase here right now. I don't believe the bull market is over. But we need to just wash a few of those longs out of there for the time being.

Yeager: Do you think the bears though are in control?

Hueber: Of hogs?

Yeager: Yeah.

Hueber: I don't believe so. I don't believe so. I think right now it's more of a corrective phase than it is anything of a massive peak and collapse to the downside.

Yeager: Final 30 seconds I have to go back to cotton for a minute because we I think today added a sixth consecutive day of gains. Is that a trend?

Hueber: I think substantial in the respect that cotton really didn't react much off of the last supply and demand report and it was really the only commodity that had actual positive news. So, I think this is finally coming to fruition. This takes us right up to some very key resistance. If we extend any higher next week then you're into really a whole new market.

Yeager: Guess what we're into? The end of the show.

Hueber: Oh no.

Yeager: Again, good to see you. Thank you, Dan.

Hueber: Thank you.

Yeager: Dan Hueber, everybody. Thank you. That will do it for our Analysis. We're going to put a pin in it here, continue our discussion about these markets, we have questions about basis, in our Market Plus segment. You can find both Analysis and Plus on our website of All of the resources I just mentioned, they are free. YouTube connects you to our full program, Market Plus and the MtoM podcast. When you subscribe and turn on notifications by clicking that little bell you will know before anyone else our work here is ready for you. Follow along at Next week, we look at the pending return of Congress and the focus coming back on the Farm Bill. 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.