Market to Market - April 5, 2024

Market to Market | Episode
Apr 5, 2024 | 27 min

On this edition of Market to Market ...

HPAI makes the leap to dairy cattle and humans. An eventful first week of April weather-wise across much of the U.S. The conditions leading to the spread of wild hogs. And, commodity market analysis with Kristi Van Ahn-Kjeseth.


Coming up on Market to Market - 

HPAI makes the leap to dairy cattle in humans. An eventful first week of April weather wise across much of the U.S. The conditions leading to the spread of wild hogs. And commodity market analysis with Kristi Van Ahn Kjeseth, 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.


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


This is the Friday, April 5th edition of Market to Market, the Weekly Journal of Rural America.

Hello. I’m Paul Yeager.

Sometimes it only takes one - a single Federal Reserve Bank governor hinted Thursday on holding off rate cuts which sent the stock market sharply lower. Then came Friday.

The job market continued down the expansion path, adding more than 300 thousand jobs in March, well above expectations. 

The growth in positions pushed the unemployment rate down to 3.8 percent. March was the 26th consecutive month that unemployment has remained below 4 percent, the longest streak since the 1960’s.

New jobless claims climbed to a nine-week high of two hundred twenty-one thousand, which is still very low historically.

The early days of a crisis are often driven by rumor, hearsay and conjecture. This week’s announcement of the confirmation of H5N1 Avian flu in a Texas dairy herd, followed this same path. A webinar held by the National Milk Producers Federation on Monday drew over a thousand attendees searching for information and possible solutions. But answers may be slow to develop as researchers study the outbreak.

Peter Tubbs reports on the evolving situation.

Analysis of H5N1 avian flu samples have confirmed the infection has passed from birds to dairy cattle for the first time.

The H5N1 avian flu infection has spread to herds in multiple states as a result of shipping animals between farms.

Jamie Jonker, Chief Science Officer, National Dairy Producers Federation: “Well the landscape in the dairy sector has changed. There are now a number of farms in multiple states that have had high, highly pathogenic avian influenza diagnosed in one or more cows.  Before those diagnostics came out, we did not consider that dairy cattle could become infected with highly pathogenic avian influenza.”

The reported cases of H5N1 in dairy cattle are believed to be the first occurrence globally.

The Center for Disease Control has also confirmed the infection of at least one farmworker who had close contact with infected animals.

Symptoms are reduced feed intake and dramatically lowered milk production, changes in manure consistency, and general fatigue.

Infected animals appear to recover in 7-10 days. A few dairy cattle have stopped milk production after recovery, but it is unknown if the condition is temporary or permanent.

Rather than the respiratory distress symptoms in birds and poultry, H5N1 appears to cause an illness similar to mastitis in roughly 10 percent of an affected herd. There have been no observed deaths of dairy cattle as a result of H5N1.

Dairy producers are encouraged to segregate animals with symptoms of H5N1, and to quarantine animals new to the farm for a month.

The H5N1 virus has been observed in raw milk from infected animals, but the virus does not survive pasteurization. Any milk from infected animals is destroyed.

Jamie Jonker, Chief Science Officer, National Dairy Producers Federation: “A lot of this falls back on biosecurity.  And so, you know, we're still learning about the roots of transmission. So, biosecurity is important. So, when you have people that are coming on to the farm, wash your boots coming in, wash your boots going out. If a milk truck driver is going to multiple farms, we want them to not be part of a potential spread as well.”

Experts hope a cautious, methodical approach to the response to the outbreak will be the best plan in the long term.

Jamie Jonker, Chief Science Officer, National Dairy Producers Federation: “This is probably not going to go away in a couple of days. But that's why I think we need to make sure we're taking these measured approaches and not overstepping into areas where we just don't have the information yet.”

In related news, the nation's largest egg producer closed a plant in Texas after H5N1 avian flu was found in its supply chain. Cal-Maine Foods announced that nearly two million poultry were destroyed at an egg facility in West Texas.

For Market to market, I’m Peter Tubbs

The Drought Monitor reflected an increase in weekend moisture with a nearly one-point improvement. Then came Tuesday - that’s the Monitor’s data cutoff and when a major storm complex roared across much of the Mississippi River to the east.

John Torpy has our weather wrap.

The early April storm was no joke across much of the eastern United States as every state east of I-35 had some type of weather report generated this week.

The biggest system was a Nor’easter which barreled up the coast slamming Boston with high winds and rain - generating intense waves along the shoreline.

Further north in Maine, snow blowers returned for the spring show of winter. 

Downed power lines in New Hampshire were widespread. More than 700,000 homes and businesses were without power in the Northeast.

Between 5 to 6 inches of heavy, wet snow fell in Madison, Wisconsin and continued into Upper Michigan.

Presumed tornadoes tore through much of the South - just outside of Atlanta in Conyers, Georgia heavy roof damage was visible from the air along with large debris fields. Other parts of Oklahoma, West Virginia and Ohio also had damage.

The weekly precip map was a dark green color from eastern Iowa to the Atlantic delaying spring field work and hampering grain movement efforts.

For Market to Market, I’m John Torpy.

Wild hogs have been found in several U.S. states and the damage can be severe. The animals that date back to DeSoto need some water, will eat almost anything from bugs, pecans or young wildlife - the population is exploding. Aaron Sumrall is in charge of outreach, education and research for Pig Brig a company that makes a live trap. As part of the MtoM podcast, we discuss non-native exotic animal feral swine in this week’s Cover Story.

Aaron Sumrall: It is. It's something that again, too. I think that whenever we start trying to put our thumb on really when it got bad for where I was that was probably in the early 80s. Up until that point, I mean, in a lot of the rural parts of the south, I mean all over the United States and those rural parts. There was still a lot of folks that use that livestock species even though it was an exotic wildlife species. They depended on it as a protein source and heavily manage that population just for that and then you start to look at the mid-80s, the early 80s, things like that the economy shifted a little bit, there was more people that weren't coming back to the farm after they graduated high school or college or whatever the case may be. And as that generation of people aged out to the point where they couldn't go out in the woods and the brambles, the briar patch is and look for these pigs, we took the foot off the management gas pedal for a pig, and reproduction didn't stop. I mean, so they just exploded in population. And, and now we've got the, the bomb that we have, and quickly moving to wherever basically wherever they want to go.

Yeager: You mentioned the population explosion, the lack of population control hunting. For those things, it wasn't like a policy change that you no longer can do this, therefore this thing grows, this was just nature taking off?

Sumrall: Right. Because the pig, I mean, a wild pig that what we have in the States is considered a non-native exotics. So, with that, there's no game laws that really govern that, that animal as far as hunting seasons, anything like that. So basically, for all practical purposes, where the where the hooves of that animal stand, whatever property that that those feet are at, that's who owns that exotic animal, if they move from my property to yours, now, they're your issue. They're your exotic animal, there's no ownership. So, there's really not a lot of legislation that was in place that would hinder a lot of the management, but early on, yeah, early on, we it was managed heavily with firearm, and there were just a lot of people on the landscape with firearms that were looking for that protein source. And in the last 30, 40, 45 years or so, there's been a substantial decrease in the number of people that are out there on that landscape. And it's gotten to the point where it's not subsistence hunting to look for that protein source. It's hobby or recreational hunting. And we know just through libraries of research, that there's no way that we're going to shoot our way out of a pig problem. So, it's going to have to be something of an adaptive strategy, integrated at a specific time based on a prescription for each individual property.  We took the foot off the gas pedal of the management on that species, and it's just, unbelievably I mean, it's a fascinating species. And I don't say that with a passionate thought, in my mind, as far as good, they are fascinating in the fact that they are unbelievably reproductively efficient, they are adaptive to any situation that you put them in. And they're extraordinarily intelligent. So, they're the, basically the bottom, if you wanted to say of an exotic species that can occupy anything that you've been anywhere you put them.

Yeager: This thing can adapt. And, and when and when you saying the out migration off the farm. So basically, the eyes and ears of people that you know this boar, I'm going to take care of this thing tonight, when there's no one to see that it just one becomes two becomes four, it's compound interest of problems.

Sumrall: Yes, very, very quickly. And now we're seeing it too. And you look at the land ownership trends across the country, everyone likes the opportunity to own land, there's just unbelievable benefits there of owning your own land. And one of the things that we will see that was in that expansion of pig populations across the country, is that the number one limiting factor for pigs is water. Whenever you look at those harsh environments, pigs can go into those areas and flip over enough rocks to find enough grubs and beetles and bugs, and so forth and so on just to exist until they wait for those plentiful resource times of the year. And they'll crank out a litter of pigs in a very short period of time. So that fragmentation is a big issue.

Yeager: So not only can they reproduce quickly, they'll eat anything that can operate on minimal water. So yes, a lake or river, a watering tank provides a problem. We know they're detrimental to crops, are they detrimental to other livestock? You mentioned the cow that might be between two sources. What's the nature battle there?

Sumrall: Well, when we start looking at native wildlife populations it is pretty catastrophic. Because I mean, anywhere you go around the world, if it's a native population there, there are other native species there to control that number. What I mean is basically that you've got the coyotes here to control rabbits, you've got the excessive deer numbers or so forth and so on. There's no natural predator for the pig. So basically, whenever we get to the point where pigs weaned. And at 35-40 pounds, there is not a natural predator that's native to North America that's going to see that pig as a food source to the capacity of reducing numbers, it's just not going to happen. / So, in the challenges that pigs pose on existing wildlife is that we know and again to going back to just libraries of research out there that shows that pigs are just unbelievably catastrophic on ground nesting birds like quail and turkeys, you can decimate a population of those birds species in a very short period of time, their life expectancy, your life range is not that long. And it doesn't take very many egg clutches to be lost before you devastate that population.

Yeager: The full MtoM episode is available now.

Next, the Market to Market report.

Yeager: Flat export demand kept the lid on grains in sideways trading as last week’s report is in the rear view. For the week, the nearby wheat contract added 7 cents and the May corn contract lost 8 cents. Despite good demand for meal, fuzzy signs from China kept beans neutral. The May soybean contract lost 7 cents while May meal fell $4.60 per ton. May cotton shrank by $5.14 per hundredweight. Over in the dairy parlor, May Class Three milk futures fell 29 cents. The livestock market was mixed. June cattle dropped $8.20. May feeders cut $10.52. And the May lean hog contract found $5.05. In the currency markets, the US dollar index lost 17 ticks. May crude oil added $4.03 per barrel. COMEX gold rose $103.60 per ounce. And the Goldman Sachs Commodity Index was up nearly 27 points to settle at 599.90. Joining us now is regular market analyst Kristi Van Ahn Kjeseth. Hey. How are you doing?

Van Ahn Kjeseth: Good. How are you?

Yeager: You know, I wish we had big reports to talk about. But in a way we kind of do.

Van Ahn Kjeseth: Right.

Yeager: When you look back at last week's report, did the market digest them quicker than you anticipated? Or did they just shrug their shoulders and we just made a whole big to do about nothing last week?

Van Ahn Kjeseth: Yeah, so I thought you were going to actually extend off of corn. Corn got some friendly numbers out of that report. And so, I thought you would extend it off and then we got into this week and there was just enough other news that I think the market was like, oh we'll deal with this later, type of a thing.

Yeager: It's always that we look forward to something and then it is digested and we move on. So, when you look at wheat, we're kind of dealing with some of the same scenarios, we're always dealing with Russia, we don't know what is going to happen in Europe, we're dealing with dry conditions. But we did have some U.S. news develop this week and we also had the different markets were trading in different directions. As a generality, where is wheat headed right now?

Van Ahn Kjeseth: Yeah, I think that's probably one of the aspects I'm most friendly about out of this week was wheat and the fact is that you were able to closer higher and it just felt like it has been a struggle fest for this market to get up and get going. I think there's enough dynamics happening around the world that you're starting to see this buying come back in. And the old saying is, if you really want to see a bull rally, it does need to be led by wheat. And so, fingers crossed that we can see something build off of this momentum.

Yeager: I guess I'll ask you in corn in a minute. But can wheat pull others along for the ride?

Van Ahn Kjeseth: Oh yeah, wheat is like that annoying friend that just likes to take everyone either up or down with them. And so, I do think that it can be the leader, but it can also be the thorn in corn's side. And I think that is what we've seen leading up to this report last Thursday is that wheat was consistently just not able to follow through on a rally and it just seemed like it was pulling corn down with it when it started to flip to red.

Yeager: As you look at wheat moving ahead, do you have a range that you like?

Van Ahn Kjeseth: For the most part I'd just like to see actual chart action that you can actually put some extensions off of it. As of now, you really have not opened up any top side. So, I don't want to get too excited about it, but it would be nice to see some follow through next week and then you'll start to generate some price points to the top side that you can say hey, I'm looking forward to this or I'm looking at a 38% retracement line. We're just not quite there yet.

Yeager: When you look at the corn market then, as we look at, again, the annoying friend, that's what I was writing down, with wheat. But you look at this old crop, it still seems we're sitting on a ridiculous amount of grain on the farm. Nothing seemed to prompt the sales this week, did it?

Van Ahn Kjeseth: You mean like almost a billion bushel more corn on hand than a year ago, that type of thing? Yeah, there's a lot of corn around. So, you did get friendly numbers. So, when you talk about the numbers, acre number no doubt out of the bottom end of the range of expectations. We use the most corn in this first quarter period from Dec to the end of Feb, we use the most corn on record here. And so that is a favorable aspect. And I think that was probably one of those things that you took home over the weekend and then came into the week and then all of a sudden you're talking about bird flu and maybe feed usage and I feel like that feed usage was what gave us the great usage in the first chunk. And now we're saying, could that decrease? So, I think there was that aspect that took it away. But overall, when you look at corn to be able to see it make some price points, I think it can get there. The problem is they're really shrunk up to see those price points, you're talking $4.54 for May corn, and you're right, there's a lot of grain in farmers' hands. I think it's 24% more year over year. The nice thing is that you actually saw the end users, the elevators, the off-farm storage decrease year over year. And so that is telling me that the grain is getting there, it's getting used and getting out, that hopefully on the cash side of things basis might remain strong. And that's what we've seen lately is that there has been a basis push for corn.

Yeager: As we look at December, the acreage number there is a little bit of it seemed like Monday, Tuesday had a no really, what's going to happen? People weren't believing some of the numbers. But we also didn't have a good early, that temptation to plant before the insurance deadline here in parts of the Midwest. So, when you look at that deferred crop right now, do you think anybody has changed their minds since last Thursday?

Van Ahn Kjeseth: I don't believe that number. But the good thing is we have that number to trade off of until June. So, it's that same situation, you might not believe it but that is the number we're going to use, that's the number they're going to use in the May report, which is also great that we're going to be using those lower acres. The thing is, you did have a lot of people talking about starting early and this pushed it off. I didn't see anyone rolling any field work on my way down this morning. And so, you did see that pushed off. But the fact is, we're dry in so many areas that I don't think it matters. I think you're looking at an extended forecast for the next two weeks that looks hot and dry for a lot of areas. And to be honest, we got a lot of moisture over this last little bit and I don't have anyone telling me that they're wet. And so, that is problematic to me that you're still going to be able to get an aggressive early start for planting.

Yeager: Well, that's '24, let's talk '25 real quick. We had a question. Jeff in North Dakota wanted to know, should we be considering any December '25 corn sales at some point?

Van Ahn Kjeseth: Yeah, I love this question and I think it's a great one. I am a big believer in looking at '25 corn and saying hey, we're really hovering around this area, we found support at $4.80. If we get to $5.00, I do think it should be done. Even right now, if somebody wanted to make some sales, I have no problem with it. Also, if you look, the timeframe to get us out to '25, it gives us a lot of option volatility, which ends up giving some good accumulators. So, if that's your jam to go to the elevator or an outside source and be doing an accumulator through the elevator, you're getting a lot of premium on top of that '25. So, I really like going out there and getting a start on it.

Yeager: Can you smile talking about soybeans?

Van Ahn Kjeseth: Well, I mean, I could sleep. But it is a little bit when you look at soybeans they're just not getting anywhere. It seems like both May and November want to get up to $12 and then they fade back off and they get back up there and it's just we cannot break through there. If we break through there, there's some gaps about 40 cents higher that I do think we'll be able to get. So, I think the writing is on the wall. I also look at soybeans as saying, hey they're in sleeper mode. You typically say hey, corn didn't get the acres so you automatically think beans got the acres. We didn't see that. We saw that there just was a lack of acres. So, if we come in here and we have kind of a slower start or you look at it and also the extended forecast, and I'm not talking two weeks out, I'm talking the summer forecast, looks like a not so ideal situation for soybeans. It looks to get really hot and dry in that key timeframe for beans. So, I think beans could be that sleeper mode.

Yeager: Do you also think sleeper for the deferred, the November contract too?

Van Ahn Kjeseth: Yeah, that's mostly what I'm talking about.

Yeager: So, does demand come into this factor at all? We kind of alluded to it in the open talking about China's fuzziness. We don't really know what their intentions are for a lot of countries.

Van Ahn Kjeseth: Yeah, so if we look back and we talk about how disastrous it was during the trade war era, that's where we're at right now for exports. So, a lot of people aren't talking about that. We know that exports are down but they're that low. And so, I think if you can look at it and say exports were this level during the trade war and we're able to do it, I think you're looking at it and saying, we should be able to keep a decent amount, this should be the bottom end of the range for exports. The nice thing is moving forward we continue to hear these favorable stories about crush, about the want for renewable diesel, the desire, the plants coming up, and we're not going to see these plants come up and just run half capacity, they're going to get going when they want to go.

Yeager: Livestock I have to move to because that was a dramatic pull back in live cattle and in feeders. is that all tied to this flu?

Van Ahn Kjeseth: Not necessarily. I think the writing was on the wall when you looked at it. Weights are really heavy right now in cattle. So, I think that was starting to creep and get talked about a little bit more that we obviously know the supply story is tight, the inventory is tight, but all of a sudden, our weights are over 20 pounds more year over year, five pounds more than they were a month ago. And you're like, what is going on here? So, I think that was the tip and then we got this story and it really just brought the sellers. We have to remember where our managed money is as well. So, I think they were bailing on the contracts.

Yeager: But did hogs benefit though?

Van Ahn Kjeseth: Yeah, I think you're looking at consumer sentiment. Whether or not you agree with everything that is happening with the flu, whether or not we know that consumption, it's not going to affect consumption, but when you're hearing that story on the nightly news, some people are going to be like, I'm out, I'm not going to be buying that product for a while. We have not heard about anything for our pork. And so, the general sentiment is that you could see the demand shift somewhat from beef consumption to pork consumption coming into grilling season and I think that is helping the pork market.

Yeager: And we don't necessarily discuss poultry on a regular basis here, but that also there has to be concern in poultry states too.

Van Ahn Kjeseth: Oh yeah, and so you're all looking at it and you're saying, which one hasn't brought up to the subject, which one hasn't been brought into the bird flu story? And that is pork. So, I think you're looking at not only the switch from beef to pork but also the switch from chicken and poultry over to pork as well.

Yeager: All right, lump them all together, livestock and -- do you see this as a temporary thing? Is this a pause and we're going to go back higher? And I guess I ask the reverse for hogs.

Van Ahn Kjeseth: Yeah, so on the cattle market I think actually you could be looking at something that ends up being friendly, eventually this story works its way through. We stop talking about it on the nightly news, we stop seeing the headlines, people are going to stop selling it. And then you look at it and we're still at tight inventory, the cash trade has softened but it's still favorable. So, I think that eventually you are going to be able to build out of this. We are just at the first price count to the downside for lives, feeders a little bit past that. But when you look at hogs --

Yeager: And I'll have to get your hog take in Market Plus. Sorry, I shouldn't have asked five questions. Thanks, Kristi. See ya. Kristi Van Ahn Kjeseth, appreciate your time. And we are going to pause the Analysis and continue our discussion about these markets in our Market Plus segment. You can find both Analysis and Plus on our website of Instagram season is kicking into gear as plant '24 gets ready to roll. We will post some of our own images and share your best work on our feed of MarketToMarketShow. Follow along today. Next week, growing resistance in pet antibiotics. 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.


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.