Market to Market - April 26, 2024

Market to Market | Episode
Apr 26, 2024 | 27 min

On this edition of Market to Market ...

Connecting the dots from the dairy barn to the vet lab. Incentivizing farmers to protect a natural resource. And, commodity market analysis with Arlan Suderman.


Paul Yeager:  Coming up on Market to Market -  Connecting the dots from the dairy barn to the vet lab.  Incentivizing farmers to protect a natural resource.

And commodity market analysis with Arlan Suderman, next.

Announce: 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.


Announce: Family owned and operated for more than 60 years, Sukup manufacturing. As a full Service provider of grain handling, storage and drying equipment, helping farmers feed and fuel the world for over 45 years. 

Announce: Steiner Tractor Parts A shared your love of antique tractors, new parts for old tractors. Learn more at or 877-559-7887

Announce: 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.

Announce: 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 26 edition of Market to Market - the Weekly Journal of Rural America.”

Hello. I’m Paul Yeager. 

Stubborn can be defined as firmly resistant or persistent in doing something. 

Enter inflation into the discussion as at least a synonym for the term.   

The government’s preferred gauge of inflation, the PCE, added 0.3 percent in March, the same as the previous month’s reading. 

The year-over-year level was 2.7 percent, again above the Fed’s 2 percent target.

New home sales proved to be a bright spot in the housing market as the pace posted a 9 percent gain last month. Buyers are now turning attention to the new market as the existing listings are limited.

Orders for Items meant to last at least three years rose 2.6 percent in March according to the U.S. Census Bureau. When transportation is removed, the core added 0.2 percent.

High Path Avian Influenza or HPAI has ravaged millions of birds in the U.S. 

The emergence in dairy animals and humans generated headlines last month but a major breakthrough in determining what was happening may have come from our friends in the dairy parlor - the barn cat.

Peter Tubbs talks to a veterinarian who used her observations and communications with a college friend as key pieces to the puzzle.

Peter Tubbs:  The ongoing spread of High Path Avian Influenza in dairy cattle has been a puzzle for veterinarians to diagnose.

Dr. Barb Petersen of Amarillo, Texas, was featured on Market to Market in 2016. She saw early symptoms of H5N1 in some of the dairy herds she services earlier this year. But she and colleagues in Texas and New Mexico first pursued regular dairy illnesses as the cause of the symptoms. 

Dr. Barbara Petersen: So I got a call from a vet colleague, end of February. And the question was, are you seeing adult cows with pneumonia and or diarrhea? I said, no, I'm not. Let's talk through what's going on. We make a list of things we're going to try to rule in or rule out. So we worked on that list. And the following week I have a client that I worked together on with another veterinarian, and we had a lot of cows with mastitis, almost like a very thick, very yellow mastitis. That looks like colostrum, right. But these girls were not recently calved. They had been milking for a while. So we went down the mastitis rabbit hole together.” 

The illness in the herds was still a mystery until a worker noticed another clue.

Dr. Barbara Petersen: “Hey, I have a number of barn cats and half of them have died. And so then the alarm bells, you know, start going off into your herd because the dairy is close to that dairy. I had sampled birds that ended up being positive for H5N1. So still at this time, that wasn't that wasn't on my radar. It was like, gosh, there's got to be some type of toxicosis, right? Some type of toxin is maybe in the feed or in the water.”

Tissue and fluid samples from the dead cats were sent to labs for testing, and were negative for rabies. Then a veterinarian at Iowa State ran the samples for H5N1.

Dr. Barbara Petersen: “He said that the cats brains and their lungs were positive for Influenza A on PCR, and so was your milk. And I'm this is not connecting in my head at all. I said, What? Are you sure? What does that mean? And there are other folks at the same time reaching the same conclusion that weekend and early the next week. And so that, unfortunately, is the diagnosis of bird flu in cows for the first time in the United States.” 

Recent weeks have been spent treating and observing sick cows, and studying their path back to health.

Dr. Barbara Petersen: “Short term prognosis has been good, right? The herds that I care for and have helped to care for, it's been really positive. Cattle are not dying from this and just like us, when we get the flu right, your appetite goes down. So she starts to feel better. You know, she's going to eat again. And then after that, you know, her milk production will slowly start to come back. It's like we just need to figure out how it's transmitted because thankfully, there's there's states and there's places that don't have this right now and would like to keep it that way. And I would like that for their sake to keep it that way, too. But as far as active disease, for most of the folks that I get to work with that have had this that runs its course, you know, in about 2 to 3 weeks, and then after that, when she feels better, she eats more normally. And then after that, milk production resumes more slowly.” 

There are no approved antivirals for cattle on the market, so the current treatment for avian flu is fluids, rest, and time. This week, USDA called for mandatory testing before interstate movement of dairy cattle.  

Doctor Petersen credits dairies that have been willing to be the test cases to “work the problem” as being critical to solving the mystery.

Dr. Barbara Petersen: “It's finding folks that they're like, yes, I want to know the answer because this helps my neighbors, it helps the industry. This helps me. It's being fortunate to work with people that are willing to let you, quote unquote, work the problem.”

Data from infected herds will develop the protocols for treatment and prevention of the disease in the coming months.

For Market to Market, I’m Peter Tubbs.

Paul Yeager:  The U.S. Drought Monitor revealed improvement in drought-affected areas of the Southwest and Northern Plains along with the Midwest as spring moisture arrived. 

But in other parts of the country like Colorado, Montana and the Southern Plains short-term dryness and low streamflows are expanding. 

Water has two major discussion points in the country over conservation and quality.

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.

Peter Tubbs: 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. 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.”

Peter Tubbs: 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 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.”

Peter Tubbs: 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? 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. 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.”

Peter Tubbs: 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. 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.”

Peter Tubbs: 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. 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. And it just seems the corn responds very favorably.”

Peter Tubbs: 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 with the help of the NRC, us was encouraged to apply for it and the local soil and water. 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.”

Peter Tubbs: 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? 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.”

Peter Tubbs: 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. 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.

Voice: Next, the Market to Market Report: 

Paul Yeager: The funds were major influences on the trade as dryness expanded in many key growing regions. 

For the week …

The nearby wheat contract surged 53 cents or 10 percent higher and the May corn contract added 7 cents. 

Some China buying and early planting progress were factors in the soy complex. 

The May soybean contract improved 9 cents while May meal fell $3.70 per ton.

May cotton expanded by $1.38 per hundredweight. 

Over in the dairy parlor, May Class Three milk futures gained 21 cents.

The livestock market was mixed. June cattle improved $2.90. May feeders put on $6.70 and the May  lean hog contract lost $1.95. 

In the currency markets, the US dollar index decreased 7 ticks. 

June crude oil expanded $1.59 per barrel. 

COMEX gold dropped by $56.10 per ounce, and the Goldman Sachs Commodity Index was up nearly 8 points, to settle at 596.40.

Joining us now is regular market analyst Arlan Suderman. How are you doing, Arlan?

Arlan Suderman: Doing well. Good to be back on again once again.

Paul Yeager: You can smile with our first part of our conversation, the wheat country in the United States. I won't call it a victory lap, but it's certainly better than the alternative right now. I list a couple of factors. Is this all technical? Is this all the short scrambling? Is this a market that was just poised? Is this dryness or “D” all of the above?

Arlan Suderman: It's kind of all the above. We've been telling our customers for several months, be careful with the wheat market because we've got lots of wheat in the world, but we don't have a lot of quality milling wheat in the world. And if you take outside the Black Sea and outside the United States, the rest of the exporters supplies are among the tightest of the last 50 years as a percent of usage. But the market hasn't cared about that because the Black Sea is dumping a lot of cheap wheat on the market. They set the world price for cash wheat and they keep pushing prices lower, trying to generate revenue. Record exports coming out of Russia. So if you ever have a risk with that crop, then suddenly the narrative would change. And so the fund's built large, massive short positions, very unusual for them to carry those in the spring. We said, what if a headline causes them to want to uncover and unwind those positions? Who's going to take the other side of the trade? Because the North northern hemisphere farmers sold already, and that's not the new crop to sell yet. And so that's when we could get quite a move. And so that's what happened. We had back to back weeks of big drops in the central and southern plains condition of the hard run winter wheat crop. Europe's crop has been ratcheted down because of excessive wetness. And then you have several weeks in a row of hot, dry weather in southern Russia, eastern Ukraine, that continues to this day. And so suddenly the markets saying, saying we're at risk holding these big short positions, the southern Russian crop, it's still early. It could be saved with the rain next week, but that's not in the forecast. It's the forecast changes over the weekend. Then maybe done.

Paul Yeager: You'll see a change in that market. But let's see if we have a change in your answer to this question. Phil in Ontario asked us on Twitter or X this week. Wheat futures prices have been buoyant lately. Why is this, especially when you consider its persistent bearish global fundamentals?

Arlan Suderman: Yeah, and it's been because of those factors, in fact, that the funds had big short positions. If they weren't short, we wouldn't have seen much of a rally on the news. It would have been, Oh, let's wait and see what the weather does. We've got some farmers who got some real problems in the plains, but the market of 40 years I've watched these markets. They trade Russian weather more than they do plains weather.

Paul Yeager: If you are someone who holds wheat in a field, in a bean and a contract somewhere, are you taking advantage with some sales right now?

Arlan Suderman: I think you have to respect this rally with sales depending on how much you have left, simply because if the forecast changes in Russia, they're going to continue to sell a lot of cheap wheat. And no matter how short we are, they're going to set the world price.

Paul Yeager: Last week, Chris Robinson sat there and said we'd had the potential to pull the other markets along. It pulled corn early in the week. Then what happened?

Arlan Suderman: Well, the macro markets are helping here, too, with corn and soybeans going higher. The whole commodity complex starting to go higher. So that helped corn and soybeans go higher as well. But the big difference there, the farmer has a lot to sell, not only in the United States, but in Brazil, even more in Brazil. And their currency recently took a big hit, which means when they sell on Chicago board and their currency is weaker, that amplifies the conversion rate and gives them an even better price as a stimulus to sell.

Paul Yeager: But the farmer holding in this country hasn't changed. Why would the market respond to all this holding? 

Arlan Suderman: Well. it's because when you've got the corn and soybean prices with short covering, trying to lift, but the farmer in Brazil selling, they're offsetting that. So that limits the upside. And the other factor on corn is we've got a 2.1 billion bushel carryout and in soybeans north of 300 million bushel carry out. And so the market's not going to get as excited over. Maybe we need to continue to sustain this rally. They're more comfortable with their short positions.

Paul Yeager: Let's look at the deferred contract for a moment, because as planters rolled a whole bunch of days this week, they're going to be out for a couple of days. Big rain system. Does the market have any incentive to change the pattern there in that December contract?

Arlan Suderman: Here's how well the Chicago traders are going to interpret the rains this weekend. I've had farmers say this is excessive rain, but they're going to say it's early enough. We're filling the soil profiles. And as long as Mae isn't excessively wet, this is going to help our yields this summer. And we already have a 2.1 billion bushel carryout. Now, it may turn successively wet, we all remember 2019, then it's a different story. But so far that's not in the models.

Paul Yeager: In soybeans, there's this sentiment that, oh, we've planted too fast. Do you buy that?

Arlan Suderman: We've got a lot of parts of the Midwest who are discovering earlier planted soybeans. As long as frost doesn't get them it is giving them a better yield bump than earlier planted corn. And so we've got a lot of fellows who are switching to planting soybeans first and then corn.

Paul Yeager: Putting your agronomy hat back on.

Arlan Suderman: Yeah, I missed some of those days of being out standing in my field.

Paul Yeager: Is the same scenario. That's a good line. I always love that line. Is the soybean market did also come along with wheat for a while. Is it the same factor answer in corn that it wasn't corn with the holding? Is that still a factor?

Arlan Suderman: There is. Farmers in Brazil have a tremendous number of soybeans. The amount of soybeans are behind in their selling. And so they're selling through our currency exchange rates, factoring in that as well. So that's the cap. It was soybeans. We're seeing even more pressure because our exports are really dropping off. Now, the only people where selling soybeans to those who, we have a freight advantage, like Mexico. Everyone else. For China, for example, you know, we're talking about better than a dollar a bushel cheaper to off board Brazilian beans in the Chinese ports than US soybeans.

Paul Yeager: But there were reports this week of maybe there were two cargoes to 20 cargoes sold to China. Is it somewhere in the middle or has the market just taken? A Yeah, I'll believe it when I see it approach to Chinese sales. 

Arlan Suderman: Right now, most of the sales to China now are for new crop, which they do anyway. They're not going to do as much of that in the long run as what they have been because they know Brazil's got a big crop, but they're still going to hedge your bets and they're going to buy some from us. They also know they can always roll those if they don't need them, So they'll have them have it in the past, as Brazil would run out before our harvest time. So they want to have some books or some old crop, but they have very little. In fact, as I looked at their bookings this week, if you look from June through August, in fact - May through August, there are zero soybeans booked right now for shipments from United States to China through that period. They're totally they're buying from Brazil because Brazil beans all the way through August are so much cheaper than US beans.

Paul Yeager: That's a discussion. I think I need to keep going. And plus, there's a great follow up in there. We'll tease it that way. Let's move to livestock. Just when you thought the pause was in, we found some more highs. We found some more run up live cattle. Is this still a cash led market into the futures?

Arlan Suderman: But the big story is the bird flu. And that got the funds liquidating their positions because it's the unknown factor, especially when USDA said dairy cows cross state line have to be tested. That sets a precedent. Now, when and if we find a beef animal or whatever it may be, a cow, a heifer steer or whatever that test positive. Does that mean we're going to restrict movement in the cattle industry is so dependent about moving across state lines so the funds not knowing wanted to liquidate. They've done that. And so this week when cash came in stronger, particularly in the northern feedlot, built up a couple of dollars from the previous week that helped support late in the week.

Paul Yeager: Feeder still becomes an issue of supply. That does talk to a producer this week in Michigan who was like they're still hard to find. That is still the story everywhere right?

Arlan Suderman: It is. And that's going to get tighter. We saw at the last cattle and feed report where we're finally starting to tighten things up now. So as we get toward fall, those supplies are going to be tighter and we're just starting now to hold back some heifers, just starting to rebuild the breeding herd. That's going to take several years.

Paul Yeager: I know you mentioned the influence on cattle, but do you also see any spillover to the feeder market and that just because of its beef in general?

Arlan Suderman: Yeah, because it's beef in general, the feeder market has been trading it as well. That's been a hurt for it.

Paul Yeager: Any impact on the hog market like that?

Arlan Suderman: We've seen some of that beef demand and it's unrelated to that story, but we've started to see some of that beef demand come down. The value chain toward pork and pork demand has been very solid. We've been producing enough to meet it, but the demand has been solid.

Paul Yeager: And I wrote down demand is the story there. So let's go a little bit back to one of your comments about China. Have they been a buyer in this market of US pork?

Arlan Suderman: They've been buying some specialty meats, but no, they're still trying to trim back their hog herd. They still say that they have too many in breeding animals. They're still trying to turn back. Their margins are very narrow. They're only buying some of the specialty meats are pork. Demand has been strong to other markets.

Paul Yeager: In the final few seconds here. The dollar for a moment, I noticed the movement has been much smaller, not necessarily lower, but less. Has that had any influence in the big commodities?

Arlan Suderman: It has is a real significance in those commodities here where we have a lot of competition. Wheat is an example. One of those places, even though we just had this big rally. But the meat markets that affects as well.

Paul Yeager: Do you see the dollar continuing stronger, weaker?

Arlan Suderman: Our problem right now is the euro can't go up because of their economy, so therefore the dollar can't go down. The other thing is people are borrowing to carry trade, borrowing cheap money in Japan, converting it to invest in the United States. That keeps demand for the dollar high.

Paul Yeager: And that keeps demand in our time. Thanks, Arlan.

Arlan Suderman: Thank you.

Paul Yeager:  We are going to pause this analysis, continue our discussion about these markets in our Market to Market Plus segment. You can find both analysis and plus on our website of, When you head to the field, take us along for the ride. Our three podcasts are perfect companion is between seed or spray refills. Market Analysis, Market Plus and the MTOM Show are available each week wherever you get your podcasts. Next week discussing the challenges and stressors of agriculture. Thank you so much for watching. Have a great week. 

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

Announce: 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.


Announce: Family owned and operated for more than 60 years, Sukup manufacturing. As a full Service provider of grain handling, storage and drying equipment, helping farmers feed and fuel the world for over 45 years. 

Announce: Steiner Tractor Parts A shared your love of antique tractors, new parts for old tractors. Learn more at or 877-559-7887

Announce: 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.

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