Market to Market - May 9, 2025

[Paul Yeager] Coming up on Market to Market -

Looking for dollars and sense in the agricultural budget as the head of USDA goes to Capitol Hill. 

Growing grains and markets. 

And commodity market analysis with Mark Gold. Next.

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This is the Friday, May 9, 2025 edition of Market to Market - the Weekly Journal of Rural America.

Hello. I’m Paul Yeager.  

The fabric of this week’s report includes the common threads of tariffs and trade. 

The Federal Reserve decided on a holding pattern for the key interest rate citing tariff uncertainty. 

The U.S. and Britain announced a trade deal that maintains an overall 10 percent tariff but agreed to pull back levies on beef, ethanol and steel.

There is potential for a bold tenor to weave its way into talks between the U.S. and China as trade delegations are scheduled to meet in Geneva this weekend. 

 Then there’s the federal budget with spending on government programs involving food and fiber. 

Peter Tubbs looks at the items under the hot lights of the House committee room.

This week, Secretary of Agriculture Brooke Rollins appeared before the House Appropriation Committee to discuss the spending priorities of the USDA. 

Local food policies and rectifying California’s Prop 12 law were two topics of the hearing. 

[Rep. Marie Gluesenkamp Perez] (D-WA) And I think what I hear is that why is it so difficult for me to just sell school food to the school, my smaller schools, they can't go through the regulatory, burden of of getting in those programs. what my farmers want is guaranteed market access. They want to be able to know that they can grow real food and bring it to our schools.

[Secretary Brooke Rollins] (USDA) I agree, I agree with that really quickly though, on the local food, because I think it's important that when that money was pulled back, your state of Washington has 7 million of $11 million left in that fund. And so part of the reason that that was really became a conversation piece and a part of the decision making is because many of the states not mean, but many of the states had so much money left, they couldn't spend it quickly enough. And so why we're looking at the $405 million a day we're spending in nutrition just from USDA. There's got to be a better way to balance the taxpayer interest with the interest that you just outlined. So I look forward to working on that.

[Rep. Ashley Hinson] (R-IA) You talk about some of the consequences for our farmers and producers if policies like this that, you know, are really state by state really start to flow down and impact interstate commerce issues.

[Rollins] I think it's really important. And no one is a bigger believer in federalism and the 10th Amendment and allowing the blue states and the red states and the purple states to be the laboratories of democracy. I think that's one of the geniuses of our Founding Fathers vision when they wrote the Constitution. But when a state like California or other states passes laws that have significant impact outside of their state border, then that is not sustainable. And specific to prop 12, we have understood that. We see it. I think it's pretty bipartisan, maybe not 100%, but very bipartisan across both sides of the aisle. That that is not, it's just not sustainable. So having a a federal approach to that, ensuring that we're protecting our pork producers, especially some of our other livestock producers underneath the regime of prop 12, is is important. So we'll keep working on that together. And I really look forward to it.

For Market to Market, I’m Peter Tubbs

[Yeager] If you want something done right, do it yourself. Farmers and ranchers have long held that belief and at times it’s easier said than done. Innovation can come out of necessity or resourcefulness.  When it comes to finding new markets, sometimes closer to home may be the answer to your challenge. Peter Tubbs looks at this transformation for one midwestern grain producer. This is our Cover Story. 

[Peter Tubbs] In 2015, Harold Wilken had a problem - he was farming 700 acres of organic grains, but was trucking it hundreds of miles from his eastern Illinois operation for use as animal feed.

[Harold Wilken] (Janie’s Mill) I was loading out a semi load of wheat to go to Lackawanna, New York for chicken feed, and I thought, you know, that's really kind of stupid. There's 10 million people in the Chicago food shed, and I know some of them eat bread. So then I started thinking about milling flour.

[Tubbs] Wilken had been working in the organic space for 10 years selling the output from his Janie’s Farm. He knew there were no local mills to process his grain.

[Wilken]  Well, so I went to my banker, and he had seen, he had seen that organic was working. And you go, you know, we could go closer to the, you know, the consumer and, you know, he said, well, what kind of a market you got? Well, not much.

[Tubbs] In 2017, Wilken opened Janie’s Mill and began looking for customers. The mill, like the farm operation, was named in honor of his daughter Janie who lost her life in a car accident in 2001.

Their first flour buyer was Ellen King, who was located two hours to the north in Evanston, Illinois. King, who’d opened her bakery Hewn in 2013, had been  sourcing flour from other Midwestern producers but needed a higher volume of flour.

[Ellen King] (Owner, Hewn)  And so when Harold came in, I said, you produce it, you grow it, mill it, and we'll buy as much as you can produce for us. And so it was kind of a year collaborative work of going back and forth with him to,

[Tubbs] The relationship went beyond just buyer and seller. As Wilken tuned the mill, King tested different grinds for suitability in breads and pastries. 

[King] Once we kind of perfected a flour that worked for our bread that maybe was like 95 percent whole kernel flour with 5 percent of the bran and germ sifted out of it. So it was really almost 100 percent whole wheat.

[Tubbs] Eighty percent of the flour used at Hewn is sourced from Midwestern growers, and is primarily baked into loaves of bread.

After mixing, dough spends hours rising and then is kneaded by hand. The baking qualities of stone milled flour change through the year;  moisture content drops, and protein levels shift slightly. 

[King] We actually rely on the skills of our bakers. So it takes about a year for a baker to come and work at the bakery to really understand what we're looking for.

[Tubbs] Milling grain using stone millstones rather than steel rollers leaves most of the germ and bran in the finished flour, producing a stronger flavor. Spinning at 300 rpm, the millstones tear the grain into a powder. A series of screens separates a percentage of the bran and germ out to create the desired texture of flour. The mill runs seven days a week and has added an overnight shift to keep up with demand. 

Traceability of the product is important to Wilken’s customers. Janie’s Mill can track a bag of flour to the batch when it was milled, to the bin where it was stored, and to the field where it was grown.

Wilken began transitioning the farm to organic in 2005, and today works 3,000 acres. The specialization shields the farm from the swings of the conventional grain markets. But organic farming has its own challenges.

[Ross Wilken, Janie’s Mill] The biggest hurdle in organics is just figuring out how to, - basically rethinking everything you've done and figuring out how to control weeds mechanically and working with the soil to adapt and, and, do things the natural way.

[Harold Wilken, Janie’s Mill] But yeah, that was quite a time, you know, kind of thing. But, but fortunately, you know, the consumer wants clean grain, clean flour, you know, and once it's stone milled. And so we're offering a product that not very many people do.

[Tubbs] Wheat is grown on only 3 percent of Illinois’ 22 million acres of farm ground, and organic wheat is only an estimated 7,000 acres across the state. According to data from the Artisan Grain Collaborative, many of the members of the Collaborative struggle to source all of the bushels of food-grade wheat, rye and barley they wish to buy.

[Ross Wilken]  Dad's always been the big picture guy. Loves, loves, loves chatting with people and loves doing the mill side of things with with going out and meet new customers. And I've always been kind of nitty gritty in the background. And so I've, I've absolutely loved being the, the, the business side on the back side. And so we, we work really well together. And so I've been blessed, find a perfect business partner in that, in that regard.

[Tubbs] The mail order operation at Janie’s Mill mail saw a large bump in sales during the COVID-19 pandemic. Yet sales have continued to grow since lockdowns have been lifted. Part of that growth comes from one-on-one interactions with customers. Harold makes deliveries to many of the mill’s commercial clients himself. 

[Harold Wilken] Well, so it started out that when we started the mill, I wanted to deliver myself so I could get the feedback from the customers. But now it is become. They're my friends. You know, they appreciate what we're doing. They come visit us at the mill. You know? Everyone smile. There's a loaf of bread. Gets stuck in my hand when I leave a bakery. (edit) And they really love the idea that I come to their back door, bring them the flour from the grain I raise, and sometimes I don't have time. We send out other people, but it really is a relationship. This is all about how you treat people and how you take care of one another. It’s a relationship.

[Tubbs] For Market to Market, I’m Peter Tubbs.

[Yeager] The lack of any broad weather issues suppressed some gains in the commodity markets. 

For the week… 

The nearby wheat contract sold off 21 cents and the July corn contract fell 19 cents.  Optimism over weekend trade talks boosted the view of the soy complex. The July soybean contract lost six cents while July meal dropped $2.80 per ton. July cotton shrank $1.64 per hundredweight. Over in the dairy parlor, June Class Three milk futures added 46 cents. The livestock market was mixed. June cattle gained $3.58. August feeders put on $3.40 and the June lean hog contract cut $1.77. In the currency markets, the U.S. dollar index expanded by 36 ticks. June crude oil improved $2.69 per barrel. COMEX gold added $110.10 per ounce, and the Goldman Sachs Commodity Index strengthened more than 10 points to settle at 531 - 95. Joining us now is regular market analyst Mark Gold. Hello sir.

[Mark Gold] Nice to be back.

[Yeager] You've got to help me make sense of this wheat market because we're dealing with extreme weather issues in Russia and Ukraine, in the United States. We're looking at China having problems, but we continue to freefall. Why?

[Gold] I asked myself that every day for the last week and a half. I wish I could tell you we've got mosaic virus in Kansas and a fair amount of spots. It looks like it's doing some damage. We've got dryness. Iowa, South Dakota, Minnesota. Nebraska. You know, we've had some rains in the South where they needed it. So the Texas crop looks a little bit better. The crop ratings aren't all that bad. 51% good to excellent. They've been moving up. I don't know if that's going to last. So, you know, I think we're getting wheat awfully cheap here. And, it just needs some kind of spark. Maybe a China news, maybe something else. But I think they've overdone it down here. And they're short over 100,000 contracts.

[Yeager] So there's always this relationship. My understanding between corn and wheat and corn has been able to be somewhat stable. So if that wasn't the case, would we be even lower? No, I don't think so. I think it's getting down. You know, we get near $5 a wheat and you got near $5 a corn, you know, can they go even money? Yeah, they can, but it is very rare and it doesn't. I think once or twice it's happened. Didn't last very long. But you've got the funds short 100,000 contracts of wheat. All it takes is a little spark. And that spark could come over the weekend with these trade talks with China.

Is wheat the one market that could benefit the most from these talks?

[Gold] My guess it'll be the soybeans. But you know, you look at the soybean imports from China. They're the lowest in ten years. So they've got to make a commitment on these trade talks that forget about any real deal that might come out of this. They have to agree to going back and committing to the phase one deal, and to buy those products that they said they were going to buy years ago. If they do that, then you've got to be. You know, unless there's something great in this deal, which I don't really see happening. They've got to accept that. They've got to go back and honor the commitments from previous.

[Yeager] Let's stick with soybeans then, if we could. Okay. Do you anticipate that's the only mover in this market right now is this China-U.S. conversation?

[Gold] No, I, you've got to be careful here. When I talk about weather. But this reminds me a little bit about 1988, when the first week of May, we had a lot of rain and then the spigot shut off. Didn't get very hot until June. The market continued to move lower despite all this dry weather. And then in June, it finally took off. But the fact of the matter is, we're dry in a lot of spots out here. If you look at Iowa right here, this state is dry. Maybe the worst out of any of the major grain producing states. And like we said, Minnesota, South Dakota, Nebraska, Kansas, Missouri all having some problems out here. And I think people are just looking at the crop progress and how much corn and beans we're going to have planted on Monday's report. And it's going to be a big number that, you know, the crops internet's done well. The crop may be in, but it's just beginning.

[Yeager] And it's more of a corn story. But the Eastern Corn Belt is the opposite anyway. I've seen picture after picture the last two weeks if nobody's able to get in. So I've asked this before, if you are out there or you are out in the West. Yeah. What do you do? You know, you manage the risks as best you can. You know, it's going to dry up in the east. Eventually they're going to get some rains. But when is the question in the West. But on this report day you know, they're going to be plugging in trend line yields. I think it's 181 bushels on the corn. Are we going to see 181 bushel corn this year with all the problems we're seeing already? Yeah, it could happen. You go perfect. You're on in June and July. I have great weather. Sure. I don't see that happening. So we've got an old crop carry out in the corn. It should be shaved a little bit on this. Was the report getting, you know, 1.4 billion is a lot. And I think, you know, all we need is a little spark in that corn market as well.

I've asked this a little bit, but I'm going to ask it now a little more formally with Bradley in Nebraska. And he's asking is too wet in parts of the Corn Belt and very dry in the West yet. Commodities continue to grind lower. Has managed money decided to exit their long positions over tariff fears?

[Gold] Well I think that's been part of it. You know, we were long an awful lot of corn six weeks ago. Eight weeks ago. And they've come out of those huge positions they never got even. They never got short. but there's still a long 100 and some odd. I haven't seen the commitment of traders reports for Friday. But, you know, there's still long a fair amount. There's still long some beans and some pretty good chunk of oil, but they're still heavily short wheat and heavily short. The meal.

[Yeager] In corn, particularly there, you talked about the last report. We're going to get an idea on continued tight stocks, do you think?

[Gold] Well, certainly for old crop. Yes. I mean, look at the amount of exports out the door almost every week, 1,000,006, a bill, close to a billion, 7 million, 7 million, 8 metric tons. That's a lot of corn to go out the door every week. So I think they've got to shave it again. They shaved it last month. I think they're going to shave it again. The demand has been sensational on the corn.

[Yeager] What do you anticipate with the December crop? I mean, given weather challenges, are you, protection's always your thing, Mark. What are we trying to protect here?

[Gold] Well, that becomes a question of risk/reward. You know, do you want to spend $0.20 on a corn put in May? You know, if we go down to $4 corn, maybe it's going to pay off. Maybe not. So you don't want to spend a whole lot of money on these lows, particularly growing going into the growing season. That doesn't mean this thing can't go lower. So we have some kind of cheap put to get through the reports, particularly a June 30th acreage report, and then see what the weather is by then. 

[Yeager] Do you get the sense, though, that this weather pattern changed anybody's planting intentions? In corn or beans? 

[Gold] No farmers are out there planting an awful lot of corn. They look at the prices. They look at the soybean/corn ratio, and they're going to go gangbusters on the corn. Now they're going gangbusters on the beans, too. But they're just planning what they expect to plant. And I don't think they'll really nobody's going to hold that corn. If anything, they're going to put a few more corn acres in and less beans when it's all said and done.

[Yeager] I don't want to assume too much, but I'm going to November beans, we’re showing you the chart right now. We also talk about December corn. If USDA plugs in trendline, which there's really no reason to not, yet at this point. How does one position themselves ahead of Monday for, again, continued trend line, given the tight stock issues that you're talking about?

[Gold] You know, you've got to buy some kind of cheap put short dated December put can work for you short dated November being put can work for you. But again, I don't want to spend a whole lot of money at these prices. But we've got about 30% of our corn and beans sold for this year. On the other 70%, you know, we've got our clients. Hopefully most of them or all of them are into some kind of put option to protect the downside. And then we'll take it from there. If we do go down we'll roll those down. Take some money out. If we move higher, we'll make more cash sales.

[Yeager] Speaking of higher livestock, live cattle every time. It's an easy question. Seriously, can this go any higher?

[Gold] I didn't think so a week and a half ago  we started to break the boxed beef a little bit. The charts got a little toppy, but then we came back and scored new highs on Friday. We didn't. We have a new high close and new high in the lead options and cattle and feeder cattle. The back months didn't. They made a new contract high, but closed lower. That may be an indication that we may be running out of some steam here. We're seeing some cattle move from the south into the north. Mexican cattle should be coming across the border. So something's got to give. I mean, $300 feeder cattle. Are you kidding me? But it's there. And it is what it is.

[Yeager] We'll get to feeders in a minute. Because I have another question about these cattle. We talked about weights. They are just, they are heavy. Yeah. And you have the packer slowing things down a little bit. What does that mean?

[Gold] Well, I think it means that they just, they can't get the numbers. And there have been plenty of rumors about a couple of plants closing here. Are there independents? Not the big guys, because it'll hurt them the most. maybe that's what it takes. but, you know, we always see these supply demand issues out here. They always get corrected in the long run. Something always happens in the cattle market. You know, in the 50 years I've been around. It always seems that something comes up. So how can you not tell a guy in historic high prices through the roof not to buy a $4 cattle put or a $5 feeder cattle put, or to sell some cattle and buy some calls to back it up. Or look at LRP, but do something up here. You just can't hope it's expected to make, maintain these kind of prices.

[Yeager] Because that price in the feeder market. You talked about the 300. The three handle scares people, you know. Does it technically scare the market or fundamentally scare the market?

[Gold] It's the second day we've closed over it. So I would say it doesn't. You know we closed lower today, but still over 300 in the August. It doesn't seem to be scaring anybody. a lot of those, you know, we've seen in history a lot of those benchmark prices, $13 being scare people. They go through it eventually. But the fact of the matter is, you are at historic highs when you start going into the grocery store, is the American housewife going to continue to buy with everything else that's going on in the world? Are they going to switch to poultry or pork or some other product? My guess is we'll start. I've been expecting that switch. Hasn't happened so far.

[Yeager] The pork market continues to rally as well.

[Gold] Yeah. You know, pork is cheap at a hundred bucks in the futures. It's not cheap. So. But it's a downside. Better than what they're seeing in the cattle market today. And, you know, I'm going to, you know, for my wife and myself. Not a big deal. We're going to pay whatever it takes, too. We just had steaks the other night, and we're going to pay that price. But if you got a family of five or 8 or 10 people out there, are you going to be able to afford mine continuing to buy steaks and hamburger when God knows where hamburger prices are going to go? I think they're going to look for something else, maybe meat loaf, but a beef pork mixture in there or something.

[Yeager] I'm hungry. Let's close, if we could, with the oil market and the dollar, because both are very interesting points right now. The dollar always casts a shadow over commodities, but so does crude. Which one is the bigger impact right now? Do you think?

[Gold] I would have to say the crude oil. I think that's one of the things when we put crude oil, you know, down to 57 the other day, we put a lot of pressure on the corn and, and, and the beans as well. Being oil broke off of its highs. That was happened after OPEC announced more production. Every time they announce more production, we move lower and then get the money right back within 3 or 4 days, which is exactly what happened here. You know, you have to look at those commodities in the longer term perspective. If we can get the dollar to close under $0.98 two days in a row, that's going to be an indication that that dollar can move down to 94 and then maybe down to 90, which would be great news for the American farmer, the crude oil. I think we're just kind of stuck in this range from 57 to 65. And, you know, if it's up a dollar or 2 in 1 day, you know, or down the corn of beans, you'll notice that.

[Yeager] We are down to the final seconds. Thanks, Mark. Good to see you.

[Gold] Great to be here. Thanks for having me.

[Yeager] Appreciate the time. We are 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 markettomarket.org. This is also the place to register for our next live event in June. Information about the gathering is on our website.

This time of year is full of on-the-go activities. Podcasts are the perfect companion for those long and short rows. We have three options to keep you informed - the Market Analysis, Market Plus and the MtoM. Subscribe wherever you get your podcasts. 

Next week, a look at a long running Midwest refugee center worrying about the future.

Thank you so much for watching. Have a great week.

[Announcer] 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.

Family owned and operated for more than 60 years. Sukup Manufacturing is a full service provider of grain handling, storage, and drying equipment, helping farmers feed the world. 

For over 45 years, Steiner Tractor Parts has shared your love of antique tractors. New parts for old tractors. Learn more at steinertractor.com or at (877) 559-7887. 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.

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.

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