Market to Market - June 6, 2025

Paul Yeager: Coming up on Market to Market -

Limited trade data offers little clarity while a trans-continental phone call yields even less. 

The aging farmer gets a spotlight in the Senate. 

High cattle prices continue to confound the complex.  

And commodity market analysis with Matt Bennett.

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“This is the Friday, June 6, 2025 edition of Market to Market - the Weekly Journal of Rural America.”

Hello. I’m Paul Yeager.  

Friday morning brought two more data points on the employment picture. 

U.S. employers added 139,000 positions in May. The Labor Department data revealed jobs were gained in healthcare, bars and restaurants. 

The unemployment rate remained at 4.2 percent  which is still near the recent historic low of 3.4 percent in April of 2023. 

The trade deficit narrowed by the largest amount on record with a cut of 55 percent last month. Consumers and companies who had moved purchases ahead of when tariffs were levied appeared to have since dramatically halted imports from other countries to avoid the fee.

Withheld analysis on a quarterly USDA report caught the attention of the agricultural industry. 

Politico reported the redacted segment showed a forecast calling for an increase in the trade deficit of farm goods.

Trade has been central in messaging and action for the last four months of president Trump’s return to the White House. 

China remains at the forefront of the discussion and a phone call is the story of the week as David Miller reports.

After tacking a 50% tariff on all steel and aluminum imports midweek, President Donald Trump had a phone call with Chinese leader Xi Jinping, the first  since returning to office. 

President Donald J. Trump: "I think we're in very good shape with China and the trade deal. We have a deal with, China, as you know, but, we were straightening out some of the points."

The current trade tiff between the two economic superpowers focuses on America’s need for rare earth minerals and the Chinese government’s objections to U.S. restrictions on the sale of advanced computer chips and the curtailment of access to student visas.

Trump has said that he likes Xi but called him a tough negotiator. 

Trump has lowered the 145% tariffs on Chinese goods to 30% for 90 days to allow for talks. In turn, China reduced its taxes on U.S. goods from 125% to 10%. The back and forth has made for sharp swings in global stock markets and many believe it threatens trade between the two countries. 

The president says there will be trade talks soon but it was unclear when top Chinese and U.S. negotiators will come to the table. 

Tariffs are paid by the companies that are importing goods, and the costs are usually passed on to consumers.

For Market to Market, I’m David Miller.

Yeager: The age of our country’s workforce is rising. 

As the older employee approaches and passes the traditional retirement age, the worry over replacing that worker, especially on the farm, is becoming a concern.

A Senate committee hearing this week put the issue in the spotlight as Peter Tubbs reports. 

This week, the Senate Special Committee on Aging heard testimony on the challenges facing aging farmers. Witnesses stressed that both the estate tax and profitability are hurdles to bringing a new generation to the farm.

Senator Tommy Tuberville, R - AL: “Your thoughts on this? Long as I've been up here, I've been advocating to permanently repeal the federal estate tax, which is often called the death tax. I know it means a lot for farmers, so just like we'll start with you, your thoughts.”

Aaron Locker, Kincannon & Reed: “Well, Senator, I think obviously you look at modern agriculture today. I mean, it is a massive investment. Even small farms, I mean, if you add up all the assets. And so anytime that that you want to pass that along to the next generation comes a significant cost and is in many cases cost prohibitive. And so yeah, doing away with the death tax. And I think we get we get you know, bottled in with, you know, other businesses and it's, it's going to be farther from the truth in terms of, comparable, that, you know, when you're passing along the farm business, it comes with, like I said, a lot of cost, a lot of assets. It takes a lot to run a farm today. And so doing away with the estate, the death tax, is the right thing to do to be able to continue to pass it down to the next generation. Otherwise it becomes cost prohibitive.”

Senator Raphael Warnock, D- GA: “What would you say that the tariffs and the uncertainty that's been created around the tariffs has made it worse, tougher for for even tougher in a tough business?”

Zippy Duvall, American Farm Bureau: “I think I think in the short term it has not really affected them yet. But when we get to this fall and they start selling their commodities and then and if the we don't have solutions to the tariff war, then we will have lost some markets that we have depended on for years. and then we'll start seeing the crisis hit.”

Jim Alderman, Florida Farmer: “It was just Mexico was coming after Florida tomato farmers right after NAFTA. Well, 20 years later they're growing pepper and squash and corn and beans and every vegetable we grow all the way up the East Coast all the way to Jersey and past. They're going to be competing with all of them, Mexico with all those products and their labor is I don't know, what are they paying $10 a day and we're paying $25 an hour. There's there's got to be some help with the the balance of trade. We don't want government to give us anything but get it. Get us on a level playing field with with Mexico and Canada.”

For Market to Market, I’m Peter Tubbs.

Paul Yeager: The U.S. cattle herd is the smallest it has been in 64 years. 

The prices in live and feeder cattle have hit record highs.

Weather and disease are factors in the story but there’s also the consumer side to consider in this complex sector of the ag economy.

Dr. Derrell Peel is with Oklahoma State University and has spent his four decade career looking at these factors.

He’s our next guest in the MtoM podcast scheduled for release Tuesday. 

Here’s a sneak peak in this week’s Cover Story.

[Peel] Yeah. You know, this is completely unprecedented in a number of different ways. You know, from just the internal fundamentals of the industry, the normal dynamics that we deal with or from the supply side, and then, you know, add to that all of this, political environment that we're working in now, the macroeconomic environment that we're working in now. And then, you know, we've had some unique things here with some animal disease issues and other things. So, yeah, when you put all that together, there's never been anything that I've experienced like this.

[Yeager] We were running up, though, prior to Screw Worm being a headline maker. Right? 

[Peel] Oh, absolutely. You know this. In fact, I don't think Screw Worm has relatively little to do with where we're at in terms of prices and the movement of markets right now. It's one more factor. And it's and it's kind of adding to the situation. But, you know, this is not a market driven primarily by the, you know, by the border closure or anything related to that. We're in again, the supply fundamentals in this industry are in a situation we've not seen, maybe ever, but certainly not in decades. 

[Yeager] The last time you and I spoke was after a massive report last year that said the smallest herd since this date. Then we went and added it to it this year with inventory lower than before.

[Peel] Exactly. Yeah. 

[Yeager] Why is it not? Why are we not getting more inventory? 

[Peel] Well we will. You know, it's been a slow process. I've spent a lot of time in the last few months studying previous cattle cycles to try to understand the one we're in now. And, and one of my main messages for producers for many months now has been, you know, I know you remember what happened about a decade ago. We had a cattle low in 2014. We expanded to 2019 and started down again to where we are now. and I said, I know you remember that, but this one, even though some things about it are similar or at least some of the fundamental causes are similar, there's some very important differences. This time it's going to be different and has played out thus far to be different. And I think it's going to continue, to be a little bit different story as we go forward. 

[Yeager] You mentioned already some of the factors that make it different, but is there one, if you had to pick just one favorite child that made this happen for this run up? Is there one? 

[Peel] It's tough because I think it's a list of things. But, you know, you can easily say, well, the last two lows were caused by drought or exaggerated by drought. The industry has been cyclical for 150 years, but it's turned out the last two times we've had droughts, right at the low point of inventory that has exaggerated those lows. What's different this time, fundamentally from the last time, is that the drought, a decade ago, was very regionally pronounced. It's primarily here where I'm at in Oklahoma and Texas. And what happened to us was very severe, and it was severe enough to change the national numbers. But not everybody in the country went through that drought. And so they were prepared to respond more quickly coming out of the drought. This time, we've had multiple years of drought that have been pretty much around the country. It's kind of moved around a little bit in emphasis, but everybody's had a turn in the barrel this time. And so the overall impacts to the industry have been much more widespread. It's taken longer for recovery. And I think that's what we've been experiencing the last couple of years. And we're still not out of it. We just can't seem to really get a clean break on this drought at the moment, we're in pretty good shape in the Southern Plains, but there's still a lot of issues in the central and northern Plains and in some major beef cattle areas. So, it's been a long, slow process and will continue to be, I think, a lengthy process as we go forward. 

[Yeager] Let's go off the farm to the grocery store. What's the consumer's role in all of this been? [Peel] You know, in this situation, obviously, everything is tight from the bottom up. Right? So, as you work your way up, the implication is, of course, that sooner or later, beef production will fall more than it has. We have not dropped very much in the last couple of years, even though we peaked the overall beef production in 2022. But we haven't really dropped much, certainly not in the last year. We were actually pretty flat last year. I say all that to say that we've got record high consumer prices, retail prices, wholesale beef prices. and that was, that was actually in place on sort of steady supplies of beef. As we go forward, we're going to have less beef. Beef supplies are going to tighten up. And so that's going to continue to support higher prices. You know, probably the biggest question I've had for many months in my meetings is, is there a limit to demand when, you know, when do we top our demand and we just haven't seen it yet? Beef demand has been remarkably strong. It's a real testament to the industry, continuing to produce very high quality and very consistent quality beef in recent years. And so, the consumer demand has been remarkable as we go forward with a tighter supply, we're going to continue to see higher prices. I think, you know, I don't think there's any real relief for consumers for the foreseeable future, in this thing, because we've actually got to make things tighter, as we start the rebuilding process, when we save heifers and pull them out of the feeder supply side of the industry, then we're going to make, we're going to make the, the, you know, the beef part of this, the retail part of this even tighter, for quite a few months. Eventually, of course, we lead to higher production. That's a couple of years at least down the road. You know, as we've said, the supply fundamentals are just extremely bullish right now. Extremely tight is going to get tighter because of the normal dynamics of rebuilding the industry. and consumer demand has been stellar up until now. It is somewhat surprising honestly. I've looked for problems for a couple of years. We just haven't seen it.  

The full discussion will be part of the MtoM release on Tuesday.

Announcer: Next, the Market to Market report.

Paul Yeager: Escalation between Russia and Ukraine impacted the wheat trade. While potential for India importing grain impacted corn. For the week, the nearby wheat contract added $0.21 and the July corn contract lost $0.02. The trade was monitoring talks with China and this season's planting nears completion. The July soybean contract found $0.16, while July meal fell $0.60 per ton. July cotton expanded $0.49 per hundredweight over in the dairy parlor. July class three milk futures declined $0.72. The livestock market was higher. August cattle improved. $9.53. August feeders put on $11.32, and the July lean hog contract added. $2.17. In the currency markets, U.S. Dollar Index took off eight ticks. July crude oil expanded by $3.70 per barrel. Comex gold increased $26.90 per ounce, and the Goldman Sachs Commodity Index gained just over 16 points to settle at 540.10. Joining us now is regular market analyst Matt Bennett. Hi, Matt.

Matt Bennett: Hey, Paul.

Paul Yeager: I know how you always love to start with wheat, but we absolutely. It is the big story of the week. Yep. Is this more than just Russia Ukraine fears impacting the global supplies or something else?

Matt Bennett: You know, a week ago Monday you had the ratings come out for spring wheat, and it sure seemed like that 45% kind of shocked the trade. And it just seems like we've been able to build a little bit from here. Clearly, you know, Russia still has the cheapest wheat. The problem is, of course, there's a lot of concerns. And so getting that wheat where it needs to go, you know, and so, I feel like wheat was just beat down for so long. It took a little bit of good news to at least get a spark going. Are we going to have a gap higher, over the, over the weekend? Potentially? I don't know, but I know a lot of folks are saying, what if Russia retaliates over the weekend? It's definitely something that could happen. And so, yeah, I'd be real cautious here. You know, is to think that this wheat market can't keep going higher, especially if this global conflict continues.

Paul Yeager: So if you sat on the sidelines for the last two months not doing anything, are you entering the game yet or you're still sitting off to the side?

Matt Bennett: I don't, trade wheat first of all, because I've traded it before and therefore I don't. But if you're sitting here trying to figure out, hey, when might I make a few sales? By all means, you're in a better position than what you were before. Incremental sales into a rally is the best way to approach this market.

Matt Bennett: Could we go sharply higher? In my opinion, it's possible, but I sure wouldn't count on it. So again, I want to incrementally reward.

Paul Yeager: All right, let's go to corn, because the old crop story has all of a sudden become a little more of a hot topic than it is the new crop. We'll get to new crop in a minute. So we got to talk about you, old crop. If I have anything left. Is now the time to say I'm done?

Matt Bennett: This week we went and we made new lows for the year on July a couple of times. And then on Friday we kind of went back down there again. And then we closed higher. No, we didn't close higher for the week. We didn't reverse this market for the week. But what we did is we surfaced a little bit of buying.

It was very interesting this week, Paul, because the overnight markets, if you sold the clothes for July corn, you'd have made money every day. But Friday, for some reason you both spread in the overnight markets and then you turn around in the day session and it reversed. I've got to think, if you look at the commitment of traders report, what you're going to find is that the funds are short and more old crop than what they are new. Okay. And so if I've got old corn left, that's your question. In my opinion. You got to give this a little bit of time. If we did kind of set a low in place. The other thing is, is that basis has been pretty darn strong for most people, especially east of me. I mean, basis in Ohio and Indiana is on fire. Now, if you go up into North Dakota, it's complete, just complete opposite. Okay. But if I'm holding on to grain right now, as processors have, you know, improved basis, I'm going to wait around just a little bit because I've got to think that all that corn they bought in January, February have got to think that their needs are kind of, you they just don't have a whole lot of corn left. And if that's the case, if you do get a weather market to surface, which is something I'm sure we're going to talk about, it could make things very interesting if they don't have their needs met. 

Paul Yeager: Before we move on. India's always that unicorn that the U.S. has never or anybody really been able to land in corn. Yeah. Do you think that is providing hope for this market?

Matt Bennett: Yeah. Corn and ethanol both. You know, that's the things that people have been talking about. I do think that it gives you at least something positive to talk about whenever it comes to trade. Right. And so clearly exports this year have just been fantastic. The talk lately I think overall with exports though is what are we going to do this next year. You know if Brazil, Brazil's got a big crop, that's all there is to it. And that has been one of the things that's really been hard on July corn, in my opinion, is not necessary. I mean, we're still fairly tight in the U.S. The problem is that you're going to have enough corn down there to be very competitive in the export market. So you've got to have some good news. Is it giving you some hope? Yes. I think that maybe as much as anything, whenever you look at, for instance, the bear spraying that's gone on this week, these being able to rally on the week is probably a function of some of this weather.

Paul Yeager: Well, weather has been a thing personally for you in your area. You were telling us again, a couple of weeks ago when you weren't able to make it, you were still trying to plant corn. Are you done?

Matt Bennett: Yeah. We're done. And so we were able to get done. And we've finished at a later time frame before. Don't get me wrong. And our crops don't look bad. Okay. But I'm in a really interesting part of Illinois where you go just north of me, maybe 15, 20 miles. And some of those guys were done in April, you know, and you go south and me 5 to 10 miles, and some of them aren't done yet. And it's really an interesting dynamic there. What we had a lot of this spring was rain, but not large amounts, just too many 3/10 and 4/10, half inch rains. Couldn't keep going. but overall, with all things considered, I think our crops look pretty good. Coincidentally on the way up here, you know, coming from here to Des Moines, I would say a large chunk of my drive in Illinois, especially some of the best looking crops I've seen.

Paul Yeager: What about when you went into Iowa? Because I've made that route again. We just took the show there, on Tuesday. Things have improved. How does that compare?

Matt Bennett: They've certainly improved. I would say clearly, parts of eastern Iowa, we're a little bit behind, you know, some of that crop in Lincoln up to the Quad Cities area. Some of that corn is pretty darn tall and looks awfully good. And of course, taller it gets it you don't see a whole lot of holes or deficiencies. So I'd say the Illinois crop right now looks a little better.

Paul Yeager: Okay, let's get this question in quick, then. This one comes from NE Iowa farmer. He wants to know how much, how long are you staying patient on new crop corn and beans sales?

Matt Bennett: That's a great question. I've talked about this a lot in my newsletter. I'm assuming that they've read this. You know, it depends on the producer situation. I mean, here's a problem, Paul, $4.50-ish December corn, a lot of growers are going to really struggle to call it a win from a profitability standpoint, at normal yields. Right? Soybeans. Come on. You know, you'd be lucky to get $10 cash for beans right now. And so it's really hard to get real aggressive. It's tough for me to be resolute. I, hey, we need to go ahead and make sales here, if you're going to tell me as a grower I can't make money here. And so yes, we typically get some sort of a weather market. The last couple of years. So we've just kind of faded. And it's really hard not to think that's going to happen again. But at the same time, do I want to lock in a loser in June? I personally, know, personally, you know, in the last 20 years, every time we've come out of the spring insurance setting period of February and we're lower than that average, the first trading day of March, we always go back to that average. This year was four over 70. I'm not saying this won't be the first year in 20 years that didn't happen. That's always a possibility. But for me personally, I kind of want to give this weather a little chance to play out. And when you see all of these models converging into a dryer bias for the Western Corn Belt, I'm not saying we're going to have a drought in the Western Corn Belt, but if we could get a weather story going and at least get some sort of a weather scare, I think give you an opportunity.

Paul Yeager: Anything like that on beans, then.

Matt Bennett: Yeah. I mean, obviously if the corn market gets a little bit of a spark, you would think beans would as well. The bean balance sheet is pretty tight. There's a lot that could be called into question there with a new crop balance sheet. If we have issues with China as far as new crop sales, we've been above that $10.54 level, which was your spring average twice. Now can we go back above it? I mean, right now I'm in that $10.70, $10.80 level. If I'm going to step forward with more sales, I want to give it just a little bit of time as well. I don't want to say I'm bullish beans. It's just really tough to make a sale right here, again, if I'm underwater.

Paul Yeager: Let's get to livestock here because just when you think it can't go any higher, this week comes along. I mean, I'm not going to ask you the question. That's easy. But at some point, right, this has to end right?

Matt Bennett: Yeah. And nobody really knows. Nobody really knows what's going to be the thing that, that causes that, Paul. Whenever you hear about fats in that $242, $244 level, you know, and a week ago you were talking $230s. Well, hey, this, futures markets got to catch up. I mean, got to get some convergence at some point. We have had it forever, but it seems like we had a concerted effort to get a little bit of convergence this week. And that all the while, you know, I heard yesterday that, there were folks in Oklahoma and Kansas, $230 offers and no takers. You know, and so you're going to continue to see this market chase higher until it doesn't. The problem, if you're sitting on several pens of fats, you've got to understand what your risk is. It's clearly a large amount of risk that when the screwworm story came out, it just spooked the daylights out of everyone. And unfortunately, something like that. When it occurs, the gate, so to speak, won't be wide enough for everyone to get out. So I would at least cover myself. When you're talking all time highs, I mean, these cattle prices are just flat out fantastic.

Paul Yeager: Well, in feeders, I'm not sure if it was feeders or in life that had, I believe a lot of long positions were extended this week. Yeah.

Matt Bennett: When you have long positions extended, it certainly makes you want to just sit around and wait, right? I totally get that in the fundamentals of the cattle market. I mean, what more could you ask for? but at the same time, you don't have to be calling yourself bearish. Just because you got a flaw in the market. You can be a big time bull, but you're just a smart one because you've at least got something underneath you.

Paul Yeager: So what happened then in hogs this week? Because they've also run up. And if those had flaws when it looked bad just a few weeks ago, are they winning right now?

Matt Bennett: Well, I mean, the thing the hogs, you would think that maybe we would have seen more strength yet go ahead. Quite frankly, as strong as what cattle were at some point, I've got to think that some of these folks that are long cattle and short hogs, because I do think there's some of those spreads out there. Those could unwind and that could be supportive somewhat to hogs.

But you've got to think there could be some replacement going on or you know, people just choosing Fork Chef over a steak. I mean, you would think that's going to happen somewhere in here because, you know, it's not cheap to go out and buy beef right now. but at the same time, most of us, have a pinch it for, for grilled steak over the weekend, and I, I don't think people are slowing down just yet.

Paul Yeager: All right. Lastly, in the last 10s here, hogs again, of these three. Any of them have any bearish headlines ahead? Okay. I’ll have to ask you that in Plus my apologies, man. 

Matt Bennett: No problem. 

All right. You've been watching the analysis segment. And in a moment we will continue our discussion in an online only segment, I'll even finish that question there, search Market Plus with Matt Bennett. Wherever you get your podcast to hear that conversation or go to our website of markettomarket.org. You can also leave us an email on any matter by sending it to markettoMarket@iowapbs.org. Next week, our fourth installment of our Look Back segments about this program.

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.

Announcer: 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.

Announcer: 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 and fuel the world.

Announcer: 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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