Market to Market - June 13, 2025

Paul Yeager: Coming up on Market to Market -

RVO numbers provide a late week jolt to the system.

The head of USDA updates House lawmakers. 

A look back at the recent history of this program and rural America. 

And commodity market analysis with Shawn Hackett. Next.

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 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.

Announcer: “This is the Friday, June 13, 2025 edition of Market to Market - the Weekly Journal of Rural America.”

Hello. I’m Paul Yeager.  

Global headlines dominated the cycle this week. 

As Israel pinpointed military targets in Iran, oil prices spiked on the news of the attack. 

China and U.S. trade officials met in London to shore up a fragile relationship.

The Federal Reserve Board is weighing those items and additional data before making their next move on interest rates.

The Labor Department reported Thursday the producer price index rose 0.1 percent on the month. The year-over-year reading added 2.6 percent.

The prices paid by consumers expanded 0.1 percent as well. The core CPI moved higher by the same amount. The annual reading was nearly the same gain as the PPI at 2.4 percent.

Labor is also under examination by the Fed. 

Part of the labor force under deportation orders were part of the protests in California and highlighted discussion in the committee rooms of Congress.

Peter Tubbs reports on the latest visit by the USDA chief to the Hill.

Peter Tubbs: This week, Secretary of Agriculture Brooke Rollins gave testimony to the House Agriculture Committee about the initial months of her tenure at the USDA.

Farm labor was a popular topic. Several committee members were concerned about the cost of H2A workers to farmers.

Representative David Rouzer of North Carolina expressed that the current wage rates for H2A workers are too high.

Secretary of Agriculture Brooke Rollins: “In fact, in Texas, I went and visited some citrus growers in South Texas and we could look across the border where the average hourly rate was $2 in Mexico to produce the same or to basically move the same produce, produce through in Texas at $23 an hour. This is unsustainable. I've talked to Lori Chavez Dreamer, a secretary of labor, about it.”

Representative Don Davis of North Carolina was concerned that the current H2A system is limiting the number of workers available for farm labor:

Secretary of Agriculture Brooke Rollins: “There is no doubt that, first of all, significant reform needs to happen, the H-2A to be, etc., which I know you all are leading on in a bipartisan effort, but also the importance of our administration and this president, which he does, recognizing that we have a major gap in the labor market for our dairy, a lot of our road croppers and how you balance that obviously with his commitment to America and to the American voters, which we don't all agree on, but to to address immigration.”

Representative Ronny Jackson of Texas asked for an update of the continued block on the importation of cattle from Mexico.

Secretary of Agriculture Brooke Rollins: “The 30 days is our benchmark, but we're assessing every single day. The metric that we're looking for is to watch the screwworm retreat south. It basically moved from about 1100 feet from the border, I'm sorry, 1100 miles from the border to 700 miles from the border within just a matter of weeks, which again, we hadn't seen that kind of movement in decades.”

For Market to Market, I’m Peter Tubbs

Paul Yeager: Trade with Mexico. RFS legislation. Debate on Waters of the U.S. 

All of the headlines of today have also been a part of the program for much of the last two decades.

This week, David Miller ushers in the late oughts and the early teens with the stories that dominated our coverage. Which also includes a headline of our own.

Here is our Cover Story.

David Miller: As 2006 began, rural America continued to deal with the fall-out from the previous December’s discovery of Bovine Spongiform Encephalopathy in one cow at a U.S. packing plant. While the animal with BSE never made it into the food system, the door to world markets slammed shut to American beef. We covered World Trade Organization talks on improving trade relations among the 148 member nations. Everything hinged on the U.S. and European Union coming to an agreement over agricultural subsidies. The trading super powers hit an impasse and negotiations were suspended indefinitely.

In 2007, Black farmers pushed for faster distribution of the $2.3 billion in funds set aside to pay for resolution of the federal discrimination case against the USDA. National Black Farmers Association members accused the federal government of slow-walking payments for the landmark settlement. 

Three years later, President Obama signed the Claims Settlement Act of 2010 to speed up the process but the USDA is still wrestling with some of the applications.

Congress bumped up the number of renewable fuel gallons to 36 billion with the passage of RFS 2. President Bush’s signature opened the taps on a 15 billion gallon mandate for blending ethanol into U.S. motor fuel. 

As the world rolled into 2008, the delayed 2007 Farm Bill became the 2008 Farm Law.

We also focused on the border fence between the U.S. and Mexico. Only 40% of the controversial barrier was in place but it was receiving close scrutiny. 

2008 was also the year the food vs fuel debate kicked into high gear. Squabbling on Capitol Hill had some Republican senators fighting amongst themselves. Debate topics included whether the diversion of corn to ethanol production was raising food prices and how responsible were farmers for the rise in prices. 

In 2009, we followed a trade dispute with Mexico after America’s number one trading partner enacted tariffs on 89 U.S. products. The move was in response to a federal measure stopping Mexican truckers from operating on American roads. 

That year, the newly discovered H1N1 flu virus was sweeping across the nation making millions of people sick. The virus could pass back and forth between hogs and humans but USDA data revealed 70% of the nation’s hogs were already vaccinated against H1 strains. 

Just after the start of 2010, Congress tried to clarify how much control the EPA had over the waters of the U.S. through the Clean Water Restoration Act. The American Farm Bureau Federation warned that federal officials would be able to regulate everything including puddles of rainwater on private land. The measure never made it to a final vote. 

The North Dakota oil boom was the subject of more than one report in 2011. The Baaken Formation was being tapped for its petroleum and Market to Market was there to report on the local and national impact.

began with an increase in the acrimony over the Keystone XL pipeline. The arguments boiled down to jobs and energy versus environmental protection. President Obama denied a construction permit in 2015, President Trump put approval back on the fast track in 2017 and President Biden revoked the construction permit in 2021.

Xi Jinping, the future president of China, made his second visit to Iowa. His first trip to the Hawkeye State was in 1985 when he led an agricultural delegation. This visit was part reunion with old friends and part trade mission. 

It was also the year that long-time Market to Market host Mark Pearson passed away from a heart attack at the age of 54 after more than 20 years of anchoring the program. Mark’s death left an empty space that was quickly filled by his son Mike. (3747)

“Hello, I’m Mike Pearson and I am honored...”

John Nichols, Executive Producer, 2003-2015: “When we came to the, the funeral, when we heard his son Mike eulogize him, we knew.”

A major drought hit rural America in 2012 slashing corn and soybean yields. At one point, futures prices reached record levels with corn going for $8 per bushel and soybeans going above $17 per bushel. 

As 2012 became 2013, (3846) Congress was wrangling with what was supposed to be the 2013 Farm Bill. The Republican controlled House passed one version of the agricultural measure that pulled out all the nutrition programs. The outrage among Democrats was palpable.

Rep.G.K. Butterworth, D-North Carolina:“You are attempting to defund Food Stamps, yes, you are.” 

Nutrition provisions were put back in the final version of the Farm Bill that was eventually signed in 2014.

Our coverage in 2014 included the effect on Ukrainian citizens and the world wheat market after Russia took over Crimea and looked at the 1,100 mile long Dakota Access pipeline. The permit battle pitted those protecting the environment against those seeking U.S. energy independence.

At the top of the list for stories covered in 2015 was the landmark federal court case between the Des Moines Water Works and 10 drainage districts in three northwest Iowa counties. The lawsuit alleged excess NITRATE runoff from farm fertilizer impeded DMMW’s ability to comply with federal clean water guidelines. A decision in favor of the utility would have had far reaching effects on U.S. farm production. A federal district court judge dismissed the case in 2017 and the Des Moines Water Works chose not to appeal.

John Nichols, Executive Producer, 2003-2015: “Market to Market always looks at the, the news of the day as it relates to rural America and tries to go deeper with it and put it in context for various constituencies. So our goal was to walk right down the middle of those things, shed some light on both sides and then to let the viewer decide.

Through it all we covered prices, prices and prices with the likes of Virgil Robinson, John Roach and Elaine Kub.

For Market to Market, I’m David Miller.

Paul Yeager: The trade was muted for much of the week around weather and USDA reports. Then came new biomass diesel quotas on Friday morning and it spurred movement higher. 

For the week… 

The nearby wheat contract fell 11 cents and the July corn contract gained 2 cents. 

The new demand creation in biofuels helped start Friday’s trade in the soy complex higher. 

The July soybean contract added 13 cents while July meal fell $3.80 per ton.

July cotton contracted 17 cents per hundredweight. 

Over in the dairy parlor, July Class Three milk futures declined 72 cents.

The livestock market was mixed. August cattle dropped $6.43. August feeders cut $3.72 and the July lean hog contract added $2.38. 

In the currency markets, the U.S. dollar index took off 108 ticks. 

July crude oil rocketed higher by 14 percent or $9 per barrel. 

COMEX gold improved $106.90 per ounce, and the Goldman Sachs Commodity Index expanded by more than 14 points to settle at 554 - 50.

Joining us now, regular market analyst Shawn Hackett. Hi, Shawn.

Shawn Hackett: Hey, Paul. How are you?

Paul Yeager: You know, I was good until Friday morning. And then the news changed. I want to read you some numbers. Right now, our RVO number is 3.35 billion projected, now, for, from the administration today, 5.61 billion in ‘26, 5.86 billion in ‘27. What do those numbers mean?

Shawn Hackett: Well, in addition, they're really trying to dissuade imported feedstock from producing that renewable diesel, which we know has been a big part of that in the last couple of years. So that combination really, really changed the landscape for us. Agriculture increases that demand for soybean crush increases the demand for soybeans, keeps the money home, keeps the demand home, keeps the jobs home. And when you're looking at the game of acreage, now that we're going to have to play next year, where soybeans are going to have to take millions and millions of acres back from corn, from wheat, from cotton, from rice, it tightens the whole system up at a time when prices have been kind of low and kind of unattractive.

Paul Yeager: The prices could use the jolt. Absolutely. At the start of the show, prices went up about 24, $0.25 for most of the day, finished higher on the week we were treading water, though given USDA report this week in soybeans. So how long does a rally last with this news today?

Shawn Hackett: I mean, I think this is not only a short term jolt, but this is a longer term poll. I don't think this is a one off situation. You still need to have Mother Nature get involved to create larger upside. But I feel with recalibrating this fundamental situation, looking at what the USDA said this week, you add some extra being crushed. You throw a July weather hot, dry weather problem, which we think is coming. It wouldn't take a whole lot to move those ending stocks to very uncomfortable levels. And, you know, putting ourselves in that price level of 11.5 or $12 on November soybeans is the technical targets. We have for where this might take us as we move into the mid late July period.

Paul Yeager: We'll have to talk about tight ending stocks in a minute and corn. But I want to go to wheat if I could because the report on Thursday was friendly on exports for wheat, specifically U.S. product. What does that mean?

Shawn Hackett: We are the best price in the world right now. We are priced to sell. We've had a good crop, at least for HRW and so we're moving the product. Russia continues to lower their expectation. Looking at the crop they're going to produce, it doesn't look like it's going to be much better than last year. So we have an ability to move a lot of export of wheat to other countries.

Shawn Hackett: Now with the trade war starting to calm down, it's a very good sign to see that kind of demand coming for U.S. wheat. And I think it's going to continue. And it's another driver on top of what's going on. With the geopolitics now heating up again, where we always are sensitive to that wheat. Seems to me like there's too many shorts that have been too long on a short on a lower price.

Paul Yeager: And so Thursday's is Israel Iran action to that. I mean, that's much more reflective in the crude oil market. But am I picking you, picking up. You're saying that might impact wheat?

Shawn Hackett: We did a 500 year price history of wheat prices relative to geopolitical disorders around the world, including the Middle East. And in our view is that when you get a ramping up of geopolitics and if the market believes it's not going to calm down anytime soon, that instability in the region gets the market worried about flows coming out of the Strait of Hormuz, worries about trade flows coming into Russia, Ukraine, given the proximity to that area. And so it wasn't, by accident that after that happened, the wheat market got a bit. And on top of what happened with RVO.

Paul Yeager: Well, so then here's another story that I need to ask you about. Let's go to the viewer question. Boyce in North Dakota wants to know, Sean, is the lesson from today's report? He submitted this yesterday, or the summer in general, that the funds don't care what the ending stocks are, as long as the weather forecast is good. Answer it in general terms for me first.

Shawn Hackett: Generally speaking, the I believe they do care about what the ending stocks number is. But once you've traded that number then it's all about where's it going? Is going higher or is it going lower. So this is an example for corn. Was it 1.75 billion bushel carryout give or take is what the USDA is projecting. If we do 178 year yield slightly below trend, we're back to 1.3, 1.5.

Shawn Hackett: And we know last year we ran up to $5.20, give or take on that ending stocks. If it's a 182 or 185 we go the other way. So the funds are going to trade, whether because they're going to trade which direction are those numbers going to go?

Paul Yeager: I'm not saying that weather is in is excuse, but the weather is it seems to be an excuse right now, not the stocks numbers. What you're saying?

Shawn Hackett: Well, it's just this time of the year or trying to determine what the yield is going to be. We always start off trend line yields. We're just going to go with that because why not. Right. And then the market has to modulate six years in a row. We have not made trend line yield crops in corner soybeans six years in a row.

Shawn Hackett: And every year we start off saying it's going to be trend. That's where we're.

Paul Yeager: At - but we've been close. We just haven't been to the exact numbers. So does the market. I think, I asked this to Matt last week, was, does the market just think we're going to get close enough? And that's all that counts. Because what else can be really the problem here?

Shawn Hackett: Well I think with the start that we've had understand that most of the time we have a very bad May-June, hot and dry. That's where the way the trend has been. And then we get a good July. So the market gets all excited in the first part of the season, and then it crashes in July and August. This year is completely different.

Shawn Hackett: Great. Great start, good moisture, fast planting. So they're going well. We haven't had a start like this in a while. We're going to get trendline yields. We're finally going to do it. The problem is I don't believe we're going to have a good July. Finally we're going to get to July. That's dry and hot, and it's going to put worry back in the market that those yields once again aren't going to, it doesn't have to be a major crop problem 178 yield gets us really, really tight again.

Shawn Hackett: And that's not a big thing to ask for.

Paul Yeager: Because we had been I think last year was very wet in June. Then it waited until August to get hot and dry. But you're saying July. So I mean I had somebody asked me wanted me to ask you when's the drought coming? And it sounds like July.

Shawn Hackett: Yeah. I mean, our projection is late June. The weather pattern changes. We get a very dry July, you know, I would say excruciatingly hot temperatures, but warmer than normal. A good finish and a very, very challenging harvest season. Very wet, very cold with frost. Risks in late September potentially coming in. When you run all that through the system, I find it very hard to believe that we're going to come away with a trend line crop. I think we're going to be modestly below trend yet again.

Paul Yeager: Quickly. What do I do then in that scenario?

Shawn Hackett: Well, in the scenario, what we're looking for now is we're looking for this kind of a rally, a summer rally in the market in to mid, late July instead of mid late June to look for cash marketing opportunities. That's what we've been projecting and discussing with our customers. And that's what we're seeing is the opportunity. Now hold.

Paul Yeager: For now.

Shawn Hackett: Hold for now.

Paul Yeager: All right. What about in cotton? Are you holding?

Shawn Hackett: Or absolutely holding? We've been in a boring watching the paint dry. I mean, you know, you know, even it's been just the quietest market you ever want to see. That's not a market. You typically want to be selling aggressively, especially when it doesn't really work for the cotton farmers that I'm aware of. I believe, we believe that the acreage report at the end of the month is going to show a surprise decline below current expectations on number of acres and unharvested acres and all that cold, wet weather they've had in the Deep South and in the southeast is also going to compromise quality and yield. And it won't take a whole lot of that reduction to create a move up into the cotton market, into that, you know, to create a better price.

Paul Yeager: Well, we can't seem to go much lower.

Shawn Hackett: Well, the price, as we just haven't been able to do it. Every time we try to knock the market down on outside forces, it looks like a beach ball keeps popping back, popping back, popping back. And whenever you see that, eventually it starts to turn up. And we think, now this period of time is the right time to recalibrate correct expectations.

Paul Yeager: Recalibrate? Is that what happened in the live cattle market? right here on Friday?

Shawn Hackett: Yeah. I mean, look, we did a 60 year study on cattle. And every time that we, that the rebuilding year starts, we have topped out in the third quarter of that year, which is coming up. And you tend to get a final surge when those animal feeding units are kept back. We have had targets of 220 on August cattle and we had targets of 310, 320 on August feeder cattle.

Shawn Hackett: We kind of got to those levels. And it's my expectation that we are going to see the market once again top out in advance of the eventual increase in supply going ahead. I mean, that's just what history tells us to watch for. This could have been the final, final surge. We're advocating strong cattle equity preservation for cattle ranchers right now. We think this could be the best that you're going to see.

Paul Yeager: Is there also the concern that the consumer now will have to spend extra money, maybe in fuel or energy, that they'd been having to spend in beef? Do you think that's a…

Shawn Hackett: Anytime that you're taking money away from another spot? It hurts the ability to keep paying high prices for beef. And when consumer sentiment crashes like it's been doing and we're now seeing the hog price, by the way, has gained on the cattle price since early April for the first time in years. Meaning there's a shift, there's a final rotation and demand going for finally saying, you know what, I can't keep doing this on the beef protein. I'm going to go for the pork protein and start feeding my family. That way I see a big change there.

Paul Yeager: And the feeder side of this equation, it looks like from what I read late in the week, the backgrounders, or maybe the ones kind of losing out right here. Who else?

Shawn Hackett: I mean, the background is what I've been hearing too. but, I mean, I just, I just really kind of feel that that. I just really feel that the economic situation and the supply demand situation and the expectations that we have in the market right now have gotten to such an extreme. I mean, oftentimes hog prices and cattle prices are in parity. It's happened a lot. It's our bold expectation that it, within the next two years to three, hog prices in cattle prices are going to be the same price. Again. It's not just from hogs going up. It's going to be a combination of both. But we really feel we're going to go back to that price relationship. It went too far for too long and two items spread.

Paul Yeager: Hog market did go up this week. What? Why is that?

Shawn Hackett: Well, I just think demand is improving. Supply is still kind of not showing up the way that we would expect it to. Slaughters are coming in shy, weights are coming in shy. And I think we're getting this big switch over from high protein beef to cheap protein pork and that trend of the hog demand and the hog price gaining on cattle is a trend that once it starts, it goes on for a considerable period of time. And this has nothing to do with any kind of trade deal that we might ultimately work out with China or anything else that might increase the demand for U.S. pork.

Paul Yeager: Final seconds crude oil. We go back to that consumer. Is that unrest only that drives this market here in the next 30 days?

Shawn Hackett: I mean, I think unrest is clearly what's on people's minds. obviously, the other thing that we've been following is that a lot of these, well, as are starting to peak and starting to roll over, meaning that we're where we're drilling more and more, but we're not getting as much out of them as we used to. 

So we're sort of reaching what we call peak, maximum production out of these wells. And of that, is the long term picture for U.S. production. Then drill, baby, drill may not do much good. And that could really tighten up the market, especially with the unrest in the Middle East.

Paul Yeager: You know, what was good was our conversation. Thank you Shawn. Thanks, Paul. Good to see you. You have been watching the analysis segment and in a moment we will continue our discussion in an online only segment, Search Market Plus with Shawn Hackett, 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, an extended discussion on the livestock and commodity markets. 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.

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.