China Talks Yield Few Details, Dairy Successions and Harvest Delays

[Paul Yeager]  Coming up on Market to Market. Trump and XI meet to make a deal on everything from pandas to soybeans. Passing the dairy on to the next operator. A succession story and commodity market analysis with Arlan Suderman next.

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[Paul Yeager] Hello, I'm Paul Yeager. Inflation keeps sticking to key parts of the economy, including the housing market. New home sales jumped 6.4%, the fastest pace of the year. Builders leaned into price cuts and incentives to offset elevated mortgage rates and affordability challenges. Nerdwallet's daily survey of mortgage rates puts the 30 year fixed lending rate at 7.23%, while Freddie Mac's average was 7.03%. Orders for long lasting items, otherwise known as durable goods were flat in August. Diesel set a new record this week. Tuesday's national average from AAA was $6.53 a gallon. Friday's reading was $0.03 lower. Farmers are facing high diesel costs as they head into the fields for harvest, something that might help balance the books is a trade deal to rally grain prices, which could come in the wake of this week's visit by China's president. Presidents XI and Trump shared a lot of “ceremony” and few details. How much substance was covered may be revealed as early as Monday before departing, the two toured the National Archives, home of the Declaration of Independence, the Bill of rights and the Constitution. Peter Tubbs reports on the trip.

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[Peter Tubbs ]This week, the White House presented China's paramount leader with a lavish welcome to Washington, D.C., for his first visit to the nation's capital since 2015, leading the discussion were the tariffs placed on goods by President Trump in 2025. Even without the latest duties. Those tariffs are still straining supply chains around the globe. A two month extension to the pause on the current reciprocal tariffs was announced, pushing the end of the truce to January 10th of 2027. While grain exports should continue, the 2026 export year is still trending lower than the 2024 export year. Just before the Trump administration sparked the latest tariff war. American farmers may benefit from a longer delay in any spikes in tariffs.

Gbenga Ajilore, Center on Budget and Policy Priorities  “We we you'd like to see something more long term and have a long term ho long term h horizon. I mean especially for our farmers who plan, they don't plan week to week. They plan season to season, year to year, to think about what's gonna be in the future.  So you'd want to see us do something similar to that. But it's one of those things where, you know, it's not what you say, it's what you do. And so what we've seen this administration do over the last year and a half is, you know, there's not a lot of hope for that.”

[Peter Tubbs ] The truce has been welcomed by several commodity groups, including the American Soybean Association, over the first six months of this year, 11 million metric tons of raw commodity crops have been exported to China, including wheat, corn and soybeans. The amount is a big rebound over the 7 million metric tons exported in 2025, when the tariff war began, purchases of all crops by China have fallen well below the 48 million metric tons purchased in 2021.

Gbenga Ajilore, Center on Budget and Policy Priorities “For China, I think one of the biggest leverages that they have is that we are not the only game in town. And so we go back to the first Trump administration when we had that trade war, they started dealing with Brazil. And then last year they had a new partner in Argentina. So, you know, China can say, Well, we wanna purchase from you but we have other options in Brazil and Argentina and so I think that's the leverage that they have.”

[Peter Tubbs ] The president's relationship with. She may have little effect on diesel prices, which reached a new high this week with rural America working on harvest. Fuel prices are cutting into already expected slim margins for the crop. For Market to Market, I'm Peter Tubbs.

[Paul Yeager] Demand for cheese, yogurt and butter is helping boost milk checks for dairy producers. A new report from Cobank finds herds producing higher levels of butter, fat and protein are earning more as a growing share of the nation's milk goes into manufactured dairy products. Those components are now the leading driver of milk check revenue, tastes and products change, but milk has been the center of the barn work for generations. For some dairies, ownership is passing down the family tree. For others, new owners are coming in a different way. Laurel Bower has our Cover Story.

[Laurel Bower] In 1930, according to USDA, there were 167,000 dairy herds in Wisconsin. Today, there are under 5,000. While farm numbers have decreased, milk production has increased. The dairies that remain, in many cases, are larger and run by people who are confronted with increasingly complicated financial and operational decisions. One of those decisions: How to pass the farm on to the next generation.  

A recent report from Dairy Herd Management found that only two in five dairy operators have a defined succession plan. That means, nationwide, roughly 60% either lack a plan or are unsure if they have one.

Joy Kirkpatrick is a Farm Succession Outreach Specialist. 

Joy Kirkpatrick, University of Wisconsin-Madison Extension: “I focus on, when I work with farm families, on what I call a three step process. The question is, where are you now, where do you want to be and then how do you get there?”

[Laurel Bower] Experts like Kirkpatrick say one of the most important parts of this process doesn't involve a lawyer, an accountant, or a financial statement. It starts with a conversation.

Joy Kirkpatrick, University of Wisconsin-Madison Extension: “What I find is being able to learn how to communicate more as business partners versus family. I think that is a key part.”

[Laurel Bower] In Amery, Wisconsin, Four Hands Holsteins is working through a model that has defined American agriculture for centuries: the ownership of a family farm moving from one generation to the next. 

Rick Dado, Four Hands Holsteins: “It really starts with farmers themselves in a positive picture of the lifestyle and the business to their children or other potential heirs or participants in business, and also to try to create a fiscal responsibility, so it’s sustainable.”

[Laurel Bower] The 1,500-acre operation milks around 450 registered Holsteins. Its name comes from Rick and Gwen Dado’s four children, who grew up helping on the farm. Two of the kids, Bethany and Trent, decided to return to the dairy.

Bethany Dado Senn, Four Hands Holsteins: “They walked into the situation with a lot of grace and understanding that it has to be a two way street. There’s compromises that the farm owners will make and there’s compromises that the transitioning children will make as well. When we sat down at the table to have this first transition discussion, my sweet, sweet father brought forth a survey for all of us to take, and it included what our expectations were for the diary, where we saw the dairy in the short and long term future and how we saw interacting with each other.”

[Laurel Bower] Their succession plan wasn’t something that happened overnight. It was a gradual process and one, according to Rick and Gwen, that will continue for generations to come.

Gwen Dado, Four Hands Holsteins: “We’re thinking about our steps. We’re thinking about the end game. And we know it’s a little bit at a time. The management is going to be a little bit at a time for Bethany. And when Trent gets back, boots on the ground, you know, it’s going to be a bit at a time and we get that. And I think they understand that too.”

[Laurel Bower] The approach taken by Four Hands Holsteins is only one way of addressing one of the most difficult questions in farm succession: ‘How do you keep a family together while making business decisions?’

Bethany Dado Senn, Four Hands Holsteins: “It was very clear on the table from the get go that if at any point there is something that damages family relationships, we cut it right there because at the end of the day, the family dynamics are more important than anything else. It has taken a lot of honesty and strong conversations amongst us and those are still ongoing.”

[Laurel Bower] Nearly 300 miles away, in Watertown, Wisconsin, Rosy-Lane Holsteins built its succession strategy around partnership rather than traditional family inheritance. Founders Lloyd and Daphne Holterman began bringing non-family partners into the ownership structure years ago. Tim Strobel became a partner in 1999, Jordan Matthews joined in 2013, and Sam Peetz in 2024.

Jordan Matthews, Rosy-Lane Holsteins, LLC: “The motto was hopefully give it to your children. And at the time, they were 40 years old and they had young children who were single digit ages, and they didn’t know if this was the right fit. They had seen a few models out East where it’s quite common. In Wisconsin, not common at all. People who brought in, you know, top level talent and first thought, wow, we could work with this. And you know, wow, I want this person to be on our farm because they are the best fit for it.”

[Laurel Bower] The Holtermans transition ownership through a multi-generational LLC based on merit rather than lineage. Non-family successors earn the right to buy business equity after proving their value in management roles. 

Jordan Matthews, Rosy-Lane Holsteins, LLC - “I think is a little token for people that are interested in ownership roles or an investment opportunity that they they're going to be here for longer. And we need this farm to continue to succeed for ten and 15, 20 years. These buyouts don't happen quick, easy and forever.” 

[Laurel Bower] Today, Rosy-Lane supports more than 30 families, farms on thousands of acres, and manages roughly 2,400 animals across two locations.

Jordan Matthews, Rosy-Lane Holsteins, LLC: “You know, the Holtzman family moved here in in the 60s. And, you know, look at us now. We're we're 67 years later and there's no finish line in sight, right? We want to be here for another hundred years.”

[Laurel Bower] Both dairies have found different ways to navigate farm succession but it all began with everyone sitting down and talking. 

Bethany Dado Senn, Four Hands Holsteins: “I’ve watched my parents really get outside of their zone a little bit as I bring different changes and suggestions to the table. You know, they’re very open to that and I’m really appreciative of that. And I want to give them the confidence to know that the farm is in good hands when they decide that it’s time to retire.”

For Market to Market, I’m Laurel Bower.

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[Paul Yeager] No news of a deal with China took the markets lower before promises of details Monday boosted the trade at week’s end. 

For the trading week ending September 25. 

The nearby wheat contract lost 11 cents and the December corn contract added a penny. 

Meal kept a floor under the soy complex while trade negotiations took place in Washington. 

The November soybean contract gained 16 cents, and December meal put on $12.40 per ton.

December cotton increased $1.58 per hundredweight. 

October Class Three milk futures fell by 52 cents.

The livestock complex was mixed. 

December cattle fell by $4.48. November feeders gained $13.98 and the December lean hog contract expanded by 48 cents. 

In the currency markets, the U.S. dollar index found 85 points. 

November crude oil sold off $3.69 per barrel.

COMEX gold expanded by $1.20 per ounce, and the Goldman Sachs Commodity Index was down just over 3 points to settle at 748 - 94.

Here now to lend us her insight on these and other trends is regular market analyst Arlan Suderman. Hello, sir.

[Arlan Suderman] Hello, Paul.

[Paul Yeager] This week really had one focus. Any other week it would have been the weather and how delayed we are with harvest. We'll get to that. What did the summit need to happen? Needed to be said to keep agriculture markets fed with information.

[Arlan Suderman] Well, they needed some type of details on commitments to purchase, and I think that was too high of an expectation. That's not the way these summits between Trump and XI work. Each time we've had a summit. No announcement in a couple days later, the White House releases something talking about what the agreement was. China never does confirm. That's the pattern that we've seen. But this is also the era of algorithmic computers, computers putting on orders. And I think we saw that play out on Friday pretty well. When the computers start selling momentum trading Algo's then pile on. But then the human traders bring it back and end users who are looking for an opportunity to buy a break. Got that break to buy and help bring us back.

[Paul Yeager] There's a couple of buy signals out there right now, but wheat, is it one of them?

[Arlan Suderman] Wheat is struggling because Black Sea. And the problem there is is even with the problems in the Black Sea, we are seeing countries look for alternative sources of wheat. Now, Egypt just announced that they were looking to diversify away from the Black Sea. But where are they going? There's several countries with cheaper wheat than the United States. They're going to first. We don't benefit until those other countries run out of wheat. Hopefully that will happen here before in the next third or fourth quarter of the marketing year.

[Paul Yeager] It's time to plant winter wheat. How much of that's going to happen? More than normal?

[Arlan Suderman] Yeah. Now that we're getting some rain in the plains, once that rain passes through, we should see a lot of wheat go in. We're looking for higher acreage this year. It's going to vary. Midwest to Plains depending on the rains, et cetera., but I'd look for anywhere from some regions 1 to 2% increase in some areas, 8 to 9% increases overall, maybe a 3 to 5% increase.

[Paul Yeager] On the drive North. Missouri to Iowa. Did you see much green at all? Any water in the fields? Anything? 

[Arlan Suderman] Not today, because it wasn't the heavy rain. So the flooding wasn't occurring. We did still see some fields that had some green in them yet, particularly some soybeans that still had a little bit of green, but they're pretty much done now. We needed this rain earlier in the season, so rainfall wasn't a problem. It's the distribution of this season that was the problem.

[Paul Yeager] Put that agronomist hat back on there for me. For me, sir, what does a wet September mean to this crop in particular?

[Arlan Suderman] Well, it does slow it down. It doesn't help the yield that much. Except for the beans. It probably helped a little bigger bean size and beans that we actually could see the bean yield go up. On the other hand, we were drying the corn crop down nicely, maybe a little smaller seed size where we were doing that. But now the rains come in and now it's just, can we get it out before we start seeing the molds.

[Paul Yeager] So the mold is an issue. There's stocks issues, quality. Are you hearing any of that?

[Arlan Suderman] Hearing a little bit of it. We hear some every year. I think it's premature to say we have a big problem right now. The forecast models think that we're going to move all this out about the first full week of October. If we do that, I think we'll be relatively well on a national basis with just localized problems.

[Paul Yeager] How much of the action in Washington, D.C., do I need to pay attention with corn in the field, maybe corn in the bin, and plans for 27.

[Arlan Suderman] You always got to watch Washington, D.C.. I mean, policy is driving a lot, particularly the algos are doing it. And really the bigger factor is we have two wars going on in the world right now that are wars on commodity logistics, and money flow is figuring that out. And so they're looking for headlines that will support that. Despite what we saw happen this past week, they had built record long positions in corn and soybeans. And so they were looking for it's harvest time. And to hold something contra seasonally high at harvest time when they have record large positions, you got to have news, something fresh to feed the bulls. We haven't had that yet. Maybe we'll get it first of the week, but I still wouldn't be surprised if we see a more significant drop in corn. You know, a correction. Beans have the strongest story though.

[Paul Yeager] Well, the corn the March contract that's up there on the screen. We're at 565 50. Area 542 is where we printed on Friday. Still a really good price right now. Is there a percentage that should be sold or you're hearing people have sold on this ‘26 crop?

[Arlan Suderman] Well, the problem is the diesel corn ratio. And when it takes a, takes a bushel and a quarter to a bushel and a half to pay for a gallon of diesel, then that's a problem. And so particularly the irrigated guys who are running their irrigation systems on diesel, it's a real problem. So what I'm saying is, look at those deferred contracts. Six months ago, I was saying, look at your fall harvest. Diesel needs because we had such an inversion in the diesel market. Deferred contracts are much cheaper because the market thought this is going to get solved. Where are we now? Even higher prices. But we still have an inversion. But we have a carry in the grain prices. So look at that carry versus the inversion and the diesel. See what you can do for the margin in those deferred contracts. And see if you can work something out.

[Paul Yeager] I want to go back to something you said just a minute ago. Boyce in North Dakota is, I think, listening to what you're saying about the algorithms with the whole market on one side of the boat, is it still a good idea to be long, or might this be a good time to start quietly moving to the other side of the boat?

[Arlan Suderman] So we back up a week. Yeah. A week ago. Yeah, that's really the case. And that's what we saw this last week coming up on the Xi meeting summit. The funds record long positions. They're worried about a surprise. And so they're taking profits. Had they been really short it probably would have gone the other way. So we saw them pull back on that. Now being harvest time, we did some damage to the corn charts. I like the way we finished on Friday, but still we did some damage. It is harvest and if the rains do dry out in October and we get this crop in fast at that point, then I think we have some concerns in corn, but soybeans, there's a lot of end users going to be looking to buy the break in soybeans.

[Paul Yeager] So is there a break coming anywhere in soybeans soon?

[Arlan Suderman] Not I don't think there would be a very big break. And even in corn, I think we'll see export and even some domestic users buying a break, but they'll allow that break to come to them a little bit more because it's not as strong of immediate story in the corn side.

[Paul Yeager] In beans, you mentioned the the rain possibly adding to pods. So with the grain stocks report coming. There's always a tendency, whatever used to happen with reports is out the window. So I guess I'm not really asking you to predict what's going to happen Wednesday. But are we going to start to see some adjustment given what has happened here in the last month?

[Arlan Suderman] On stocks? Now, this would be old crop as of August 31st or September 1st. That's we'll finish out that year with this stocks report. Next thing to watch is the next day our new customer. Got a yield ahead of USDA's October 9th WASDE report. That'll be the next market mover.

[Paul Yeager] Oh I'd easily ask you to say but you want to stay employed real quickly on beans. Before we wrap up looking again, let's look to the deferred side. What are you hearing about people committing to sales in 27 or getting something down?

[Arlan Suderman] You never go broke selling at a profit. So if you see those margin opportunities, you from a business standpoint, you at least need to go somewhere. And I heard it said once, and I think it's very well don't use the Barney Fife marketing method where you think you have to use just one bullet scale into stuff, because we're in a world where one headline can kill the opportunities. So if you see some opportunities, have prepared ahead of time. So when you get that algorithmic headline driving things higher, that you're ready to take advantage of it and do it at that point and start scaling in.

[Paul Yeager] Live cattle market had a couple of headlines this week, one about lower kills, and then you had Ice raids start to percolate out there. What's that going to do to this market?

[Arlan Suderman] Yeah. And surprisingly, we firmed up a little bit on Friday anyway because of it. We are seeing really good demand for the rib cuts. The middle loins. That is helping support it. When you look at the B-50s beef 90, you're really struggling. Similar to the pork product market is really struggling as well, even worse. And we're importing a tremendous amount of beef. And probably one reason we're hurting in those prices. But that so far, we're able to keep pushing the cash price of cattle higher because of the loins. How high? I think what we're doing is we're finding that middle ground, that trading range right now in the cattle market, where if we go high, we increase the imports. If we go low, those imports start dropping and we're finding that value level.

[Paul Yeager] And I'm drawing a blank. If it was an economist or a representative said that the imports that were bringing in for ground beef haven't really contributed to lower prices for consumers yet. So that's weighing on the market as well. Feeder market wise, this is a pretty there's been a little opportunity to fill in some feed needs. Is that happening?

[Arlan Suderman] You really have. And when you have cheaper corn like we saw last week, this past week, that really helped the feeder market as well. We've got two openings now in the border with Mexico, slow going through, inspecting every animal. So that's not really materially contributing to supply yet. That kind of continues to slowly ramp up.

[Paul Yeager] Hog market report yesterday ended up being most likely viewed bullish. I think it was inventory was down 2%. So was that a bullish report.

[Arlan Suderman] Yeah it was supportive. The the pigs per litter was again higher. But the farrowing were down. And we've lost some of the incentive to feed to heavier weights. So now we're pulling the weights down. I think USDA is going to have to ratchet down their 2027 production numbers.

[Paul Yeager] Before we go fuel and diesel. Is there any help for anybody? Is there any policy that's going to save us right now?

[Arlan Suderman] Well, I think we'll probably see some action, whether good or bad. We'll see some action ahead of the election to limit exports of diesel. Probably not a ban, but a limitation closer to what level we were exporting before, because we produce more than what we consume in this country. And so we've always been exporters, but now we're exporting a lot more than that. So we'll probably try to pull it closer to that level so we can keep the refineries going to produce gasoline. So gas prices don't go higher. That'll probably be a temporary thing. We still have to settle things into Black Sea. I don't think we're anywhere close to that. We have to settle things in the Middle East. We may be a little bit closer to that, incrementally closer to that, at least on a temporary basis.

[Paul Yeager] Well, incrementally. We're out of time. Arlan, good to see you. Thank you so very much.

[Arlan Suderman] Thank you. Paul. 

[Paul Yeager] Arlan Suderman, everyone. And you've been watching our market analysis. If you are watching online or on the PBS app, we are going to stay right here and continue this discussion in market. Plus, that's our online only segment. By the way, there's a little surprise coming in that find it wherever you get your podcasts or at Markettomarket.org to watch, listen, or read. Each Monday, we ship out some behind the scenes information on the program that you won't see anywhere else. Subscribe to the Market Insider newsletter so you're never the last to know. Subscribe on our home page of Market to Market dot next week. A story of Midwest cities growing. While some rural areas are left behind. Thank you so much for watching. Have a great week.

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