Market to Market - March 3, 2023

Market to Market | Episode
Mar 3, 2023 | 25 min

On this edition of Market to Market, we’ll be looking at a House Agriculture committee hearing where farmers had their say and EPA’s latest run at year-round E-15. Plus we’ll explore how Native Americans are gaining more say over what goes into their shopping carts. And, market analysis with Elaine Kub.


Coming up on Market to Market - We’ll be looking at a House Agriculture committee hearing where farmers shed some light on issues for the new Farm Bill and EPA’s latest run at year-round E-15. Plus we’ll explore how Native Americans are gaining more say over what goes into their shopping carts. And market analysis with Elaine Kub, next.

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.

Sukup Manufacturing. Celebrating 60 years of innovation as a family owned and operated manufacturer of grain storage, drying and handling equipment out of Sheffield, Iowa. Learn more at

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This is the Friday, March 3rd edition of Market to Market, the Weekly Journal of Rural America.

Hello. I’m Brooke Kohlsdorf. Paul Yeager is on assignment.

The Fed continues to receive conflicting numbers from the economy but appears to be committed to the inevitable.

The cost for a shipping container to go from China to the West Coast has plummeted some 90 percent as rates return to pre-COVID levels.

Orders for durable goods fell 4.5 percent in January, taking back most of December’s gains. When the volatile transportation sector is taken out, the core rate - a sign of purchases to come - rose seven-tenths of one percent.

An interest rate hike still appears imminent even if the Board of Governors sees a good jobs report paired with cooling inflation numbers.

A petition from eight Midwestern governors got the EPA to propose a rule for year round sales of E-15. However, the rule limits use to gas tanks in the states where governors pushed for a higher blend rate. Ethanol trade groups and supporters like the rule, but objected to the final approval date of April 2024, which cuts out 2023 summer sales.

Despite a victory for ethanol advocates, there wasn’t much discussion of biofuels among the rural Amercians who brought their concerns to Capitol Hill. Peter Tubbs has more.

This week, the House Agriculture Committee held a hearing focused on the rising cost of agricultural inputs, and where the 2023 Farm Bill can help provide certainty to America’s farmers.

Rep. Don Bacon, R-Nebraska: “Pesticides are fertilizers were on tripled or quadruple in cost. Is it gotten is it become better for our farmers right now in this area? And what can we do to do better?”

Corey Rosenbusch, The Fertilizer Institute: “You know, as I mentioned in the testimony, we have seen a softening in the market recently. So prices have come down in some cases half the cost of what they were last year. Several reasons for that. One, I think farmers are waiting and a wait and see approach. And so that's off in the market a little. But some of the global markets, as I referenced, have also opened back up. So you see a lot more product moving that impacts that that supply and demand all over the world, whether it's India or Brazil.”

Rep. Abigail Spanberger, D- Virginia: “So could you just talk about some of the current legal barriers and liabilities that face farmers who try to fix their own equipment that they own or that have to rely on a third party to do so?”

Rob Larew, National Farmers Union: “This barrier. We've had promises in the past from the equipment manufacturers that they will allow access to this information and allow some independent repair. That, however, did not come through. So we need to see laws on the books to enforce that right to repair.”

Rep. Don Bacon, R- Nebraska:  “Is China meeting its trade agreements that they made with the previous administration? Do we need to be doing more to hold their feet to the fire?”

Zippy Duvall, American Farm Bureau Federation: “You know, the phase one trade agreement was huge for agriculture and they made it totally. No, and they didn't made it in the second year of it. But that trade agreement was really helpful to our farmers and ranchers and put us in that market to be able to sell to them. And we need more trade agreements like that. But we need to hold their feet to the fire, just like we need to hold Mexico's feet to the fire. When it comes to biotech, in their discussion around not taking our corn.”

For Market to Market, I’m Peter Tubbs

This week, the Biden administration pledged $2.2 billion to pay farmers who have experienced discrimination with USDA lending programs. Secretary Vilsack called the move “another stepping stone in the long march towards justice and an inclusive, equitable USDA.”

The Department is also working to improve relationships with  Native Americans. Through grants now totalling over $6 million, several nations have been given a little more self determination over what goes into their grocery carts.

Colleen Bradford Krantz has more in our Cover Story.

Under two century-old federal treaties, the U.S. government pays for the food given to certain displaced Native Americans. Until recently, however, indigenous groups had little say on what was delivered by USDA to their food distribution centers.

Gary Besaw, agriculture director, Menominee Indian Tribe of Wisconsin: “Slowly but surely we saw that those foods were heavily salted or processed, and we went from being one of the healthiest tribes…and we started seeing that our bodies, the bodies of our ancestors, then reacted negatively.”

To address the problem, a provision in the 2018 Farm Bill provided $3.5 million for eight tribal nations to demonstrate their ability to purchase their own food, an idea known as self-determination.

Samia Hamdan, USDA’s Food and Nutrition Service Agency: “In our…traditional model, the USDA purchases those foods and…ships them to warehouses or facilities on the tribal reservations. With self-determination… USDA and Department of Interior worked together to collaborate on the demonstration project, which gives tribes more control over their food procurement.”

Many of the tribes awarded grants are using the added flexibility to support indigenous farmers, ranchers and fishermen.

Gary Besaw, agriculture director, Menominee Indian Tribe of Wisconsin: “We want to contract and decide where we get our ground beef from, where we get our apples from, where we get other products.”

Two eastern Wisconsin tribal nations, the Menominee and the Oneida Nation of Wisconsin, partnered on one of the self-determination pilot projects. Although the experiment is ongoing, Gary Besaw, the top agricultural official with the Menominee nation, says area native producers have begun to benefit from the self-determination project and from another project known as the Tribal Elder Food Box program.

The new food box venture provides fresh meat and produce directly from area producers to Native Americans who are over age 55 at no cost. The program initially included just the Menominee, Oneida and Red Cliff Band of Lake Superior Chippewa, but now it benefits all 11 federally-recognized tribes in Wisconsin.

Gary Besaw, agriculture director, Menominee Indian Tribe of Wisconsin: “We are trying to slowly build our economy, we’re trying to grow the vendors, we’re trying to understand the system better so we can do that purchasing and create our own fully localized food systems.”

The changes in purchasing practices have benefited Native producers, some who have seen sales increase since the start of the pilot projects, as well as non-Native farmers who can be used as a source if indigenous suppliers can’t meet demand.

Gary Besaw, agriculture director, Menominee Indian Tribe of Wisconsin: “We looked at, for example, some of the catfish that we were getting in our food distribution… and we replaced that with some of the foods from Red Cliff. So we were able to use lake trout filets, whitefish filets and … herring.”

One community member says the Tribal Elder Box program was particularly timely when some tribe members were struggling financially in the wake of the economic slump following COVID.

Gilbert “Andy” Boivin, Menominee Indian Tribe of Wisconsin: “Yeah, I’ve talked to several people that get ‘em and they like it. They think it’s great…. It’s probably two or three meals worth of food that they won’t have to buy.”

However, Boivin says the biggest challenge may be in convincing high school

and college students they might enjoy a career farming, ranching or fishing.

Gilbert “Andy” Boivin, Menominee Indian Tribe of Wisconsin: “A lot of it was just individuals doing individual farming in a garden, you know, but as a nation, our tribe has fell away from it over time…. As far as I know, there is nobody in the last 15 or 20 years that I know of that is interested in farming, you know, and that’s unfortunate.”

An hour to the southeast, the Oneida Nation has built a successful business raising Angus and buffalo, which puts more locally produced meat into the supply chain. The Oneida also raise fruit in several orchards.

Five hours to the north, near Bayfield, Wisconsin on Lake Superior, the Red Cliff Band is seeing the benefits of a fish processing facility launched in the fall of 2020. Because of the federal funds, the Red Cliff Fish Co. has not only added more employees but is paying Native and non-Native fishermen more for their catch.

Daniel Grooms, Business Manager, Red Cliff Fish Co.: “It kind of started out as an idea to provide an opportunity for Red Cliff fishermen, who weren’t always treated as fairly by other places... They would get, again, different pricing. Now that we are here, we technically have brought the market up on this area. As early as 2018 to the last record I've seen, most whitefish prices around here ranged around 30 to 40 cents a pound. Currently, with our buyers, we are at $1.25 to $1.35 per pound… The government funding of these programs is great because now it’s meeting a need where we are providing a healthier protein alternative to some of those other processed fishes or meats… Again, because of these programs, it’s provided an opportunity for a place like this to succeed.”

Tribal leaders across the country are hoping these allocations allowing greater food sovereignty will become permanent with the next Farm Bill.

Samia Hamdan, USDA’s Food and Nutrition Service Agency: We visited the Oneida tribe in Wisconsin, as well as the Menominee Indian tribe. And we did see some of the products. We saw the ground bison, the wild rice and the beef chuck roast, and it just looked amazing…We are fully committed to supporting the restoration of indigenous food and empowering the indigenous agricultural economies and improving indigenous health through traditional foods.”

For Market to Market, I’m Colleen Bradford Krantz.

Next, the Market to Market report.

Kohlsdorf: For traders, the last five days have been a balance between demand destruction in the US and news of reduced harvest yields in South America. Prices spent most of the week in a downward trend but some commodities managed to climb out of their hole by the final session.

For the week, the nearby wheat contract fell 13 cents, while the May corn contract fell a dime. The soy complex followed wheat and corn lower but managed to claw back to nearly even by the end of the week. The May soybean contract was flat, while the May meal contract added $1.30 per ton. May cotton lost 73 cents per hundredweight. Over in the dairy parlor, April Class three milk futures declined by 19 cents. The livestock market was mixed as April cattle added a nickel. April feeders put on $2.45. And the April lean hog contract lost $1.48. In the currency markets, the US dollar index dropped 62 ticks. April crude oil improved $3.36 per barrel. COMEX gold went $40.90 per ounce higher. And the Goldman Sachs Commodity Index jumped more than 16 points to settle at 586.35.

Kohlsdorf: Joining us now is regular market analyst, Elaine Kub. Great to see you, Elaine, thanks for being here.

Kub: It's good to be here.

Kohlsdorf: I know you had to weather some storms to get here.

Kub: Bouncing between blizzards, but here we are, yes.

Kohlsdorf: Here you are. Well, we start with wheat. So, wheat had, it has been in a slump. Wheat futures dropped to their lowest levels since September of 2021 and kind of traded around that low this week. So, is the low in or will it go even lower?

Kub: Well, I couldn't say that it's never going to go lower, but it is certainly a reminder of what a global market it is because that is obviously a bearish trade based on better conditions in Russia or guesses about their willingness to keep things shipping on the Black Sea without disruption. But it's definitely not a reaction to numbers here domestically in the United States. Kansas was actually putting out some crop condition ratings finally for spring going forward and it's like 19% good to excellent ratings of their winter wheat as it is coming out of dormancy and 51% either poor or very poor. So all of the drought in the Southwestern Plains of the United States is very much still affecting the United States wheat prospects. But that's not what the market is trading. The market is trading things from all over the globe. So I believe there is more volatility to come in wheat one way or another and it could be lower. I cannot promise you that that was a low.

Kohlsdorf: Okay, we'll have to wait and see. All right, so our next question is actually from Twitter. So, this question comes from Kurt in Fort Atkinson, Iowa. He asks, with grain prices falling and interest rates climbing and no carry in the market, what incentive is there to continue to hold onto grain, granted it would have been better to sell $6.80 than $6.35? Is the party over for the grain complex?

Kub: I don't think the party is over. I don't think that if someone is very risk averse that they should necessarily listen to Elaine Kub saying this and put all the, bet the farm on this. But I think there's legitimate scarcity for feed grains, for corn specifically, maybe less so for the oil seeds. But if you've got old crop corn sitting in a bin that you feel confident that you can keep in condition going into the spring and summer, all of the basis markets, anywhere there's a livestock industry and anywhere towards the Southwest, shows that there is legitimate scarcity. End users really need to pay up for this grain because there's just not enough of it in the old crop market. However, when you start looking towards the end of 2023, once you get past this next harvest, eventually these commodity markets are always eventually going to fall apart and get back down towards the cost of production. But for now if you've got, like I said, grain sitting in a bin, I don't think the party is necessarily over.

Kohlsdorf: Okay, and what about Brazil?

Kub: Yeah, what about Brazil? Exactly. Brazil, that's another good reason to think that some of these markets will eventually start to fall down and why I'm not quite so bullish for the oil seeds is because Brazil does have this record large soybean crop that is being exported right now. So it is relieving some of that scarcity in the global soybean market. But the global feed grains market still has a lot of scarcity. When you talk about that triple dip La Nina that has been affecting South America, Argentina more so than Brazil, that has been cutting the overall South American production more than the Brazilian record high yields and acreage has been contributing to it.

Kohlsdorf: Okay. Is this a good time to lock in feed costs then?

Kub: Possibly, it's not a bad idea because it has been so flat. We really have not had much volatility in any of these corn or soybean markets until this selloff that we've seen just over the past week that you mentioned the prices that have dropped in the past week. The selloff kind of happened for no apparent reason, just funds I guess taking some risk off the table as they're moving around into other assets. So yeah, that probably is an opportunity to take sort of a mystery in still scarce markets and lock something in.

Kohlsdorf: Okay. So, talking about, you mentioned soybeans, they have managed to sort of weather this storm a bit. There have been some conflicting reports coming out of South America about how much they have. The USDA is saying one thing, the Brazilian government is saying another. So where does it go from here?

Kub: And private estimators -- yeah, it could be anything. Gosh, the cliche is that a big crop gets bigger and that a short crop gets shorter and there is potential for the Brazilian soybean crop to be bigger than 153 million metric tons, which is the last number that USDA came out with. There is a WASDE coming out next Wednesday that could probably come up with a number somewhere near that. But as I mentioned just before, it's the cuts to Argentina that are going to have a bigger impact on that global supply and demand table than sort of your shading one way or the other for Brazil. Kohlsdorf: Okay. Why has the soybean market been able to weather this storm?

Kub: Yeah, it has been really interesting and particularly the new crop soybean market has not had as much of a selloff as the corn or the old crop soybeans did. And it has been interesting, it has sort of been since the USDA put out their first initial acreage projections for 2023 and they were projecting soybean acreage to remain fairly flat going into 2023 at 87.5 million acres, so not a big boost there. And I think that is largely because of the profitability projections but they are so variable depending on where you're going to buy your fertilizer. That was earlier in the program talking about fertilizer prices triple what they were in 2021 but 15% lower now than they were in the fall. So the acreage battle between soybeans and corn is very much up in the air. But because the new crop soybean futures market has been able to hold onto things better than these other markets have, actually the new crop soybean to corn price ratio has improved since those acreage projections came out. It is 2.4 to 1. It is kind of climbing its way back towards normal. So that is something to continue to watch. When you actually get into planting season, the soybean acreage could gain because it could look very profitable in a high fertilizer price environment.

Kohlsdorf: Moving on to cattle, they remain kind of the shining star of the commodities. With warmer weather coming up and the grilling season just around the bend, we hope, what is going to happen Will those prices continue to go up?

Kub: Well, you're absolutely right to point out how it is driven by retail prices for the actual meat, for the beef. And the wholesale beef market has been improving. It has kind of plateaued here just this past week. But it is that improvement in the beef prices and you could also argue maybe lighter slaughter weights that have kept things kind of hot for the live cattle market. Cash cattle traded this week at $163, $165. So, it has been a bullish market and it continues to be a bullish market based on the actual prices for beef as people seasonally look towards grilling season.

Kohlsdorf: Okay, well that takes us into feeders. Those have been high too. Will the bulls continue to have their way?

Kub: Speaking of a hot market, yeah, contract highs for the nearby contracts, but even when you start looking farther out, for the calves that are being born today that are going to be marketed in October, November, you're talking about opportunities to lock in $200 or $220 on LRP contracts. And if you're talking about sale barn prices rather than futures prices, if you've got like a 600 weight reasonably good quality calf in the northern part of the country they were trading this week at $230. So these are very high prices. They're not record high prices. It could go higher than that. We've seen it higher than that in 2014 and that was a timeframe when live cattle prices were different than they are now in beef. Everything has sort of changed about the profitability here. But there is room in this very scarce bullish market for feeders to go higher.

Kohlsdorf: Okay, how much higher?

Kub: I mean, in 2014 they traded to $245 I think. I don't have the number right on top of my head. But there is room for them to continue churning higher.

Kohlsdorf: Okay. Hogs continue to just kind of --

Kub: -- churn, churn.

Kohlsdorf: Okay, so what is going to happen there?

Kub: Well, eventually they have to kind of churn higher too seasonally and it just hasn't been happening. I think it is probably very frustrating to some futures traders in the lean hog market because there is just no momentum. They're just not being able to get any footing to make that seasonal move higher yet. And pork prices equally sort of lackluster. But at some point when you start looking at a May contract at $93, an August contract at $103, but negotiating hog prices are only $78 still. There has to be some reconciliation to that seasonality and start to move higher eventually.

Kohlsdorf: Okay. This is more of a general question. So the Fed meets again next week and if they raise interest rates again how does this all affect just the farm economy, the ag economy?

Kub: Yeah, the biggest worry I think from interest rates is typically people worrying about land prices because pure math, any time an interest rate goes up, an asset price should go down. But for land prices I don't know that that's the case because you could also say that any asset is only worth what someone is willing to pay for it. And there are a lot of people willing to get out there and bid for land these days, investors, farmers obviously. When you have commodity prices, grain prices being what they are today, I wouldn't necessarily worry about interest rates knocking things down. I mean, you worry about operating notes and buying machinery and paying higher interest rates and you don't want to go back to the '80s with double digit interest rates, all of that would be a concern. But as far as its actual immediate knock on effect to grain prices or land prices, I think that the agriculture industry is fairly resilient or fairly immune to weird things like that, although of course there could be volatility from the outside markets.

Kohlsdorf: Okay, we've got a few seconds left, about 20 as a matter of fact. So, fertilizer prices the lowest in two years. Should we lock in? What's happening there?

Kub: I don't know. Full disclosure, I locked in fertilizer prices for my own farm back in September when they were 15% higher than they are now. But it was the right thing to do. From a risk management standpoint I think that was okay. But I think because we've seen natural gas prices come lower and a lot of those first worries that we had when fertilizer prices were tripling have sort of gone away. I believe there is potential for fertilizer prices to continue to move lower.

Kohlsdorf: Okay. All right, thank you, Elaine. Thanks for joining us. We are going to put a pause on this analysis and continue our discussion. We've got more to talk about in our Market Plus segment. You can find those segments on our website of And for those of you watching us over traditional television or via the web, this is the second week of our annual pledge drive. If you believe in the service that you have trusted for nearly five decades, consider investing in your local public television station to keep programs like this one in production. We thank you for your support. Next week, we take a look back at the early days of no till. Thanks so much for watching. We hope you have a great week.


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.

Sukup Manufacturing. Celebrating 60 years of innovation as a family owned and operated manufacturer of grain storage, drying and handling equipment out of Sheffield, Iowa. Learn more at

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.