Market to Market - March 24, 2023

Market to Market | Episode
Mar 24, 2023 | 27 min

On this edition of Market to Market ... better data on the Phase One trade deal between China and the U.S. The UN issues a last chance warning on climate change. Plus, putting pets under the spotlight in the war against antibiotic resistance. And, market analysis with Dan Hueber.


Coming up on Market to Market - Better data on the Phase One trade deal between China and the U.S. The UN issues a last chance warning on climate change. Plus, putting pets under the spotlight in the war against antibiotic resistance. And market analysis with Dan Hueber, 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


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.

This is the Friday, March 24 edition of Market to Market, the Weekly Journal of Rural America.

Hello. I’m Paul Yeager.

As the U.S. fights off the worst inflation in four decades, the upheaval in the financial system may lead to an unlikely ally in the battle - a cutback in bank lending. 

With tighter standards likely occurring in the future, fewer loans would mean less spending by consumers and businesses, in turn making it harder for companies to raise prices, thereby reducing inflationary pressures.

The Federal Reserve eased back on the size of its latest interest rate hike. The Fed announced only a 25 point rate hike this week even as two major banks collapsed this month. 

Buyers in the housing market took advantage of a drop in mortgage rates to boost the existing homes side of the ledger with a 14.5 percent increase last month - the strongest pace in half a year and ending 12 consecutive months of losses. 

New homes in February were flat after an adjustment lower on January’s reading. 

The Commerce Department reported Friday orders for durable goods were down 1 percent, making it four reports with fewer orders of items meant to last three years or more. 

The trade relationship between the U.S and China can be classified as complicated.

Nearly four years ago, President Trump ratcheted up pressure on China in the form of a Phase One trade deal.

This week, new data sheds light on the results of that action. 

Peter Tubbs reports. 

It appears China may be on the road to less dependence on U.S. imports. Recent signals indicate that there is an increasing reliance by American farmers on the Chinese marketplace while the world’s number two economy has been steering away from U.S. goods. 

A report released this week by the Peterson Institute for International Economics, a Washington D.C. think tank that advocates for increased global trade, shows that trade volumes between the world’s two largest economies are proceeding towards further decoupling.

According to the report, as the dollar value of American exports to China hit record levels in 2022, the underlying volume of goods was smaller in size. In 2009, 13 percent of American agricultural exports were destined for China. By last year, that percentage had risen to 19 percent. Over the same period, Chinese agricultural imports from the United States dropped from 27 percent to 18 percent as America lost market share to other nations. 

The Peterson Institute report also indicated that China failed to meet its Phase One purchase agreements. The total value of imports last year were only slightly higher than 2017 levels, almost a year before the Trump Administration began a trade war. China’s purchase history since 2017 also lags behind trendline growth in American exports to the Middle Kingdom.

Both countries have largely maintained the heightened tariff levels established during the peak of the trade war that began in 2018. For Market to Market, I’m Peter Tubbs.

Weather warnings from Washington to Arizona are nothing new, but the types and severity are rare.

Evacuation orders were lifted in Arizona late this week as heavy rains began to dissipate. 

The severity and frequency of weather events like these have scientists sounding the alarm on a global scale.

David Miller has more.

The top panel of United Nations scientists said on Monday that humanity is close to its last chance to prevent the worst effects of climate change.  To take advantage of that last chance, those same scientists are calling for a massive two-thirds slash to carbon pollution and fossil fuel use by 2035.

The Intergovernmental Panel on Climate Change released its sixth report this week as dramatic flooding and drought around the world has increased.  

António Guterres, United Nations Secretary-General: “Humans are responsible for virtually all global heating over the last 200 years.” 

The United Nations Secretary-General took a more direct route calling for an end to new fossil fuel exploitation and for rich and poor countries to quit using coal, oil and natural gas by 2040. 

The 2015 Paris Climate Agreement, of which the U.S. is currently a signatory, calls for pollution reduction goals to be made by 2035. There is also a globally accepted goal of limiting warming to 2.7 degrees fahrenheit above pre-industrial levels.

Inger Andersen, Executive Director of the United Nations Environment Programme: "Climate change is here now. It tells us that climate change is a real threat to human and planetary wellbeing. It tells us, of course, that these - human and planetary well being are one and the same. It tells us that we are very, very close to 1.5 degrees limit and that even this limit is not safe for people and for planet. "

For Market to Market, I’m David Miller. 

Back in 2018, the FDA unveiled a new 5-year plan for supporting antimicrobial stewardship in veterinary settings. In June of this year, the plan becomes policy in order to help combat AMR or antimicrobial resistance for both animals and people. Over-the-counter access to many antibiotics will be changed to distribution by a licensed veterinarian in just a few weeks.

Much attention has been focused on the agricultural side of the equation but pet health has become a priority in the animal care community.

Colleen Krantz explains in our Cover Story. 

For nearly a decade, the nation’s spotlight has shone squarely on livestock when it comes to antibiotic use in animals and concerns about resistant bacteria. While U.S. regulations implemented in 2017 helped drive down the sales of certain antibiotics for use in livestock by 38 percent between 2015, the peak year, and 2021, concerns about bacterial resistance have not eased.

In response, the European Union in 2022 created greater powers in Europe that would allow them to withhold certain medically important antibiotics from animals. The European Union didn’t focus only on livestock, but included man’s best friend as well as their feline counterparts and other companion animals. 

Dr. Jennifer Granick, associate professor, University of Minnesota, College of Veterinary Medicine: “We don’t have those restrictions in the United States right now but there is concern that if we don’t take very good care about the way we are using antibiotics, that we are going to have problems not only with treating our veterinary patients, but in human medicine as well.”

Pets have not been a primary focus of the U.S. Food and Drug Administration when it comes to preserving the effectiveness of antibiotics, particularly those also used to combat disease in humans, but that may soon change. The FDA declined Market to Market’s request for an interview but sent a written statement that said: 

“To date, the majority of FDA’s Center for Veterinary Medicine judicious use policies have been focused on food-producing animals. However, as part of FDA’s 5-year plan, Supporting Antimicrobial Stewardship in Veterinary Settings, CVM intends to develop and implement a strategy for promoting antimicrobial stewardship in companion animals.”

Researchers say that more than 60 percent of the roughly 1,500 known pathogens that affect humans can be transmitted between animals and humans.

Dr. Jennifer Granick, associate professor, College of Veterinary Medicine, University of Minnesota: “It is pretty new that people are starting to evaluate antibiotic use in pets. I think the reason why food animals have been the focus so long is because they are large so the actual amount of drug per patient is more for, say, a cow than it is for a tiny little Chihuahua. But the thing about companion animals that I think people are starting to key in on is that they share the same environments that we live in. So we have cats and dogs living in our house. We have cats and dogs oftentimes living in our beds too. They sleep with us. We share ice cream cones with them. So the interactions between those animals and humans is actually a lot closer, which means that we are likely sharing bacteria sort of in and on our bodies with those animals much more closely.”

Dr. Granick is one of three women behind the Antimicrobial Resistance and Stewardship Initiative at the University of Minnesota’s College of Veterinary Medicine. The campaign, partially supported by an FDA grant, provides information to vet clinics and performs research related to antibiotic prescription practices in pets. 

As bacteria mutate or adapt to survive treatment, certain antibiotics are at risk of becoming ineffective. At the University of Minnesota’s small animal vet clinic, which handles some of the state’s more complicated cases, they have seen a dramatic increase in pets with infections associated with resistant bacteria.

Dr. Jennifer Granick, associate professor, University of Minnesota, College of Veterinary Medicine: “I certainly have seen that in practice where the human has an antibiotic-resistant infection and a dog that lives with that human comes into us and has an infection in maybe a different location of the body, but with also the same organism, the same resistant pattern….So the closer we are in contact with those animals, the greater the risk. And we’re not going to get rid of our pets, right? They’re part of our wellness. So what we need to do instead is be really careful about how we’re treating our pets because we have to recognize that we’re not just treating the pets, we’re kind of treating the whole household in a way.”

If pet owners are desperate to heal a sick cat or dog, however, Dr. Granick says they may pressure veterinarians to prescribe antibiotics that may not be the best answer.

Dr. Jennifer Granick, associate professor, University of Minnesota, College of Veterinary Medicine: “We created a handout that they can utilize and alter as they see fit, but the headline of the handout that goes home with the pet owner is: ‘Your pet does not need an antibiotic today’ with an exclamation point. It’s like a celebration, you know.”

One southern Minnesota clinic that has collected data for the university’s research is Heartland Animal Hospital in Owatonna.

Dr. Anna Wildgrube, Heartland Animal Hospital, Owatonna, Minnesota: “There’s a lot of buzzwords associated with large animal production, a lot of those being: antibiotic resistance, antibiotic use, your meat being safe or not safe. And, of course, everything that’s in the food chain is safe because of the withdrawals… So the challenging part is when you transfer that down to dogs and cats. Dogs and cats aren’t in our food chain… so it makes it a lot different for people and they don’t realize that antibiotic resistance can happen – or antibiotic abuse to be truthful – can happen in the small animal world as well.”

Dr. Wildgrube says they are happy to get university updates on the best practices for treating various illnesses, particularly if an antibiotic has been proven unnecessary.

Dr. Anna Wildgrube, Heartland Animal Hospital, Owatonna, Minnesota: “As veterinarians, we need to balance people’s expectations of their problem, as well as offering solutions to the problems. And it’s not always to reach for antibiotics.”

Pets are not the only overlooked group of animals. Wildlife can be carriers or victims of resistant bacteria.

Dr. Anna Wildgrube, Heartland Animal Hospital, Owatonna, Minnesota: “The great part about veterinarian medicine is that as we gain more information, we can help do our job better….What would be great if it were to happen coming down the road would be suggested guidelines for antibiotic use as veterinarians… as far as having a duration of antibiotic and an antibiotic choice that would be most appropriate for the condition you’re seeing. That would be handy. ”

Wildgrube says antibiotics are critical to controlling certain illnesses, and the cost of losing that tool is too high.

Dr. Anna Wildgrube, Heartland Animal Hospital, Owatonna, Minnesota: “If we didn’t use antibiotics in the world, there would be a lot of death for people and for animals.” 

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

Next, the Market to Market report. 

China kept buying U.S. corn which helped boost export sales and rain is forecast for the Plains this weekend. For the week, the nearby wheat contract dropped 22 cents, while the May corn contract added 9 cents. Soybean oil tried to keep the complex positive in the face of continued fund liquidation of long positions. The May soybean contract sold off 48 cents, while the May meal contract lost $20.90 per ton. May cotton shed $1.29 per hundredweight. Over in the dairy parlor, April Class three milk futures added 82 cents. The livestock market was mixed as April cattle improved 67 cents. April feeders added 15 cents. And the April lean hog contract cut $2.70. In the currency markets, the US dollar index lost 62 ticks. May crude oil increased $2.69 per barrel. COMEX gold went down by $6.80 per ounce. And the Goldman Sachs Commodity Index gained more than 10 points to settle at 549 even.

Yeager: Joining us now is regular market analyst, Dan Hueber. Hey, Dan.

Hueber: Hello. 

Yeager: You wrote this morning, kind of caught my attention, looking at the week's numbers as a whole doesn't tell the whole story every week, this week very much so because wheat was decent Friday. It was just a bad week. 

Hueber: Well, primarily a bad week for Chicago wheat and more specifically soybeans. Soybeans finally, it's kind of a long time coming. The bean market has held in for quite some time on the thoughts of how the problems are happening in Argentina, somewhat ignoring the decent crops coming in Brazil. But ultimately we knew the demand was going to start shifting back to South America, soybean sales from this country have literally dried up and moved over to corn thankfully but beans kind of got their day of reckoning here. 

Yeager: Well, then let's stick with beans. Let's keep going with the bean market then because that was the big story. I have six questions about beans, in fact. I'll get to one in a moment. But I want to ask you about the nearby first. Have we missed the opportunity for selling at a profitable price? 

Hueber: Well, I guess you have to define profitable. I don't know if it's necessarily unprofitable price even at today's values. But yes, I think we probably missed what would be the high of the market. All of that said, I think all of these markets a little bit unusual to take markets this harshly lower in the month of March. Oftentimes you really think about that as a period where we're really seeing a little better prices that you can sell into. We've done just the opposite this year. I tend to think we'll probably have kind of a counterseasonal thing where we'll have a bottom here by the end of the month and get past these reports on the grain stocks and the acreage numbers and then I think we've probably got a little risk premium back in here because we've kind of taken it out at this point. 

Yeager: We've kind of been counterseasonal for quite a while. The last three years nothing seems to fit the way it is. Who knows what the new norm is. But I do know that something that is normal is that Phil in Ontario, Canada has a question for you, Dan. We're going to go to that right now. Phil is asking you, Dan, are soybeans the new wheat? And what do you see ahead for November '23 soybeans? 

Hueber: I don't know if I would quite put it in the category of the new wheat yet. Yes, South America should be really the dominant producer of soybeans moving ahead. That said, as we already know, Argentina a disastrous situation corn and beans this year so that really has kept a floor under our prices. But yes, realistically I think we push more and more towards producing corn in this country. The biofuels or the renewable fuels could change that in the years ahead but I don't think we're quite there yet. So, beans are, we're seceding the production of that to other parts of the country, other parts of the world. 

Yeager: We'll go to corn then and talk about China buying, kept buying. Enough to give us a rally on the week. Does that continue?

Hueber: Well, I was just going to say, I tend to think it's going to be somewhat temporary. It was rumored they probably bought upwards of 3 million metric tons of corn. It looks like that is probably going to be pretty much on the target. Beyond there something that really hasn't gotten a lot of attention but news services from China say that African swine fever is a real issue out there again and they think in the northern parts of the country it could be as devastating as it was back in 2017, 2018. If that's the case it really destroys the feed market in China. So, something worth keeping a very close eye on certainly. 

Yeager: So, maybe that is something for soybeans to rally on if that's truly the case for a feed source over there? 

Hueber: Well, of course it would be a negative input, less feed demand -- 

Yeager: Oh, I see, because there would be less animals. I get what you're saying. Let's finish up with corn then. What do you see for kind of a window here as we look ahead at these prospective plantings coming? 

Hueber: Well, again, the acres numbers that we're seeing so far mirror pretty closely to what the USDA published in February, around 91 million corn. The average trade guesses are a little bit higher. I think the USDA published a statistical number of 87.5 million acres. I think some of the trade numbers are coming in a little bit over 88. I'm actually a little bit surprised, maybe not now after we've seen prices break the way they have, that we didn't see a little bit better pick up in the beans, which comes back to Phil's question that maybe people are less interested in competing with South America on the beans and you want to focus more on the corn. So, all of that said, those numbers are good. That's a higher acreage overall than we planted last year, particularly in the corn if we came in at 91 million acres. It's still -- by no means am I bullish on the way the structure is right now -- I think after two years of major rally these markets are just tired. They're not going to respond to bullish news as they did two years ago. So, but all of that said, if there is a problem we're running a very fine line in all of these commodities worldwide, wheat included even though the wheat has had a little rough time of it here recently. 

Yeager: But, wheat had some fresh news this week. Russia we had this deal that was supposed to happen over the weekend, then we also have rain coming in the U.S. impacting our size of crop. Which one is the bigger pull on this market right now? 

Hueber: Well, at this point in time I think the uncertainty of what we have ahead is probably going to be the pull on the market. We've really taken the risk premium out, we've basically I think look at the assumption that everything is going to go great, we're just going to have an average crop, an average growing season out there and I think at this juncture in the year that's a little bit premature to feel that comfortable that we're not going to have some hot spots, some trouble areas out there, particularly we know that the Midwest looks like it's in pretty good shape, we've got extra moisture, but the South and Southwest is still a problem area. 

Yeager: You mentioned Chicago wheat earlier. Give me a little bit of range on some wheat in general moving forward here in the next two weeks. 

Hueber: Again, in all of these I think longer term we're probably, unless we do have a crop issue, we're probably going to see lower prices. But I think realistically it's not unreasonable to think wheat could rally 50, 75 cents from current values, which again would set up some, I hope, good opportunities to sell for new crop. 

Yeager: Get us back to what we had around the turn of the year. We just haven't, those were good prices. 

Hueber: Certainly, certainly. 

Yeager: Livestock wise, what do you see in live cattle? Because I keep talking to these analysts that sit over here and discussing the way the economy goes, the way live cattle goes. Are you in that camp? 

Hueber: The economy is going to be the kicker in there. Granted, we have maintained some great levels on the cattle market. We know the inventories are ridiculously low as far as from a historical standpoint. But here again, every consumer you talk to, every report you read is pushing back I just can't believe how much my food bill has gone up. So, I think particularly if we start to see the economy start to get tickled a little bit we could see that demand pretty rapidly. Granted, poultry is expensive, eggs are expensive, pork is not as expensive but there's not a whole lot of alternative right now. So, I think if anything it's probably people just cut back a little bit and go for the lower quality cuts and try to stretch those dollars out. 

Yeager: So, do you see -- this week the boxed beef suffered a little, or softened a little, I shouldn't say suffered, but softened. Do you see that trend continuing? 

Hueber: Oh, again, it's going to really depend on what we see at the retail end of it and the export end. Exports in beef have not been, they have not been as strong as pork but they have been respectable so far so that probably keeps a foundation under there. Beef is the one that probably has a greater risk of a breakdown. But so far I think it has surprised everybody on how well we've held in there. 

Yeager: Feeders do you see reaction from last week's cattle on feed report leading us early in the week? And what was leading us at the end of the week? 

Hueber: Well, later in the week I think of course they rebounded the grains and the feedstuffs, which I think that feeder market can just pretty well play off the corn market for the time being. So, if we turn corn higher it's going to be a detriment to the feeders. 

Yeager: But corn was the only one that was higher this week. 

Hueber: Well, corn and Kansas City wheat, of course. Kansas City wheat did jump. But corn had looked like it was trying to put in a base, it came down into some great support levels and once again, I think we have with that demand we've seen here shape up, not that that necessarily is going to continue on, but that thread is in there. If we push corn down to these levels, particularly if we're not seeing the dollar scream back to the upside, sure we're going to stimulate some demand on a worldwide basis. 

Yeager: Do you see any resolution to the dryness in the Southern Plains happening, has happened that will help cattle feeders, cattle producers? 

Hueber: Good question. I know they're talking about El Nino coming back in, which if that actually translates into moisture coming in there and getting improvement in the pastures, boy only time will tell. I guess I try to shy away from too many weather forecasts. 

Yeager: How about a forecast on pork? What do you see in hogs? 

Hueber: Hogs I think have probably been destroyed enough to the downside for the time being. That said, even with a corrective rebound we're still looking at 2% to 3% more pork. And again, unless we see some kind of tremendous resurge at the retail side of it I think the counterseasonal again we're probably looking at defensive pork trade into the summer months. 

Yeager: But we're about to get into those summer months and we're going to start buying stuff to grill. I grilled this week. It was warm enough. We're almost there. 

Hueber: You know, actually I did as well yesterday. But I'm not, I don't have that on the menu every night here just yet. 

Yeager: Getting close though. 

Hueber: Right. 

Yeager: All right, Dan Hueber, thank you so much, appreciate the time. 

Hueber: My pleasure, thank you. 

Yeager: Good to see you. That will do it as we put a pause on this analysis and continue our discussion about these markets in our Market Plus segment. You can find both the analysis and the Plus on our website of Both of these resources, by the way, are free. Our Facebook page is another gathering place for our stories as well as calls for you to contribute to the program. Give our page a like @MarkettoMarketShow. Next week, we bring back the panel discussion format for a closer look at the planting intentions as well as the quarterly grain stocks reports. Thank you so very much for watching and 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.