Market to Market - Apr. 22, 2022

Market to Market | Episode
Apr 22, 2022 | 27 min

Cold and wet conditions stall planting progress. The global economic ripple effect of the war in Ukraine. Pushing through the pitfalls of urban farming. Market analysis with Jeff French.


Coming up on Market to Market -- Cold and wet conditions stall planting progress. The global economic ripple effect of the war in Ukraine. Pushing through the pitfalls of urban farming. And market analysis with Jeff French, next.


What's the most complex industry on Earth? It's not genetics, or meteorology, or logistics. It's a business that involves them all. It's farming. Thank you, farmers, from Pioneer.  


Tomorrow. For over 100 years we have 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, April 22 edition of Market to Market, the Weekly Journal of Rural America.


Funders: ODD Numbered Show – Pioneer PION1915 AND Grinnell

Hello, I’m Paul Yeager.

Hope springs eternal. 

This year, the Western Plains just wants some rainfall.

Areas east of the Mississippi River and the Southeast are looking for a window of dryness. 

Fieldwork - let alone planting - has been on a slow pace. 

Peter Tubbs has more.

The nation’s corn and soybean crops are off to a rain-delayed start.

While the USDA’s Crop Progress report shows corn and soybeans only a few percentage points off the five-year average pace,  another wet week in the Upper Midwest will push the start of planting close to early May. 

Planting progress stands at zero in Indiana, Illinois, Wisconsin, Iowa and Minnesota, which combined represent 51 percent of the corn and 47 percent of the soybean crops annually. 

Delayed producers are finding their patience beginning to be tested.

Tim Maher, Agrivision, Hamburg , Iowa: “A week ago I’d say it kind of jokingly, to hear more recently they’re getting frustrated, they’re getting antsy, they want to get a crop in the field. With the way the markets are right now, they don’t dare take a risk to put a crop in the field and to have to do it twice. A lot of them are holding out, but a few are going, and going ahead and getting a start on it.”

John Askew, Farmer, Thurman, Iowa- “Patience wins. Patience brings yield. So take your time. We all worry about if we are doing the right thing or not, or whether we got them in at the right time, but with the temperatures the way they are right now, we do furrow depth and we also do four inch depth, we check it ourselves, I just don’t feel comfortable putting my expensive seed in the ground right now.”

Snow was a major barrier in North Dakota last week with several feet of snow with more in the forecast this weekend

Paul Thomas, Velva, North Dakota Producer: It's going to be a while until we can warm up and then then we got to rewarm that ground up and dry out. You know what are going to be inevitably some potholes which quite honestly, we're gonna be thankful for coming off of last year's devastating drought that we have.”  Despite the current wet conditions, crops in the western half of the U.S. will be planted into drought conditions. The National Weather Service’s Climate Prediction Center Sees drought continuing for much of the country, and worsening in the western corn belt.

For Market to Market, I’m Peter Tubbs.

New home builders keep hammering away at demand. 

The Commerce Department revealed a 0.3 percent gain last month in new housing starts. This is the highest annual rate of building since June of 2006. 

A rise in mortgage rates slowed the pace of existing home sales in March. Record-high prices also contributed to the 2.7 percent drop. 

The Rural Mainstreet Index reported a reading above growth neutral for the 17th straight month. However, the rate did drop more than three points to a reading of 62.

CoBank‘s Knowledge Exchange predicts Russia’s invasion of Ukraine will not only impact this year’s trade in soybeans, corn and wheat, but will add to volatility for the next two to three years with disruptions in planting, harvesting and exporting grain.

CoBank isn’t alone in their assessment as major players in the banking system released their annual reports. 

Josh Buettner has more. 

Robert Arguelles, Bernalillo County Fire Department:  “This week, global financial authorities downgraded their outlook for the world economy through 2022 and 2023 – a domino effect of high energy prices and food shortages tied to Russia’s war in Ukraine and the lingering threat of new coronavirus variants.

Pierre-Olivier Gourinchas/Chief Economist – International Monetary Fund:  “The latest lockdowns in China could cause new bottlenecks in supply chains.  In this context, beyond its immediate and tragic humanitarian impact, the war will slow economic growth and increase inflation.”

As the United Nations reports - over 5 million refugees have now fled Ukraine.  Russia’s invasion and subsequent humanitarian crisis have helped sink global growth estimates well below a 6 percent expansion in 2021.  The International Monetary Fund forecasts Russia’s sanction-battered economy will shrink 8.5 percent this year while Ukraine’s will plummet by 35 percent. 

Kristalina Georgieva/Managing Director – International Monetary Fund:  “We are downgrading 143 countries.  This is 86 percent of global GDP.”

IMF officials say Europe, heavily dependent on Russian energy, will bear the brunt of economic fallout, with collective growth at just 2.8 percent this year.  China is set to drop to 4.4 percent in 2022, with the U.S. down to 3.7 percent – where inflation is running at a four-decade high.

Mary Heimann/Alameda, California:  “Poor people depend on coming here.  Like, it’s something we need every single week.”

While the risk of extreme poverty exists for tens of millions in nations dependent on Black Sea exports – particularly Russian fertilizer – pundits warn developed nations will feel the strain.  Consumer prices are expected to jump nearly 6 percent over the next 12 months.

Dr. Michael J. Puma/Research Scientist – Columbia University:  “The number of people facing food insecurity has increased over the last year, especially after the pandemic.  I think it is over 800 million people.”

The World Bank announced their largest set of commitments ever to the planet’s poorest nations with a 15-month, $170 billion response package.

David Malpass/President – World Bank:  “The fertilizer and energy are critical for the crop cycle, so they’re building on each other and creating a food insecurity crisis that will last at least months and probably into next year.”

For Market to Market, I’m Josh Buettner.

The end of 2021 brought one record after another for selling farmland. Once $22,000 was breached, sales progressed higher before topping out at $26,000.

Finding farmland to buy is a challenge and so is purchasing lots in town. A hot housing market has again made development opportunities allusive. 

Abandoned urban lots serve as an opportunity - including the chance to turn some tracts into places for growing food inside the city limits.

Josh Buettner reports in our Cover Story. 

Monika Owczarski cultivates her inner-city community from the ground up through urban farming.

Monika Owczarski/Owner – Sweet Tooth Farm/Des Moines, Iowa:  “Where we are standing was a redlined neighborhood.”

After moving into a historically underprivileged location near downtown Des Moines, Iowa, the young wife and mother also started the city’s first community fridge and pantry – kept afloat by volunteers who share her commitment to eradicate food insecurity. 

Monika Owczarski/Owner – Sweet Tooth Farm/Des Moines, Iowa:  “The main differences between urban farming and gardening are probably scale, succession and selling.”

The former social worker says fresh, chemical free produce should never be considered a luxury item.  Her Sweet Tooth Farm accepts food stamps and other assistance, shares farm implements with neighbors, and operates, primarily, right next door.

Monika Owczarski/Owner – Sweet Tooth Farm/Des Moines, Iowa “When we moved here, this was Royal Park.  The parks department actually still owns this space.  We are stewards of this lot.”

Her push to convert the rundown spot to small-scale agricultural use impressed the city’s Director of Parks and Recreation, Ben Page, who says it’s a first in his department’s 125 year history.

Ben Page/Director – Parks and Recreation/City of Des Moines, Iowa: “She’s helped so many people.  And I think it wouldn’t be a surprise if I tell you Des Moines is not a wealthy city.  I mean, we talk about 80 percent of our kids on free and reduced lunch.  Another goal of the city was to find ways to stop these food deserts, and to help people find local produce and healthy food.  And you point to this as probably one of the successful things we started that movement with was Monika.”

Despite local accolades, Owczarski’s plan to expand from 1 to 3 acres was nipped in the bud this summer when another city division informed her they would not renew leases on 2 other parcels of industrial land she’d acquired - both unused since the 1970s. 

Monika Owczarski/Owner – Sweet Tooth Farm/Des Moines, Iowa:  “It’s quite a precarious position to be in.  The explanation we were given is that the City of Des Moines just doesn’t have enough undeveloped land available for people.  So they want to have it ready in case someone ever wanted to build on it.”

In a June email to the Mayor and City Council, Des Moines’ Director of Development Services stated efforts to redevelop, expand the city’s tax base and employment opportunities were behind the decision – reiterating such properties are intended for development purposes in the long term.  Owczarski says officials offered up another piece of land, but she found it inadequate for various reasons.

Monika Owczarski/Owner – Sweet Tooth Farm/Des Moines, Iowa:  “This might sound forward or blunt, but it is very easy to make a graphic or a hashtag about supporting local farms, or shop local, or even about healthy eating.  It’s much more difficult to kind of put your money where your mouth is…and make decisions that potentially are not as lucrative, financially, for the city, but could be exponentially better for the community in real terms.”

While her initial model is rather unique to the area, nationwide many urban gardeners have run afoul of what they call myriad hazy provisions as local governments adapt. 

Jennifer Zwagerman/Director – Agricultural Law Center/Drake University/Des Moines, Iowa:  “When we talk about the laws and the policies that impact how we produce our food, who produces our food, urban agriculture is definitely a growing part of that discussion.”

Jennifer Zwagerman is the director of Drake University’s Agricultural Law Center in Des Moines.  In addition to educating the next generation of attorneys, Drake publishes research and information on issues impacting food and farm production. 

Jennifer Zwagerman/Director – Agricultural Law Center/Drake University/Des Moines, Iowa:  “Zoning is probably the biggest thing.  And you’re also going to need to look at tax issues.  You need to look at business issues.  How are you planning to operate?  What changes if you expand?” 

Just a few miles away lies a pocket of unincorporated county land, and another neighborhood farm – Dogpatch Urban Gardens – which also felt blindsided by bureaucracy in the recent past.

Jenny Quiner/Owner – Dogpatch Urban Gardens/Des Moines, Iowa:  “Frankly, the hardships we faced, we almost shut down the business.”

Former high school science teacher Jenny Quiner now sells fresh, organic produce to restaurants, grocers, and at her farmstand.  She says though diligent and proactive about local regulations, two years after startup, she faced around $75,000 in commercial storefront compliance requirements when Polk County officials updated her assessment.

Jenny Quiner/Owner – Dogpatch Urban Gardens/Des Moines, Iowa:  “Initially we were deemed a farm stand, which kind of checked the boxes.  My gut says the county probably thought that this will be a small thing that, you know, we’ll just kind of float…  But we ended up being more successful and getting a lot of people through the door, which got more eyes on our business.”

Ultimately, Quiner was able to rally with community donations covering a portion of the funds via a wildly successful online fundraiser.

Jenny Quiner/Owner – Dogpatch Urban Gardens/Des Moines, Iowa:  “That really was an uplifting experience.”

In a statement, the Polk County Board of Supervisors commended local food producers, particularly during the pandemic, and said they’re open to discussing unnecessary barriers to entry while maintaining fair rules to protect resident health and safety.

Jenny Quiner/Owner – Dogpatch Urban Gardens/Des Moines, Iowa:  “The problem we dealt with was when we asked initially if we needed these things, we were told no.”

Quiner says those following in her footsteps should exhaust all legal advice before breaking ground.

Efforts in recent years by Iowa’s General Assembly to address urban farm zoning issues may have lost steam, but cities coast to coast have turned urban decay into bountiful harvests with support from federal grants through USDA.  Others counter land issues which can be micromanaged at the homeowner association level are best dealt with locally.

Jennifer Zwagerman/Director – Agricultural Law Center/Drake University/Des Moines, Iowa:  “The cities that have really worked to encourage this type of activity - they set clear definitions for what they expect.  What’s an urban garden versus a commercial enterprise?  They’re going to define that, so that when you’re thinking about entering this market, or becoming part of this movement – you know what it is that you need to do.”

In the meantime, Owczarski is faced with a setback in production, and may have no way to recoup the $10,000 she spent rehabbing soil on lots the city is reclaiming.  But she says she’ll make it through with support from friends and neighbors. She plans to do her best avoiding similar issues in the search for new properties, but offers a word of caution.

Monika Owczarski/Owner – Sweet Tooth Farm/Des Moines, Iowa:  “Unfortunately, bureaucracy moves a lot slower than the growing season.”

For Market to Market, I’m Josh Buettner.

Next, the Market to Market report.

Global events and actions had a mixed impact on the trade. For the week, the nearby wheat contract lost 31 cents, while May corn added 3 cents. Chinese buying carried the most weight in the soy complex.  The May soybean contract gained 34 cents. May meal dropped by $2.60 per ton. July cotton fell $4.86 per hundredweight. Over in the dairy parlor, May Class III milk futures shed 77 cents. The livestock sector was up. June cattle expanded $2. May feeders increased $2.10. And the June lean hog contract added 30 cents. In the currency markets, the U.S. Dollar index rallied 84 ticks. June crude oil declined $4.48 per barrel. COMEX Gold fell $38.90 per ounce. And the Goldman Sachs Commodity Index shed more than 16 points to finish at 748.10.

Yeager: Joining us now to provide some insight is Jeff French. Jeff, good to have you back.

French: Great to be here, Paul.

Yeager: This wheat thing, you saw in the stories we talked to a couple of corn farmers and then a North Dakota producer, the wheat has been elusive for moisture and to get into the ground. Have we switched -- and then this Russia news of they're going to start exporting again -- are those two the biggest drivers in the direction we're going with wheat right now?

French: Oh absolutely. It's the export market of the Russia story out here this week that they exported 30 million metric tons and they're saying that they could export this year up to 40 million metric tons, which is a huge amount. We'll see if they are able to skirt those sanctions. I think they'll do everything --

Yeager: A lot of unknown destinations or origins of these tankers, right?

French: Yeah, black market type deals. And then the crop ratings, they went down this week. I would have liked to have seen the wheat perform better. It was an outside down weekly close, technically pretty negative. And you look at those new crop prices hovering right around $12. We tried multiple times to get through that and we weren't able to and it sold off here. Looking at the conditions it's hard to be a seller here with how many bushels am I actually going to produce. So I would go on paper here, get some futures sold or get some puts bought, because the wheat looks like it's got lower prices coming.

Yeager: And add in one more wrinkle with the Russians, this whole we're tying the ruble to gold and they're trying to change some of the, they're trying to get around sanctions themselves. Is that at play in any of this global story?

French: Oh absolutely because the global demand is going to be there and I don't see that going away here in the next 12 to 18 months. So the wheat will finds its way to the willing buyers and there will be countries that will be willing to buy the Russian wheat.

Yeager: We had a holiday over the weekend, Easter. We're looking at another holiday, Mother's Day, before we get too excited about corn planting. Let's start with old crop and then we'll get to the Mother's Day anecdote. Do you believe that the rally, that's the big question, is it done in corn in that old crop for now?

French: I think we need to see maybe another week. We have $8 corn this week. We had five days of $8 corn. Since the Board of Trade has been around since 1848 there has been 37 days with corn above $8 a bushel, five of those days were this week. So we are in rare times, rare prices here. If you have some bushels left to sell, take advantage of it. These are phenomenal prices.

Yeager: Do you think people really do have corn left?

French: Yeah I do, I do. I think they do. And you see that in the basis. Some of the basis has weakened up here on this rally. But yeah, I've talked to producers that have old crop corn left right now.

Yeager: Well, let's just do it now. We're going to switch things up a little bit. Tim in Houston, Minnesota actually has a question about basis. He's asking us on Twitter, what are your thoughts on basis, both old and new crops? Let's just stick with corn.

French: Old crop historically very tight here right now. Many places throughout the country are positive basis. Again, it has weakened up here a little bit on this rally but I have no problem locking in the old crop. New crop, you'll have to look at your local area. You know that better than anybody. But historically basis, if you look at the last five years, it's very strong still.

Yeager: You mentioned the new crop, I mentioned Mother's Day. Are you in that camp of I'm not too worried about spring planting progress until Mother's Day?

French: I look at it from a national standpoint. I think you get to -- you look at the last 10 years and by May 8th nationally if we don't have 50% of the corn planted then we are delayed. Does that bring down the bushels in the final yield? We'll have to see what the summer entails weather wise. But I look at that May 8th, we've got to get it in 50% in the ground by then on the corn.

Yeager: Do you put in volatility as the most in play in those next two weeks for new crop?

French: The Monday crop progress reports here in the next three to four weeks are going to be very closely watched. And that Monday night grain trade is going to be volatile. It's volatile already, with prices like this you are going to have big price moves and we've seen that here recently. But volatility is going to be here to stay here for a while in the grain markets.

Yeager: In beans, beans were kind of opposite corn and wheat until today. What changed?

French: Well, the big story here recently has been about the edible oils and it has been about the bean oil rally. And it rallied this week to new all-time high prices, 83, 84 cents a pound. And then overnight, Indonesia came out and says, well we are banning exports on their palm oil. Well, Indonesia is the biggest exporter of edible oils in the world. And then you have the problems going in Ukraine with sun seed. Ukraine sells a ton of sun oil on the world export market. So you're taking about 20% of the world exporters out of the market. So you have this market go straight up, it rallied the beans with it, but Friday's close in the beans was not good at all.

Yeager: The resistance was there at $16, it just couldn't get -- so is this a technical move too?

French: It could have been profit taking. We rallied this thing here in the last three weeks about $1.70 a bushel. I didn't like the fact that it didn't take out the contract highs. We got within five, six, seven cents and then we failed. Was it profit taking? We'll have to see next week. But definitely not a good way to close out Friday. If we have weakness next week I think these beans are coming under pressure here. You look at it, they're $15 beans, 92 million acres going to go in the ground with normal growing conditions, I know that's a big if, we'll have to see what happens, but $15 off the combine sounds very good to me.

Yeager: What percentage should maybe somebody think about selling?

French: I think 25%, 30%. I have no problem with that. It's phenomenal prices.

Yeager: Let's move to the livestock. We had a cattle on feed report today. If you're playing darts, I don't think you want to look where your dart landed?

French: No, it was a big miss. The one that stands out is the placements came in at 100% of last year. The analysts thought it was going to be down at 92%. And actually a lot of the range was below that down at 87%. So a big miss on there. Also the on-feed numbers, 2% higher than last year. We thought we were going to get to an area where we start to work through these animals. But we're going to have some numbers to deal with here through August. We've got that August in that $140, $142 area. These cattle need to be protected here.

Yeager: Well, after the last cattle on feed report we had a major rally in feeders if I remember correctly. Do you expect that action to take place on Monday?

French: No I don't. I think the cattle complex initially will be under pressure and that's the way we rallied, we rallied strong into this. The fats have been up $6, $7, $8 here in the last two weeks. I think we'll be under pressure Monday. It will be important how we close the day out.

Yeager: You're concerned about the slaughter pace in the live cattle?

French: No, slaughter numbers are good. We're staying current, especially with more number of cattle on feed. Also you look at cow slaughter. Cow slaughter is running drastically above last year levels and we are on pace to cull seven million cows, that's the most since 1996. So this herd is getting smaller and that is going to continue here. And fundamentally it's going to be bullish longer term, but right now we have some numbers to work through.

Yeager: All right. In the hog market it looked like maybe some bottom feeders were coming in early in the week. We only finished the week up a couple of cents. Does that signal something to you?

French: No, I like the hogs here. I think if one sector of the hogs here -- we're not expanding anywhere. China is not expanding, the European Union is not expanding, we're not expanding here, numbers are tight, kills are huge, product is going up and I see good, better demand here moving forward. We were in the $130s last year in the summer contracts. I see no reason that we can't be there here this summer in our summer contracts for 2022.

Yeager: Of the three meats that we talk about regularly here, which one of those contracts, which one of those sectors has the most upside?

French: As of right now it would be the hog market.

Yeager: All right. Before we close I need to ask you about crude. Last week we fought off right there at $100 right before. This week we finished off 4% but still above $100. What does that mean?

French: It's been choppy for a month straight. We talked crude here with a couple of clients today. I'll sell crude below $97 and I'll buy it above $113. Really we haven't done much in the last six weeks in the crude market.

Yeager: You don't see any of the expansion that is maybe coming on in Texas or what they continue to produce in North Dakota or any other of these patches that are coming back online as significant?

French: Not in the next 60 to 90 days. I think maybe after that. But right now for today's spot market I don't think that has a bearing right now.

Yeager: Natural gas was off, fertilizer, we're losing some here, are we?

French: Yeah, the natural gas it traded up to a 10 year high this week right above $8 a therm, then broke hard. Again, we'll have to see. The fertilizer thing is not going away.

Yeager: How about we talk about that in Market Plus? I won't hang you out next time in Plus, we have more time. Thanks, Jeff.

French: Thank you.

Yeager: That will do it for the installment of Market to Market. We're going to keep going in Market Plus. As I just mentioned we'll talk about natural gas and your questions. You can find that free on our website of Now, Facebook may feature some strong opinions, but we do try to bring solid content with pictures and stories from our work that we do here. Follow our efforts at MarketToMarketShow. Next week, we look at the roller coaster ride for dry beans and other pulse crops. Thank you for watching. Have a great week.




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Market to Market is a production of Iowa PBS which is solely responsible for its content.

What's the most complex industry on Earth? It's not genetics, or meteorology, or logistics. It's a business that involves them all. It's farming. Thank you, farmers, from Pioneer.  


Tomorrow. For over 100 years we have worked to help our customers be ready for tomorrow. Trust in tomorrow. Information is available from a Grinnell Mutual agent today.