Coming up on Market to Market -- Congress sends a record amount of aid to Americans both on and off the farm.

Damage done to Lone Star state crops comes into focus.

And market analysis with Don Roose, 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, March 12 edition of Market to Market, the Weekly Journal of Rural America.

♪♪ Hello, I'm Paul Yeager.

One year ago this week, the W.H.O.

declared COVID-19 a worldwide pandemic.

No one person has avoided at least some impact by the virus.

Supply chains have suffered and evolved as they seek different products whether it be lumber, PPE's or vaccines.

The federal government has come to the rescue twice before and now this week a third has emerged.

A record-setting amount is set to head to rural and urban areas.

Peter Tubbs reports.

President Joe Biden: "“I believe this is, and most people do as well, this historic legislation is about rebuilding the backbone of this country, and giving the people of this nation, working people, middle class folks, the people who built this country, a fighting chance.

That's what the essence of it is.

"” The Biden administration kept a campaign promise to voters by signing a $1.9 trillion dollar aid package Thursday, targeted towards relieving economic pain caused by the COVID-19 pandemic.

The bill includes a myriad of funding mechanisms aimed at different segments of the economy.

Most Americans will see a $1,400 payment in the next few weeks, and SNAP recipients will continue to receive additional food dollars through September.

In an attempt to shore up the restaurant industry, $29 billion dollars will be directed towards keeping food businesses alive until immunized Americans can return to eating indoors in large numbers.

An unprecedented $4 billion dollars was set aside to aid farmers of color with debt relief.

Black farmers will see their direct and guaranteed loans with the USDA forgiven as partial settlement for the Pigford discrimination lawsuit settled in 1999.

Local governments who are experiencing revenue shortfalls due to the pandemic will be able to take advantage of a $340 billion pool of funds.

The money also can be used for infrastructure needs such as water, sewer and broadband projects in rural areas.

Rural hospitals and healthcare centers will get a boost under the legislation, which provides $8.5 billion to cover expenses and lost revenues attributable to the pandemic.

Congress was in a hurry to complete their votes on the bill, as the current extension of unemployment benefits was due to run out on Sunday.

With the bill signed, benefits will continue to be paid to the unemployed without interruption.

For Market to Market, I'm Peter Tubbs.

Spring-like temperatures have helped push more customers across the thresholds of local business - only to find higher prices than they saw a month earlier --- Consumer prices jumped 0.4 percent in February as more people hit the road and gas prices registered a double-digit increase.

Without the volatile price swings brought on by food and fuel, core prices moved 0.1 percent higher.

The slow pace is indicating to economists that inflation is in check.

As supplies tighten for oil and other raw commodities, the Producer Price Index climbed 0.5 percent last month.

Other Core prices rose 0.2 percent when prices for items like machine parts, building materials and hardware are removed from the equation.

--- A major storm is forecast to dump heavy snow this weekend on the central Rockies and High Plains.

These locations are accustomed to wild weather swings.

Other locations are not as familiar with days below freezing and when they are, the impact can have a long tail.

The Lone Star State is used to weather challenges of hurricanes and tornadoes, but it was February's deep freeze that has had a lasting effect.

John Torpy has our report.

Last month, an Arctic Intrusion pushed dangerously cold temperatures and winter storms across Texas.

No part of the state's agricultural industry was left untouched.

Sid Miller, Commissioner, Texas Department of Agriculture: "“We have, uh, a variety called Valencia, which is kind of a late orange it's a hundred percent loss.

They were all still on the tree.

"” The citrus crop for the nation's 3rd largest food producer was either damaged or destroyed.

Sid Miller, Commissioner, Texas Department of Agriculture: "”Just the citrus industries, estimated at $310 million, that doesn't really tell the whole story.

Those it's kind of hard to believe where you are, but those, those trees were in bud and bloom for next year's crop./So not only did we lose this crop, we lost the next crop too, so basically two crops.

"” The citrus industry isn't alone.

Texas A&M University Extension reports damage to the winter vegetable crop will most likely exceed $150 million.

According to the Texas International Produce Association, a Rio Grande Valley trade organization whose members grow 60 different commodities, almost every crop was destroyed, with varieties like spinach getting hit the worst.

Dante Galeazzi, CEO & President, Texas International Produce Association: "“Roughly 80 to 95 percent of the industry that was growing greens was decimated.

And by decimated, I mean, nothing.

It's, it's pockets of things that have survived, you know, uh, a few rows of cilantro here, maybe a field of cabbage there, but overall it's those soft leafy greens.

They're things you end up seeing in salads or what we call a warm or super boiling vegetables.

All of those were just, just devastated.

"” As the eight day cold snap that included a blizzard rampaged across the Lone Star state, millions of people were left without power.

Supplies of natural gas diminished as pipelines froze and demand skyrocketed.

The loss of electricity left agricultural operations like green houses, poultry farms, and dairies helpless against the freezing temperatures.

Sid Miller, Commissioner, Texas Department of Agriculture:"” We didn't have any natural gas to pasteurize the milk.

So we poured out a, uh, you know, 14 million gallons of milk, 14 million gallons.

So it just, you know, retail price, three, three bucks a gallon.

So that's, you know, that's, that's over $40 million worth of milk poured down the drain.'

For some dairy producers, the storm cut deeper than just sending profits down the drain.

Sid Miller, Commissioner, Texas Department of Agriculture: "“I've talked to one Dairyman, he had to sell every cow.

Every cow had frostbite every, you know, there, they were just froze.

They're just ruining them.

And a lot of dairyman didn't have to sell the whole herd, but they had cows that, you know, their udders froze, and you're just, you know, they're hamburger now.

"” Dante Galeazzi, CEO & President, Texas International Produce Association: "“For the last 12 months, the Texas farmer has been getting kicked in the teeth.

"” The winter storm's impact is only the latest in a string of setbacks for Texas producers.

The recent combination of weather events are only part of the story as farmers and ranchers are still suffering losses brought on by the economic ripple effect started by the 1-year old coronavirus pandemic.

Dante Galeazzi, CEO & President, Texas International Produce Association: "“It shut down 65 percent of all of their receivers, right?

Uh, restaurants were closed.

Schools were closed.

All of a sudden your, your vacation areas and resorts were closed.

Cruise ships were closed.

So you could only send your produce to, to grocery stores.

If you didn't have a grocery store business or grocery store customer, you had nowhere to go with that produce.

So you threw it away.

"” The livestock sector in the nation's number one cattle producing state took a big hit from the winter storms as well with Texas A&M forecasting damage to touch $228 million.

Texas Farm Bureau President Russel Boening says storms couldn't have happened at a worse time for producers.

Russell Boening, President, Texas Farm Bureau:"” "”Most of Texas was in the middle of spring calving season.

You know, we consider, we consider January and February down here, springtime.

And, uh, so we were caught in the middle of that.

So there was some young stock loss and, uh, you know, now it's, we're, we're just in the, kind of in the assessing, assessing mode and, uh, and, and, and going forward and healing mode, I guess you could say.

"” Boening says the last cold snap he experienced in farming was 38 years ago, but the winter storms and freezing temperatures were a first for him.

Russell Boening, President, Texas Farm Bureau:"” For us, for us, this was a disaster.

And, you know, and, and I know weather like this hits other parts of the country, and it's not a disaster because you're set up for it.

I mean, you, you, you you've dealt with it, you know, but when you never dealt with something like this, man, it, yeah, we started getting prepared two or three days ahead of time.

You just can't prepare for something that you really haven't ever seen.

"” For Market to Market, I'm John Torpy.

Next, the Market to Market report.

A government report was again met with volatile swings as exports and weather were traded for much of the week.

May wheat lost 15 cents while the nearby corn contract fell a penny.

Soy oil pushed the complex higher as meal struggled to keep pace as the scope of the African swine fever outbreak in China continues to grow.

Nearby soybeans declined 9 cents.

May soybean meal dropped $14.70 per ton.

May cotton expanded by 36 cents per hundredweight.

In the dairy parlor, March Class III milk futures added 15 cents.

A green week in the livestock sector.

April cattle improved 17 cents.

April feeders gained $4.40.

And the April lean hog contract expanded $4.32.

In the currency markets, the U.S. Dollar index shed 33 ticks.

April crude oil decreased 47 cents per barrel.

COMEX Gold added $27.10 per ounce.

And the Goldman Sachs Commodity Index gained more than 1 point to finish at 491.30.

Yeager: Now here to provide insight is one of our regular market analysts, Don Roose.

Hey, Don.

Roose: Thanks for inviting me back, Paul.

Yeager: Good to see you.

We just a few minutes ago looked at the COVID-19 relief package and there's things for rural and urban.

And why not start with a question that comes from our friend in Canada, Phil in Dresden writes to us via Twitter and you can always write us via Twitter or Facebook each week, we put that call out.

And Phil is asking, is there an inflating effect on agriculture commodity prices from the huge government COVID-19 stimulus package enacted in the U.S., Canada and Western Europe?

Could this result in higher price plateaus?

So you have to put the whole plan in for all the commodities.

Go.

Roose: Well, yeah.

I think when you look at it really what a 180 from what we had last year.

If you remember around this timeframe is when we really started torpedoing to the downside in the commodities and by the 1st of April we were shutting down packing plants and just a real -- to the downside, crude oil goes negative for the first time, whoever thought.

So yeah, 180 right now, we've had a huge amount of fund buying coming into the market, interest rates are very cheap, funds are looking for places to put money and they're willing to work on commodities that have an opportunity to move up.

Well, lower supplies of the grain markets doing it and lower supplies of the meat supply is doing it.

So most definitely we've got inflation and I think that is partly what this market is about.

Yeager: In the wheat market, again let's go back to a few minutes earlier in the show, we talked about weather.

There's this big winter storm headed towards some wheat growing areas but there's also a rain storm headed to others.

How many times can you kill wheat?

And it looks like it's bouncing back.

But has there been some permanent damage done?

And if so, is that impacting the market?

Roose: Well, most definitely the wheat market topped out here short-term the third week of February, February 24th we set back about 50, 60 cents for a number of reasons.

Australia record crop, Argentina big crop.

But your question is what about the weather and it has been a dry drought situation.

We've got major rain coming at the market and wheat, as we know, it's hard to kill it and you're really not going to know until we come out of dormancy.

But it is very good timing and that has really at the end of the week pressed us lower again on improved conditions in North America.

Yeager: What are you hearing about those that might be looking at making sales right now in wheat?

Are they doing so?

Are you hearing that?

Roose: Well, I think if you look at the wheat market this week Egypt the largest wheat buyer bought wheat here towards the end of the week, $11 a ton under what they did in February.

So you're back at a floor end of it.

So probably not an ideal time to make sales here.

But rallies, remember seasonally we start to weaken up as we get close to harvest.

So rallies up to resistance are good areas to start to look at the selling place.

Yeager: All right, good indications.

What about in the corn market?

Did this USDA report have any lasting impact?

Roose: Well, the corn market overall we're just caught in a range, Paul.

We can't get under $5.30 on the nearby corn, $5 is big support, we can't get over this $5.70 mark, $6 is big resistance.

What we're really doing is we're kind of waiting to see what the next catalyst is to make us put in new highs or press us to the downside.

Producers don't sell on breaks.

There's a fair amount of stuff already sold.

So producers are really more looking at moving forward, getting the crop in the ground again now.

So no real sales are being made, end users buy the breaks.

When we rally, worry about South America's big crop.

So we're caught in this range.

Yeager: Well, the next big indicator I believe you're hinting about is the acreage report coming.

Do you think that is going to be the next market mover?

Or is that already being factored in?

Roose: Well, I think we're adding a lot of risk premium to the market for everything that can go wrong plus the inflationary fears you talked about.

But no doubt we have to buy a big amount of acres in corn.

Last time we had corn at these levels, $6 our insurance rate, we could get 97 million acres of corn but only 80 million beans.

So this year we have to get 92, hopefully 94 million corn acres and we have to get 91 million acre beans, we've never done that in history.

So a big job ahead of us.

We're on a ventilator with supplies, that's the bottom line.

And really if you look at it this does most years, South America's big crop coming at us, KONAB, the USDA down there in Brazil said they've got a record crop of corn and beans.

So we'll see.

Trade doesn't believe it.

But that is what is anchoring the market right now on rallies.

Yeager: Well, we did get a question.

I'm not going to call it up specifically, but there was somebody asking us via Twitter, they were basically saying some of those same things.

How many acres are not going to be harvested in soybeans in Brazil?

And how many acres are in danger of pure quality in Brazil?

Are you hearing poor quality from either the first or second crop of corn or soybeans in South America?

Roose: Yeah, the north has been rainy, they've been trying to get the beans out so they can get the corn planted.

Brazil is somewhere around 40% harvested on beans now.

Mato Grosso, the north state, they raise about 53% of the second corn crop so they're planting that, they're somewhere around I think 75% planted, usually 97%.

So call it 10 days too late on planting.

March 10th is the ideal planting time so they're a little bit late.

But pretty hard to fight the government when you get numbers.

Brazil down there is saying they've got record corn and bean crop.

That surprised the trade but I'd go with the government down there.

Yeager: All right.

You talked about a ventilator for corn supply.

What about for soybeans?

Is that on a ventilator too for our ending stocks?

Roose: Yeah, very much and South America has to plug the gap again.

To put it in perspective we raised last year just over 4.1 billion soybeans.

Just between Brazil and Argentina, not counting Paraguay, Uruguay and those other areas they're going to raise double, 8.2 billion.

So it's a 6 month window.

And if you look at it, our stocks to use ratio tight 2.5%, that is lower than when we went to $18, the last time in 2012.

So why can't we push up there?

It's because you've got this big massive crop coming at us in South America.

Acres are expanding down there too, Paul, particularly a second and next year they're going to expand acres.

Yeager: So that has always been a debate about just how big that crop would be.

How much of an impact are we talking here on the soybean market for price?

Are we in a situation, we'll go back to how you opened up the discussion, a year ago we were looking at?

Or are we going to be in one of those points in August and September how things changed?

Things changed rapidly.

What is going to be the big rapid change in South America that we need to watch out for on the soybean market?

Roose: Well, next year on their planting they're going to plant in the fall, they're going to expand their acres again because the price is right.

Their Real is at a record like 6 to 1 to the dollar so they have huge profitability there.

But what is going to happen, I think we're going to be very tight in July and August.

And I would be what happens is you're going to get big meal imports into the southeast from Argentina, you're going to get beans coming in from the south from Brazil to the southeast.

So we're very, very tight, Paul.

I mean, there's no doubt about it.

Right now if you want to buy soybean meal for the summer you can't really buy it for a lot of places so you have to cover it some other way.

So that just tells you the tightness right now because the crusher doesn't have the beans, he's got like a 45 day supply, so he can't sell something he doesn't have and he feels uncomfortable.

So that is how tight things are.

Yeager: So is that impacting the hog market?

They were up 5%, $4.32 week over week.

Is that meal issue in the U.S. going to be a problem?

Or is this more of a we're trying to fill a gap of what's going on in China?

Roose: Well, the meal market is on our technical stuff is in a three week downtrend and soybean oil is in an 8 week uptrend.

So what are we trying to do?

The hog market, look at it, it goes back to the COVID where we had all the liquidation situation due to last year's problems with slaughter.

So that is a real issue.

Then we had disease problems.

Then we're trying to figure out what's going on in China with African swine fever we're getting all different kinds of report.

But we do know that their meal consumption is down there so they're backing up meal, they're backing up soybeans so the numbers must not be there despite what the government is saying.

They're saying the hog herd is up 14% over there versus a year ago.

Yeager: So don't trust the government in that story?

The opposite of what you said in Brazil.

Roose: Yeah, I mean, I guess I've got a little more confidence in the Brazil government than I do the Chinese government right now.

We're hearing so many different reports.

Yeager: So the feed issue when it comes to China and maybe they're not going to be taking as much of the U.S. product, does that give you a little bit of maybe it won't' be as tight of supplies at the end if they maybe cancel some sales because they don't need it and they've stockpiled some stuff?

Roose: Well, possibly.

Look where we're at on soybeans.

Our soybean program is over to China for the U.S. until next year really.

Of our commitment that the government has we've sold 99% of our soybeans already, 90% of our corn.

Our marketing year ends August 31st.

So yeah, something is going to have to happen.

And they did cancel some corn, but then they bought some corn this last week.

So you're getting mixed signals over there.

Yeager: Before I let you go -- feeder market.

Let's start with cattle market first then feeders.

Again, let's go back to a year.

What a year in the livestock market.

But then we also have feedlots that are in dry locations and then getting some snow.

Is weather or the consumer the big driver right now in the cattle market?

Roose: Well, I think on the meat market the consumer has been eating more pork, beef, chicken at home than they did in the restaurants.

Our demand has just been phenomenal.

As far as the supply side we're literally eating through the big supplies of cattle.

We have 7% more cattle in the first quarter than production we had a year ago.

Now what's happening in the cattle market is we're chewing through those, we're going to have a little marketing hole here around the1st of April, then our numbers go down.

That is why cash cattle are trading $113, $114, probably steady, lower next week and then we go up and that is why April cattle are $119 building in that premium for what is going to happen.

Yeager: There is a question about that that we'll get to in Market Plus kind of discussing some of that.

If I put my cowboy hat on in Kansas yesterday and went and bought some cattle did I make a good decision?

Roose: It's hard to make the cattle work right now.

Either feeder cattle have to go down or the back months of cattle up or corn price go down.

So you're kind of buying the feeder cattle banking on the future is going to keep moving.

Look at April cattle at 22 or almost 130.

You always say high price grain is high price livestock and you can see what's happening.

You're in contract highs in the hogs, contract highs in the back months of cattle and that is the reason.

The grain is pushing us to a higher level.

Yeager: And you know what you've pushed us to?

The end of our segment.

Thank you, Don Roose, good to see you.

Roose: Thank you, Paul.

Yeager: All right, that will do it for the broadcast portion of this show and we will talk more in Market Plus so join us there.

You can find it on our website of MarketToMarket.org.

Just a reminder, this is the last weekend of the national PBS fundraising cycle.

Many of the stations that carry this program may shift when we are on but the message is clear.

If you value the work done on this program please consider supporting the work that we do with a financial contribution to your local PBS station.

Next week we check out a retraining program that focuses on both hard and soft skills.

Thank you so very much for watching.

Have a great week.

♪♪ ♪♪ 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.