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♪♪ Coming up on market to market a tax overhaul may leave some rural policies alone, a war of words and finger pointing over inflationary pressures, advancements in tracking insects and diseases, threatening crops and market analysis with Sue Martin, 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'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, September 17 edition of market to market the weekly journal of rural America.

Hello, I'm Paul Yeager.

The foot appears to have come off the inflation gas pedal in August.

The consumer price index went up three tenths of a percent.

That's the smallest rise since January.

The less volatile Core CPI added a 10th of a percent, even with higher sticker prices, retail sales rose seven tenths of a percent last month with much of the gain coming from online purchases.

The Rural Mainstreet index added a 10th month above growth neutral, but did record a three point decline from the previous snapshot.

The Creighton University survey cited solid grain prices, low interest rates and growing exports underpinning the rural economy.

If death and taxes are inevitable, combining the two is a constant concern for those actively engaged in farming and planning for the next chapter in the family farm.

This week, Congress proceeded with a tax plan as farmers and ranchers held their collective breaths on the transfer tax and step up in basis language of that plan.

Peter Tubbs has more.

Democrats have reportedly abandoned attempts to change the tax laws that remove most of the tax burden on inherited farmland.

This week, the House Ways and Means Committee advanced a tax package that would change how estate taxes on farm and ranch inheritances are calculated.

If adopted the measure preserves step-up basis for those inheriting agricultural land and relieves heirs of a heavy tax burden for capital gains.

Advocates of step up basis argue that ending the scheme would make land inheritance prohibitively expensive for heirs, and in some cases would require sale of some property to generate income to pay taxes owed.

Democrats had pushed for the changes as a means of targeting large inheritances consisting of stocks and real estate.

The concerns over the effect on the agricultural community ended the plan.

If passed the measure would cut the $11.7 million exemption of estate and gift taxes to $5.85 million starting on January 1st, 2022.

Also the tax rate on capital gains on stock or real estate sales for some households would go up and corporate tax rates would be broken into three new brackets.

Tax consultants are advising that farm operators should consult with their tax professional before the end of the year from market to market I'm Peter Tubbs.

A five alarm fire Sunday night at the JBS plant in Grand Island, Nebraska sparked flashbacks to a 2019 blaze at a Kansas Tyson facility.

The disruption at JBS was minimal in comparison, but did come at a time when the large meat Packers are under attack from the Biden administration.

Here's John Torpy.

The meat processing industry pushed back against the Biden administration this week in reaction to last week statement implying meat packers might be responsible for higher food prices.

The North American Meat Institute responded to statements made by U.S. Secretary of Agriculture, Tom Vilsack last week inferring the meat packing industry might be responsible for increased consumer prices for beef, pork and poultry.

Americans are experiencing firsthand with the Secretary, refuses to acknowledge the effects of COVID and the lack of labor are hurting consumers and nothing proposed by the Secretary of Agriculture on the structure of the meat and poultry industry will help families struggling to pay for groceries.

Tyson foods, one of the four meat processors under scrutiny by the Biden Administration for potential pandemic profiteering also blamed COVID-19 for the spike in prices as processing slow-downs resulted in diminished beef supply at grocery store meat counters.

For Market to Market I'm John Torpy.

Insects can range in scale from nuisance to crop killing.

The fight to reduce the spread of either takes on different strategies, including the use of data from around the globe.

Coleen Bradford Krantz explains in our cover story.

This locust infestation in east Africa was already unusually large in 2019.

Weather conditions continued to be ideal for the short horn grasshoppers and their numbers grew exponentially the following year before shrinking in 2021.

Or swarms that are, it's not uncommon to be, let's say the size of Manhattan in New York City.

Um, so, so they can be very big.

Um, in one day that swarm can eat the same amount of food as everybody in New York and California combined.

It's this kind of infestation, if it were to occur on U.S.

Soil, that plant protection and quarantine, a unit within the U. S. Department of Agriculture would be charged with monitoring and managing.

This team of experts have spent the last few years improving their data analysis and mapping tools.

The hope is to more precisely pinpoint problem populations of crop damaging insects, as well as plant diseases before they get out of hand.

I think most organizations these days, or interested in creating, um, dashboards or ways of viewing data, and you can look at, you know, pie charts.

You can look at pictures, storyboards, any kind of information you are willing to share.

And the technology has matured to the point where we can make this more readily available.

The plant protection and quarantine dashboards are helping federal officials who are working in tandem with the state plant health experts to decide where a limited amount of money should be spent to stop insect or bacterial disease threats to row crops.

The moment a local official counts insect populations and enters the numbers into a database, it instantly becomes part of a larger pool of information.

Well, if you go back two years, we would have pencil on paper.

We are more and more going towards electronic data collection.

And you could imagine when you have pencil and paper and transcribing that information to a computer there's opportunities for error, I think one time collection helps reduce that.

Royer's team says the dashboard interface can help with locating concentrations of various pests and diseases, as well as being used to pinpoint activity in a specific geographic location.

I'm Derek Witt with Animal Plant Health Inspection Service, plant protection and quarantine.

What we're looking at here on this dashboard for the grasshopper and Mormon cricket program is obviously a, a wealth of different metrics related to treatments and surveys.

But then the mapping component really adds another dimension of ability to dig into the data.

The maps generated from the database can also be used to evaluate the effectiveness of the previous year's pesticide treatments as one official explained earlier this year.

So we can zoom over to Wyoming and see that for the areas we treated last year in Wyoming, for the most part.

Whereas last year, this was just peppered with reds and oranges.

We were able to get in here and it looks like for the most part, the treatments were very successful because now we have dark blues, blues.

Just like long-term weather forecast, plant protection, and quarantine officials can predict which areas might have the most trouble with a particular pest or plant disease in the coming months or years.

And then generally how it works is we have our state plant health directors will submit requests for treatments, having a pretty good guess that we're going to have a very destructive grasshopper year.

You can see we've already dug way down into the data just to see this stuff in Eastern Montana, uh, up here on the Flathead Indian reservation, and then over here, uh, in other parts of Eastern Montana, we have had high nymphal grasshopper populations, which are areas you want to treat because nymphs obviously grow into adults and then the cycle goes forward.

Eastern Montana ranchers can attest to the accuracy of the dashboard data, especially where applies to grasshoppers.

They were bad in 2020, but even worse this summer, as is shown by this national weather service radar view of a swarm of grasshoppers.

Uh, we had most grasshoppers I've ever seen, and since I've been around, but I'm only 30 years old, my grandfather is 76 on the place.

And he said probably either one of the most amounts the grasshoppers ever seen, or there might've been one other time back in the sixties.

In summer 2020, the federal government added an additional $2.8 million to the original $2.6 million for grasshopper and Mormon cricket management in Montana and seven other states.

The problem still grew in some areas as drought conditions continued this year.

I mean, I'd walk out my there in July and August.

I've walked out my front door and through my yard.

And I bet I had billions in my yard.

I mean, just ridiculous how many there were out in the pasture.

The wheat was bad sometimes for part of the year.

And then as it kind of matured, they went back onto their alfalfa fields and destroyed them.

The Pluhars estimated they lost nearly 40% of their hay crop in 2020 due to the double punch of a dry season and grasshopper damage, but lost nearly 90% this year, Pluhar likes the idea of the government improving the speed and accuracy of pest population tracking and predictions.

I think it helps, you know, if you can track them and kind of know where they're going to hit, people can plan ahead and maybe plant more hay crops.

If they have to get livestock or be prepared to spray more, anything to help prepare, you know.

While the dashboards are for now primarily intended to be internal tools for government officials, plant protection and quarantine has made some data available to the public.

The whole effort is trying to be more efficient at collecting data, managing data, sharing it and looking at how are we spending our limited resources to talk together.

From Market to Market I'm Coleen Bradford Krantz.

Next, the to Market to Market Report.

Harvest lows appeared to be set early in the week while a post USDA report rally and the run-on milling week push the trade higher for the week.

December wheat added 20 cents, while the nearby corn contract improved a dime.

Two geopolitical alliances, one with one without China is pressuring American allies in the trade arena and the soy complex reflected the news first.

The November soybean contract dropped 3 cents December meal lost 30 cents per ton, December cotton subtracted, a $1.17 per hundred weight.

Over in the dairy parlor, October class three milk futures fell 15 cents.

A mixed week in the livestock sector as October cattle shed 63 cents.

October feeders declined a $1.35 and October lean hogs expanded $3.28.

In the currency markets, the U.S. Dollar index added 61 ticks November crude oil improved $2.35 per barrel.

A sell off in COMEX gold of $38.80 per ounce, and the Goldman Sachs Commodity Index improved almost nine points to finish at $538.50.

Now here to provide insight is market analyst Sue Martin.

Hello, Sue.

Hello there.

Too bad we have nothing to talk about.

So thanks for coming.

I know, a really dull day.

This is like the last weekend for many farmers in the, in the corn and soybean belt maybe rested up before they go all in on, on harvest.

So let's start with wheat because what is the wheat market doing?

We talk about this run-on mill.

What's the impact of, of that demand.

And what's the other story in wheat right now?

Well, I think the, uh, global supplies first off, if we'd go back to the supply demand report, uh, here in September, it was bearish most everything.

Um, wheat, rice, corn, coarse grains, soybeans, all of it increased in stocks.

That's usually not a good sign.

Um, but in the meantime I have to say, okay, so we're hearing more production out of some countries, especially Australia.

They've had a good year and they deserved it.

But 40% of that country is very dry right now.

So they might be heading back into potentially another drought.

But in the meantime, I look at, uh, China and their production of corn beans, wheat, you know, they say China's had a record crop of corn.

Well, if it is it, most of it's gotta be junk because they had a record flood this year that outdid last year, which was phenomenal.

So, I mean, I sure you can believe all that you hear out of China.

I don't think they're being totally truthful or transparent, but that doesn't make any difference.

That'll show up in their buying.

And, um, when I look at the wheat market, I think that this $9 area in Minneapolis wheat, where do you have the public long Minneapolis wheat?

And I think as we get up over that $9 area, it's struggling and it might have a little bit of a pullback.

Uh, I look at Chicago and K.C., K.C.

Is dealing with some dryness now coming back and, um, heat.

And of course they're going towards their planting season.

And the question marks is going to be, I hear a lot of talk about fertilizer costs and, and inputs.

And so we're wondering, are they going to see maybe a shift towards more soybeans.

Save your input comments for just a moment.

Uh, but if I'm looking to plant right now in the Southern Plains, my wheat crop, am I looking to expand, take out the input issue.

Am I looking to expand my acres right now?

Well, one thing that you have to say is that the crop insurance value of over $7, I think $7.04, I could be wrong on that, but I think it's around $7.04 has been decisive and that's not bad.

That's that's, uh, that sets the bar for this, uh, crop.

And so I think that helps add into, have some acres to.

Okay.

The acre question.

Let's just go ahead and start.

Um, we always thank everybody who gives us the questions via Twitter and Facebook.

This one is Josh and Kansas City, Missouri, right there in the heart of, of wheat country a little bit east, uh, how will the corn market respond when it finds out it is losing acres to bean wheat, literally any other crop?

Will prices this rally to get the acres back or willingly, give them up?

I don't think it will willingly give them up.

I think that, uh, price has a lot to do with that price discovery.

And we have between now and March to worry about that.

Uh, although a lot of decisions are made in the fourth quarter of the previous year, but I think that, uh, when you look at corn, first off, Midwest farmers love to plant corn and they've had, if they've come through this year with a respectable yield, you know, that says something for genetics, cool nights, uh, dewey morning, something like that.

But I think that the farmer's gonna take a look and say, you know, if I have a halfway decent year, we had a tough year last year and we did this good.

Maybe we catch some rains this next year, which our weather sources are warning us.

Uh.

That rainfall won't be as much.

Is going to be very hot and dry, uh, especially in the Eastern corn belt.

Uh, they're they're due is coming, I guess.

Um, but in the meantime, the, the bottom line is going to be these input costs too.

Everything's going up, cash rents are going up.

You've got, um, uh, phosphorus, you know, or maybe it's potash.

One of them's over $800 a metric ton.

I mean, it's, everything is increasing and exponentially.

It seems like, and that's a concern.

Um, you know, do you see fertilizer going much cheaper than $500?

No, it'll probably hold here.

And after that, anything, it probably gets higher.

I think you'll have an acreage fight on your hands as we go in towards spring.

That'll be something we'll absolutely talk about as the winter wears on, but I want to discuss two things from this week and what it matters.

Uh, first, do you agree with the premise that the harvest low is in?

No.

Okay.

When do you expect that?

At best October, maybe October 18th.

I think we're in, you know, my premise this year always has been, I think since early in the year when I was on the show, I talked about this would be a year of two tails and that the first half of the year would be good.

And the last half more traditional.

Might even extend into November, December.

So let's say the market, well, first off, let's go back and say, okay, is September the low harvest low, first off going since 1970, So the last 51 years, this has only happened 10 times out of 51 years.

So it's not a super common thing.

And the last two years that did this was 2018 and 19.

So are we putting that low in?

I don't really think so.

Um, but I also don't think that the push lower in prices is substantially lower, uh, because we are tight supplied.

And so I think that, um, and the uncertainty over this quarterly stocks, remember everybody's got- it's human nature to believe the most recent.

And of course, last year, the quarterly stocks we had, uh, an outside month or outside reversal month in August of last year.

And then the quarterly stocks report surprised everybody with reducing stocks after a reduction in the June 30th report, which is not a common thing.

And that was the igniter.

And then things took off and ran.

Everybody's kind of got that vision back in their head again this year.

And I don't think it's going to happen that way.

Um, if, if we were to see stocks reduced, I would have to say, then that will be, and I know we had high, uh, basis levels this summer that would have been enticing to be, keep moving stuff, uh, the corn into the market.

But if we show a reduction in stocks again, then I would say, it's probably in the feed useage, and I'm not so sure about that.

And I got to get you to beans, and that is the basis story as big in beans as it is corn?

No, not right at the moment.

Um, I think that, um, we have to believe first off with China this week going into Brazil and buying beans.

And of course they canceled an order for a 132,000 metric tons and another unknown destinations, which we assume was China.

And the market only hiccups, just a tiny little bit on that news.

Well, and that would have had to been friendly news in a way.

I mean, it's kind of an adverse thinking, but if you think about it, okay, China needed beans now.

They can't sit and wait.

They needed it.

And the port out of Louisiana after Ida, isn't helping them out.

So they couldn't get it out of Ida and there.

And the Pacific Northwest is having a hard time garnering soybeans too.

So therefore they had no choice.

They had to go to Brazil and get beans.

Now, keeping in mind that Brazil harvested later on that second crop or not second crop, but the soybeans and therefore later out means they've got a little bit longer window to be able to push beans, but I think they're getting very tight supplied as well.

And so that brings us back to, uh, now being, I think the, uh, uh, opportunity for more Chinese business, where we need to get the, uh, gulf up and running and barring any other surprise, you know, storms that might come our way.

And this seems to be a year where we're going to have them.

Right.

But, um, I would have to say, I think that China will be back.

I think China needs it.

They're crushing margins are profitable now.

And, um, you know, they're only too anxious to get them and keep in mind.

It was interesting back in 19 when China had a ban on U.S. Imports of beans, well, cough go international grain was in our, our deliveries almost every deliverable month taking beans and people kept missing that.

And now that everybody's on to them, they've got to do it the old fashioned way, but what's to say they aren't selling our board to on rallies.

That is absolutely something to think about.

Uh, you mentioned the word anxious and, and you saw the story we had about the meat market, the cattle market.

Who's the most anxious right now in live cattle?

Well, exports are excellent.

Um, I don't think our lows are in on cattle at the moment.

I look for a lower logia in October.

And, um, I think part of it is you've got a premium structure.

We had October's premium over August.

So they rolled their hedges forward, covered their shorts and rolled them forward into October that put a weight on the September, along with the fact that you continued to see beef slaughter, continuing beef, cow slaughter, continuing because of liquidation off of pastures and what have you.

And Canada's going through this at the same time.

That's not friendly right now, although it's surprising how well hamburgers held up, but in time, this is going to be very friendly.

But, um, the other thing I think is that, um, uh, when we get in towards the fourth quarter, then we'll start running into tighter supplies.

But here again, December is premium over the October.

So we look for when you get a premium of around $6 apart, in other words, Dec silver, the Oct, I wouldn't be surprised they roll those hedges, which could put a little bit of pressure on, but exports are excellent.

China's our third largest customer at this time.

And we have South Korea back.

Um, I just think that the market's going to still sift lower.

However, carcass, if I look at carcass weights, the, um, uh, carcass dress carcass weight is 9.2 pounds under the five-year average, it is also 21 pounds under a year ago.

So that makes me think we're starting to get current in this market, which is a very friendly thing, right.

In hogs have, is the worst over for the immediate term.

Do we finally stick the low there?

Maybe for a moment?

How.

Long is that moment?

Oh, maybe in early October, I would say the hog market is, uh, you know, if you look at February, February is so discount to the board and normally at this time of the year, it should be premium.

What's it telling us, it's telling us one, they think China's going to have some decent enough supplies.

So they're not, it's it isn't the Chinese business that's going to run the hog market like it did.

Two, our numbers are still tight enough, but not as tight.

And the product just like in beef is high priced.

Every meat is high priced and not going to get cheaper, either.

All right.

So we will pick you up on hogs.

And I got to ask you a couple feeder questions and marketplace.

Thank you.

So appreciate the time that will do it for this installment of market to market.

As I said, we'll talk more and market got a lot of ground to cover also cotton.

So join us there.

Find that on our website of markettomarket.org and you don't harvest does disrupt many things, but missing our program, doesn't have to be one of those.

Our on demand option of watching us on YouTube is always there including past episodes, check out our YouTube channel by searching Market to Market and ring that bell to subscribe.

Next week, we look at those pushing through the pitfalls of urban farming.

Thank you 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've worked to help our customers be ready for tomorrow.

Trust in tomorrow.

Information is available from a Grinnell mutual agent today.