AG Bull
Tommy Grisafi is the main host and content creator for Ag Bull Media.
The Ag Bull Podcast showcases agriculture's top talents in a long-form video format. The Ag Bull Trading Podcast is a deeper discussion of trading with analysts and key players in agriculture nationwide.
AG Bull
Markets, Weather, and DC Shake-Up
The agricultural landscape faces significant shifts as USDA undergoes massive reorganization while farmers contend with volatile markets and weather challenges. July's developments set the stage for a critical harvest season amid tariff concerns and policy changes.
• USDA announcing major reorganization, moving 2,000 employees from DC to regional hubs across the country
• Closing the massive South Building and Beltsville Research Station as part of effort to be more "farmer-facing"
• The "Big Beautiful Bill" passed July 4th covering many farm bill provisions, but significant work remains for September
• Cattle markets continuing to set new record prices while grain markets drift lower
• Cost of half a beef increasing by $360 in just six months with ground beef reaching $7-8/pound at farmers markets
• New tariffs being implemented against trading partners: 20% for Indonesia/Vietnam/Philippines, 15% for EU/Japan/South Korea, 35% for Canada, and 50% for Brazil
• Grain basis levels widening significantly as harvest approaches, indicating potential demand challenges
• Spring wheat harvest looking promising while corn and soybean crops show variable conditions
• August bringing important crop assessments including FC Stone forecast and Pro Farmer Crop Tour
If you need marketing help or advice, give us a call at 1-855-737-FARM. For weekly agricultural insights, sign up for our newsletter at rrfn.com or email don@rrfn.com.
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Thank you, Tommy G
well, let's get this week started. We're going to do a week in review. We're going to month in review. We're going to talk about what happened last month, in july. We had a lot of stuff big, beautiful bill, markets, weather, storms, lots of news, lots of news, lots of information. Some markets went up, some markets went down. There was politics involved. Let's bring him in, mr Don Wick, host of the show the big tuna, the one you want to hear from. I know you're not here for me. How you doing, mr Wick?
Speaker 2:Fantastic. How are you doing, Tommy?
Speaker 1:Not bad. Well, july is over. We've moved on to August. Days less sunlight every night. And give us a ray of sunshine here with what's going on in markets dc and anything you want to talk about.
Speaker 2:As we talk, we've got a gully washer happening here in the grand forks area where I'm located, so, uh, it's hard to find a little sunshine. We've never either been dealing with canadian smoke or rain it seems like every other day here in the region so it's been a little tough on. I'm trying to get this weed harvest cranked up and those kind of things. We're really close, though as far as the spring weed harvest looking very good as far as the condition of that crop.
Speaker 1:And how much rain are you talking about here? That's happening in your area right now.
Speaker 2:As we speak it's coming down pretty hard. I haven't checked, but in the last 24 hours's some areas in southeastern north dakota and northwest minnesota that had in that inch and a half territory.
Speaker 1:So uh, it's a pretty significant range enough in the rain gauge yeah, let's, uh, let's go full screen on you and talk about the big beautiful bill that happened july 4th. What's happened since that, mr wick?
Speaker 2:as you mentioned, big beautiful bill that encompassed a lot of things that we would see normally in a farm bill. So an update to reference prices, there were some adjustments in crop insurance, there was funding for many of the key provisions that we have in a farm bill. But they still have some work to do. That they still need to get accomplished and both the Senate and House Ag Committee leadership want to get that done when this August recess is complete. When they come back in September they want to get things wrapped up. It may be a big lift because they're going to need some Democratic support to get that over the finish line and they burned a few bridges on the Democratic side of the aisle with the big beautiful bill, so it may be a bit of a challenge to get that accomplished in september as uh as is on their wish list.
Speaker 2:The other big story, tommy, that happened you know this uh past the final days of july actually was the work on usda reorganization.
Speaker 2:There's been talk of becoming more efficient, trying to get usda closer to the farmer, and we hear a lot of that type of rhetoric, but it was put into action.
Speaker 2:The announcement came from Ag Secretary Brooke Rollins and then Deputy Secretary Stephen Baden was on Capitol Hill last week to discuss it as well. They have 4,600 employees in that DC area working at USDA. Once this reorganization is complete they would be down to about 2,600. They're going to be moving more of their people to regional hubs across the country, places like Kansas City, raleigh, north Carolina, salt Lake City, indianapolis, fort Collins, colorado is the other one, so staff would be moving out there. The cost of living in the DC areas was one of the reasons that was talked about by the deputy secretary last week in the Senate Ag Committee. There was a lot of consternation, I would say, in that testimony because the senators didn't find out about this until the same time that the media and the employees found out about it and they usually at least the leadership would have liked to have seen a heads up before that announcement was made.
Speaker 1:Well, that's very interesting, don, because I know you've been to those buildings. Tell us a little bit about what it's like to go to DC and go into Washington. Obviously, that's changed. You're fortunate you got to do that while it was still the same.
Speaker 2:So part of this reorganization plan would also shut down some of the major facilities at USDA. If you go to the major USDA headquarters across the street is what they call the South Building. It's, I believe, got like 1,600 offices within that building. It is one of the largest office buildings in all of the Washington DC area. Usda is going to give that building up as part of this reorganization plan. I don't know if they'd sell it or if it'd be used by another agency or what they would do with it, but it would not be part of USDA. They also would close down the Beltsville Research Station A lot of other research obviously done across the country, but that's been like the landmark research facility coming out of the DC area. That would be shut down with this announcement as well.
Speaker 1:It's interesting and that you know a lot of homes for sale, a lot of moving families around, and it does make sense. You talk about agriculture I had the opportunity to go to Ag PhD and you get 10,000 people to Baltic South Dakota and then they talk about does the USDA really know final, carry out the boots on the ground. You and I have done boots on the ground tours. It does make sense. Folks who are involved in the government and agriculture should live a little closer to the products are growing, correct.
Speaker 2:And that's that's really a big message out of all of this, as well as USDA talking about getting closer to the farmer, being a farmer-facing type agency and not doing it from the ivory towers of Washington DC, but getting out to those regional hubs to make that happen. Covenant chairs. The Ag Appropriations Committee met with the Deputy Secretary, steve Vaden, after he testified. His questions during the testimony was Kansas City would be the closest hub for those of us in North Dakota and he's like this is North Dakota. Ag is the be all and end all in a state like North Dakota. He thinks that hub should be closer. Vaden's going to be at Farm Fest this week, so I think that's going to be a question that will come up is is that the closest we'll be able to see? For one of those regional hubs, they're taking public comment over the next 30 days, so through August 26th they'll be taking public comment. Whether you're a USDA employee or Joe Farmer, it's an opportunity to provide your thoughts on whether it's a good thing or not.
Speaker 1:Very interesting Talk about markets in July. Nothing crazy. We have continued volatility. Grains have been drifting lower. Cattle have had volatility. They are drifting higher. They do have big down days occasionally but they tend to come back on that. I know at the end of the month we had a big swoop down in cattle. That was on Thursday, july 31st. The market has since bounced.
Speaker 2:We're seeing records, though, in this cattle market. It's just beyond my comprehension how many times we can find all new records in this cattle trade.
Speaker 1:Yeah, just to give you all a little mathematical equation. I picked up a half a beef in South Dakota. I had prepaid for that beef six months ago so I paid the farmer for it. It sat at the where it was processed for a month or two. It was a little slow to pick it up but nonetheless, if I bought the farmer and I did that, the rancher and I did the math, if I was to buy that half a beef today instead of six months ago, he would have to charge me $360 more. That's just for half of beef. The processing on it went up. The processors just laborers went up everything. They had to raise the price to process that beef.
Speaker 1:Now, if I was to sell it, I did go to Valparaiso Farm Market, a local farmer who's really big in the beef business. They have the whole truck. It looks like the ice cream truck and they can sell you pork, beef, lamb, everything and they are charging in the Valparaiso market $8 a pound for local ground beef. I sold my neighbor some at $7, and to be honest with you, don, I might have lost money on the deal. I was just being polite. So what? Two-pound package of ground beef imported from South Dakota $7 a pound, $14. Tastes delicious, no problems with the quality, everything's wonderful and you get what you pay for. But I think my neighbor was a little shocked. I think actually my neighbor probably thought I was trying to make money on the deal and I was actually losing money on the deal, yeah.
Speaker 2:But, like you said, quality, none better than what you're going to find right here in the heartland.
Speaker 1:Yeah With he said quality, none better than what you're going to find right here in the heartland. Yeah With that. We've talked politics. We've talked markets. Weather is a big talk. In the next few days you'll see FC Stone release their private forecast. We're going to have the Pro Farmer Crop Tour in August. You're on various crop tours. We were on a little virtual mini in-person crop tour at Hefty Ag PhD. What are you seeing out by you when it comes to production? Hig.
Speaker 2:Like I said, this wheat crop looks very even, looks like we have a pretty decent wheat crop across our footprint. There's some spotty areas in some of the soybeans and cornfields that we have across our footprint, but generally it looks like it's going to be a big crop. We'll have to see how things shake out in August for that soybean crop. Corn, the weather's been pretty nice. Probably could have used a little bit more heat, but they certainly have seen the moisture this crop needed throughout the month of July.
Speaker 1:I have heard some clients talk in North Dakota that they're worried about getting to the finish line when it comes to heat and growing degree units. Sounds like we're getting adequate moisture. In parts Was drier out in western North Dakota. Talked to a lot of farmers from Minnesota. They came to field day. No one really had anything bad to say about their crops. They're obviously not happy about price.
Speaker 1:I will say we'll give you a little breaking news headline, or at least you know why am I popping this up there. Breaking news. Maybe it's no news to you, but it's news to some. Watch your cash markets here coming in to harvest. That basis is widening out as the border trade continues to break. No beans are under 10 and yet basis up by you and beans has went from 80 to a dollar, possibly a dollar 20. I'll check local cash markets. But not only is the cash market breaking through a basis the difference between the futures and the actual cash market but the futures market's widening, giving signal that demand is poor. We do not have a trade deal and that's what we still need to talk about. A lot of talk of all these trade deals.
Speaker 2:Don, I'm not seeing it help corn, wheat or beans. It's going to be at the end of the week when all these reciprocal tariffs actually are implemented. The announcement August 1, was that deadline. I just pulled up the numbers. We're looking at Indonesia, vietnam, philippines. They're looking at about 20% tariff, 15% for the European Union, japan, south Korea and some others. United Kingdom 10%. Outside of that. Canada is looking at 35% for areas not covered by the USMCA. Mexico got a 90-day extension. Trump and President Scheinbaum got together by phone last week and talked about that timeline and pushed it off a bit so they can continue to negotiate. And Brazil there's a 50% tariff that we're looking at with Brazil. There's some consternation there with the way their former president Trump ally, president Bolsonaro, has been treated. So a little politics thrown in with that one, but your coffee price is probably going to be going up before the end of this week I'm gonna go full screen on me because I want to.
Speaker 1:I want no. No, we got to stay on both of us, because viewers and listeners well, the listeners won't be able to see your reaction unless you giggle out loud. But do you remember when oprah gave away those cars?
Speaker 2:yeah, and what'd she say?
Speaker 1:you get a car, you get a car, you get a car. When I watch my services, my trade, the news, it feels like you get a tariff. You get a tariff 25, 35, 40. I feel like I'm at an auction. All I know is that I'm watching the price of corn dribble lower, the price of beans dribble lower and our clients, my clients, your listeners, they are sad, depressed, nervous, upset, scared, and with that it's a very serious issue. So we joke about the Oprah, but it's no laughing matter here, folks, because this is affecting your pockets, your livelihood. Interest rates are staying elevated.
Speaker 1:I'm sending out a video to clients of what I spoke about at Ag PhD. I'm going to redo my do my talk here through the video. But pretty much I said that your cost of everything went up, yet the price of your commodity is going down. And sure, the government's like well, we'll give you some money for corn or beans or wheat. But that's not what the American farmer wants. They want demand, they want good, old-fashioned trade, they want trading partners and they want to get back to business. Don A hundred percent.
Speaker 2:And what you always say, care for low prices is low prices. So let's see if that can help generate some demand.
Speaker 1:It will. It will, because what's sad is why would you, as a foreign country, grow a bunch of corn when America do it $1.50 cheaper and you can do it? So if you can load it on a boat and ship it over, they'd be like thanks, america, you're the best. America is subsidizing their farmers to lose money and I don't know that. I don't know how this ends, but it's not. It's not good today. Now, that's today.
Speaker 1:We typically make a harvest low in August, september, october and we may rip out of here and go to higher prices, we may get trade deals, but right now, when you look at that PNW, when you look at the Pacific Northwest and you look at those bids up there, I think it's getting a little scary. If you're Alton Grain Terminal and you want to line up a bunch of freight and ship a bunch of beans right here at harvest, I don't know that you have that delicious bid on the PNW just waiting to be there and that's maybe something you or I could look into. And I don't think they want to scare anyone and I don't want to scare anyone, but I'm concerned and I don't even have a bean crop to sell.
Speaker 2:Yeah, I know what you're saying, um, but that's something folks need to be paying attention to. Is not just that futures price, what's the basis doing?
Speaker 1:yeah, you know what else they need to pay attention to. Every monday you come out with a fabulous uh newsletter. How do people sign up for that?
Speaker 2:Yeah, you go to our website rrfncom, or you can drop me an email, don, at rrfncom, and we'll get you signed up. Appreciate that.
Speaker 1:Yeah, absolutely, mr Don Wick. He's in Grand Forks, north Dakota. Apparently it's raining. Tommy Grisafi, I'm in beautiful, sunny Valparaiso, indiana, beautiful Valparaiso, indiana, beautiful weather 75. I want to thank our Canadian sponsors for sending the smoke. I still go out walking every day, but I come home coughing. I probably I don't even know if it helps, because I'm walking and it feels like I smoked a half-pack of cigarettes. But with that, this has been the Agbo Podcast Month in Review. I'm Tommy Grisafi. I'm a broker at Agbo Trading and Nesvik Trading Group. I sometimes am in Nashville, sometimes I'm by Mr Wick, sometimes I'm home.
Speaker 1:If you need help, give us a call. I do have that number For me. If you need help, you need marketing help, you need advice. You just need a friend to talk to. Hey, we do it all. Here's how you get a hold of me right there 1-855-737-FARM. Give us, give us a call and we'll get you started. See what we can't do to help you. All right, done? Oh, I need to click, hit that button and I need to hit this button. Mr Wick, this is your month in review, july. I wonder what August has in store for us. My friend, I'll see you soon.
Speaker 2:Thanks, man, thank you.
