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.
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AG Bull
Wiesemeyer's Perspectives | Why Beef Stays Pricey While Soybeans Slide And What Farmers Can Do Next
We dig into tight cattle supplies, a slow, science-led reopening of the Mexico border, and why beef prices stay sticky while soybeans slide. We map out where policy could lift margins in 2026, from E-15 and 45Z to farm aid timing and ACA subsidies.
• lighter-than-expected placements and persistent cattle tightness
• phased screwworm testing with three inspections in Mexico and one in the US
• beef prices stay firm in CPI while electricity costs weigh on households
• China soybean purchases progress toward 12 MMT commitment
• soybean competitiveness hinges on tariff relief versus Brazil
• inflation easing shifts focus to unemployment and Fed cuts
• per-acre FBA estimates with soybean relief lagging the hurt
• SDRP phase one top-ups coming later; phase two data issues
• year-round E-15 momentum and California’s early step
• 45Z, RFS, and domestic demand as price catalysts for corn and soy
• ACA subsidy extension pressure for rural families
• specialty crops and sugar losses signal need for more aid
• Supreme Court tariff ruling and 2026 market implications
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Thank you, Tommy G
Well, how are we doing, everyone? Merry Christmas. Tommy Grossaffi, AgBull Media, Ag Bull Trading. You're listening to the AgBull Podcast. We have Mr. Jim Wiesmeyer waiting. We have a lot to talk about. We have some breaking news on Catalon Feed. Of course, as you're learning now, this video is going to be released every Saturday at 6 a.m. Central Time. That way we're on a little pattern here. Regardless if we film on Friday or Saturday, you're getting a fresh video. And of course, someone didn't shut off their phone, but we'll get right back to that. So at least you know this isn't edited. Mr. Wiesmeyer's waiting. We have breaking news. He has a lot of things he wants to talk about. Although it's felt like the markets were calming down, they had some real big moves in various various times of the week. We'll talk about all that. But from the bottom of my heart, I'm sure Jim says the same. Merry Christmas to you and your family. Agriculture and the folks working in it are the hardest people working in America. We'll bring Jim in.
SPEAKER_00:Yeah, that's the holiday spirit here in DC. President Trump uh gave the government workers off both the day before and the day after Christmas. So he's in the spirit, and uh I'm ready to drink my spiked eggnog as close to Christmas as I can.
SPEAKER_02:All right, let's check our mics. Just double check that. Oh, yeah, we are live. A lot of stuff going on. Every week's different, and so many weeks have so much drama. I feel like there was no drama this week. That is the furthest from the truth. It was just like a little calmer. I mean, we could talk about a lot of different things, but I know we want to talk about markets right off the bat. Cattle had a nice comeback, but they also had some down days. Feeder cattle closed up five dollars. Live cattle were up little, and hogs were down. Soybeans, if you're a farmer or anyone involved in markets, you have to be disappointed. Soybeans down 27 cents. I think you said, Jim, seven week lows. Seven week lows. Six, seven week lows. That's bad. Corn up three. We have some optimism, wheat down 17. So a mixed bag. But boy, I didn't have time to pop a cattle chart up, but we are halfway back in filling in gaps and hitting all types of Fibonacci numbers with that. We did have cattle on feed, Jim. And as best I can tell, talking to a few friends in the industry, they said, I quote, looks like placements were lower than expected. Otherwise, the rest in line. Now, you had some perspectives on that.
SPEAKER_00:But it still shows the tightness in that supply. And that's obvious. That's why we're going up in feeder cattle and cattle to a degree. But put the uh perspective that Sean Haney.
SPEAKER_02:Yeah, I'm gonna read this to you, James. Yeah, read this in small print. Okay. Up until the end of September, Canada imported 294,000 head of feeder cattle. This is 20% ahead of the whoopsie, it popped off on our new thing, on our 10-second thing. It's ahead of 2024 pace. 2024 was a record year of 400,000 for the year. So Canada should break a record.
SPEAKER_00:And that's adding to the tightness of the supply here. We shouldn't tell President Trump this because we don't want him to close the border, Tommy.
SPEAKER_02:No, no, and we're gonna have some news about the border here in a little bit. Did you want to talk about right screw worm?
SPEAKER_00:Did you want to do uh that's what we're gonna talk about the eventual reopening of the US-Mexico uh border for that screw worm? I think we have a graphic on the screw worm. Subject to change, here's what my best sources are telling me, Tommy. Bear with me a little bit. Sure. When they do announce, and it could be yet this year, they'll they'll announce, yeah, officially a science-based phased-in reopening of the US Mexico border. Now, the way I understand it, again, subject to change, there's gonna be four inspection tests, three in Mexico and one in the United States before those cattle are allowed from Mexico to go forth within the United States. Now, the way that is is the they're they're gonna uh first uh seek an area that's relatively safe in Mexico to begin the phased in. Then the cattle, I'm not hearing a number, the cattle that are going to come in initially will all be tested. Now, if any of those cattle test positive for screw worm, they will still go along to the second Mexico testing site, but they're going to be uh given a treatment uh in order to make sure they no longer have uh screwworm, the sores, uh, etc. Now in the second uh Mexico site that will be eventually be identified, the same thing's gonna happen. Those cattle are going to be retested, and if any cattle test negative, I'm sorry, positive, at that juncture, they go back into Mexico, they stay in Mexico in the case, okay? But then the remaining cattle go into another separate uh Mexican testing site, and again, the same process. If uh if they're if they test negative, they will go on to a US site yet to be announced, and then they're gonna be tested again, and it's that portion of cattle that pass all four, well, within reason, four tests, who are tested four times. The first one's different because they can treat the cattle first into the second. Those are the cattle that's going to be allowed into the United States. Now, this could this could change, but this is the best information I have at this particular time. What it tells me, Tommy, and you're the trader, this is going to be pretty drawn out, phased in, because it's going to take some time to go through all these testing.
SPEAKER_02:Yeah, you know what this reminds me of? You remember in the movie The Godfather when he comes over from Italy and Ellis Island, and they put them over here and they send them to this doctor, and then they put y'all mark on him, and then he had to stay in quarantine for like a month, right? Yeah. And so they're gonna let some cattle in, but it is going to be a very in review, as best I could tell from understanding you, it's gonna be a slow, methodical, thought-out process. They're not just gonna open the doors and be like a concert and say, go pick your seed, right? It's gonna be very slow. So uh I did a video this week with Mike Sands, and we went over the cattle numbers. And back in the day, we were letting in a million two hundred thousand cattle from Mexico. This year we only let in 200,000. And so it sounds like if they open, sure, could we let in two, three, four hundred thousand over next year? Yeah, but it's gonna, you know, the supplies are so tight, yeah, Jim. I mean, we could have a winter storm if we had a heck of a winter storm this year, we could kill a few hundred thousand cattle.
SPEAKER_00:So that's why cattle should remain firm in 2026, right? If not longer.
SPEAKER_02:That that was Mike Sand's point. Yeah, he was he said the numbers don't lie. Now, who's going to tell President Trump that he was not able to, there's a two-year cycle to make cattle that he couldn't uh get that done? Who's going to break the news to him?
SPEAKER_00:This is not eggs, and I think we have some beef prices, some graphics here that that shows, yeah, look at that consumer beef price. This came from the consumer price index. It's it shows you the average per pound for uncooked ground beef. And look at that, that's fairly lofty, and that's not going to change all that much because of what we keep saying. Tight supply, and the demand is holding up really, really at a good pace.
SPEAKER_02:Yes, you brought another chart too, Mr. Weesmeyer. These are a little hard to see, but do you remember what this is?
SPEAKER_00:I'd have to see. Oh, that's the different categories on the consumer price index. And you can see food and food, energy, et cetera. Look at energy up there. It's not gasoline prices, that's uh electricity prices. So Trump mentioned that in his uh White House address this week. And there he's gonna try whatever he can, permitting and other things to bring down those uh uh electricity prices. His uh it was like a State of the Union address, but it shows you how he's gonna become more aggressive in talking to the American people going into the 2026 elections. He knows, Tommy, that we have to go from the gains in Wall Street with the equity markets to Main Street. And that's gonna be a harder, harder street to travel. What with the interest rates, what with uh electricity prices, insurance, insurance prices, uh housing affordability, etc. But he addressed all those. I think he was a bit um he he yelled more than usual, but I th I give it overall a B or a B. It wasn't an A. Okay. It wasn't an A. But he went through the topics that he had to in 20 minutes. I didn't think I'd ever hear a Trump speech be only 20 minutes, but he did it.
SPEAKER_02:That's very interesting. So we have our cattle moving that way. We're going to let's see here. Next, we well, this is the the every week we talk about this. China soybean purchases from the US. This is the story that just keeps giving here.
SPEAKER_00:Yeah, and although USDA isn't at the official seven and a half to eight million tons that many in the trade are at. Bloomberg had a story that uh total Chinese purchases of U.S. soybeans are at about the 7 million mark. And recall that by the end of February or this season, I really think it's by the end of the marketing year, China has committed to purchase 12 million metric tons. So they're well on the way, despite all the early errant conjecture by some, not all, some in the grain industry that said either China wouldn't buy hardly anything or they wouldn't live up to the 12 million metric tons. They're well out, they're over half of the way there, Tommy. That's the bottom line. And they're holding auctions. Now, the latest one, the soybean auction, to free up the space in China because they're loaded up with beans. They're taking approaches in order to find the storage to import uh all these soybeans. But bottom line, I'd rather have a slower approach of imports of China importing soybeans than nothing. You know, that they had not imp they weren't importing anything. So it's a step in the right direction. But we have to be competitive. Now, here's the thing I want the audience to understand U.S. soybeans will become very competitive to China versus Brazil, because we're now at least what, a buck 20 higher than Brazilian beans. If Trump takes off the additional 10% tariffs that he put on China relative to fentanyl, and I think that's it not a question of if, but when. It could be months from now, but I think eventually it's gonna happen. And if China returns the favor, bottom line, we are very competitive to soybean to Brazilian beans at that juncture. So I don't know when it's gonna happen, but when it does, that's a positive development for the competitiveness of U.S. soybeans, especially going to China.
SPEAKER_02:Here's what we're gonna do. I'm gonna grab the next headline. I'm gonna mute you. I'm gonna mute your mic. You go ahead and grab a little bit of eggnog in your favorite drink. I'm gonna give you 30 seconds. I can hear Mr. Wiesmeyer's voice struggling. He must have been yelling at people this week. All right, Tommy Grossopi here, Jim Wiesmeyer. Our next subject is U.S. core inflation eases to slowest since 2021. And we have a headline of that. Uh, inflation data. Now, with that, I'll bring Mr. Wiesmeyer back in. I think he's had a little swig of eggnog. I'll turn his mic on. Jim, why sounding like you were struggling?
SPEAKER_01:Yeah.
SPEAKER_02:And I said, I got hey, you didn't see it, but when we started the show, I had a huge sneeze and I reached over and hit my mute button before uh I dirtied my microphone. So we're we're on the struggle bus today. But you know what? I am so excited to be doing this with you. And we had a lot of positive comments and reviews, texts from friends. My friend Connor uh texted me, said, You know who's watching your show? And so we have thousands of viewers every week, but only a few reach out. If you're enjoying the show, say hi. Of course, at the bottom, I have how to sign up for Mr. Weissmeyer's newsletter. We'll get that right in there, and there's that email there. So while we're doing ads and commercials, heck, I'll just keep going.
SPEAKER_00:And and and we kind of add perspective, Tommy. That's what we're doing.
SPEAKER_02:Yeah, yeah, we do now. Mr. Weissmeyer and I, we have a way to pay for this, so you don't have to. But if you want other content, like I did that video with Mr. Mike Sands on Cattle and all these other people I'm meeting with,$25 a month,$250 annually, www.agbull. You'll see, folks, at the beginning of the year, you're not seeing a lot of content from me coming out. It's because it's behind the paywall. But Mr. Weissmeyer and I, we just keep doing that. So let's start over here that we have US inflation. Yeah, we hit the CPI chart.
SPEAKER_00:It was the lowest in years. And now some of the naysayers were quick to who didn't forecast that the numbers were going to show what they did. They they thought that we would have more core inflation and more overall CPI, but they were wrong. But now they immediately said, well, this data is a little little little tempered because uh this was the the the government shutdown, uh, we didn't get the volume of returns, etc. So it could be January, February CPI reports and the job numbers report before we see whether or not these numbers are indeed happening. I think they are. I think uh we're having a deceleration, deflation, if you will, in in more than a few products. Now, food is sticky, uh as we keep saying. Uh I think the food was up a uh uh 2.6 percent or so. And that was a result of beef and some other products, but at least it's not as high as as it was during the last two years. Bottom line, I think the market next year, Tommy, is gonna shift from inflation into the job number, unemployment rate, because the unemployment rate uh went up to 4.6 percent recently. That's the Fed doesn't like 4.6 percent. So, what's that mean? The Federal Reserve, I think, will eventually get where the private market is at relative to additional 25 uh basis points cuts in the in the Fed funds rate beginning probably January next year. We have to see what some additional numbers are going to show. But if that unemployment sticks at 4.6 percent and inflation continues to go at least down in certain areas, uh housing, uh shelter, if you will, uh food, etc. And remember energy reduction. We've got gasoline prices, maybe not as low as Trump said on television this week, but they're lower. I mean, I was in Nebraska what was a week or so ago, and I saw 245 for regular gasoline, and I think it's even lower than that. That's like a tax cut, Tommy.
SPEAKER_02:Can I add some color to that? This is so stupid. I gotta tell you. I on our little uh on our little service we have at Nesvik, they were talking about gas prices coming down. Do you know gas stations are reporting a surge in sales in Slim Gyms and other products inside the gas station? Because when someone goes to fill up, they're only spending$40 instead of$70. They're going in, they're going to the washroom like everyone does at the gas station. Most of these washrooms are not uh nothing you'd be proud of at your own house. But if a guy's got to go, he's got to go. But they're picking up a slim gym, they're getting an energy drink, maybe a can of Zins, who the heck knows. But that's what happens when you get the price of a raw ingredient like that gas down. It gives a consumer money to spend on something else. I thought I'd add that tidbit.
SPEAKER_00:Absolutely, and that turns that money over. Also, there's uh maybe we can you can put a link on it. I I had a link into uh the rise of beef jerky, the guy who really got the industry going. It's a really fascinating story to read.
SPEAKER_02:That's what they were talking about at work, yeah.
SPEAKER_00:That was in Forbes magazine. I put a link to it in my updates, but it's really good reading because that you talk that's true. American, he went in years ago to I get maybe a service station and saw how expensive beef jerky was. And he had happened to be in a family that owned a beef processing plant and it went under. He went bankrupt. But he said, you know, I've got facilities here to make beef jerky uh ovens, if you will. And he started it and now he's a billionaire. So that's that's that's America 101 to me. Yes, absolutely.
SPEAKER_02:Let's stick with the theme here. What is still missing from USDA outlook for U.S. agriculture trade and food price, Jim?
SPEAKER_00:Well, we had the overall trade deficit that narrowed as a result of these tariffs, but we really didn't have USDA's follow-up. I'm being told now it goes off and on, but December the 23rd, we're going to have that outlook for U.S. agriculture trade from USDA. The key there, Tommy, is whether or not USDA is going to add any commentary in it, because the last few reports, they've just had the tables, the the numbers, if you will. But see, with the Trump tariffs, some of the story is not they it's not so positive. So we're gonna see. That's how I'm gonna judge whether or not we're getting back to normal, if there's actual written comment analysis, if you will, of of the trade numbers for USDA. I hope that's going to be the case. December the 23rd.
SPEAKER_02:That headline didn't have a chart. This total aid funding, is that coming down the all the pointers on the total aid funding? When that's that down the road a little bit, right? When we talk about SD, that's getting confusing.
SPEAKER_00:Absolutely. And we've got a lot to say on that.
SPEAKER_02:Is that next? Well, I was just making sure I I wasn't supposed to pop it up. People are gonna be watching this, they're gonna say those two were off. Well, if you've seen how much Jim's been traveling and how much he's been working and everything else, you'd understand. FBA payment rates supposed to come in next week.
SPEAKER_00:Yeah, that's the farm bridge farmer bridge assistance program. I think today at five o'clock, yeah, pretty soon. It was the uh the the deadline for having your acreage information in. And during the week of December 22nd, that's next week, they're going to announce the payment rates. Now, we've got uh a couple from Farm Doc and my good friend Paul Neefer.
SPEAKER_02:Mr. Neefer, I'm gonna read Mr. Neefer's there's small. Print folks, and I know a lot of you are listening to this on the vocal podcast. Here we go.
SPEAKER_00:Say the per pay per per estimated per EPA payment per acre.
SPEAKER_02:Yep. And I'll tell you the commodity. Let's go with corn$46. Soybean,$32, wheat$34, cotton 100, rice 116, peanuts 88, sorghum 42, oats 80, barley, 24. That is from Mr. Paul Nefer, the farm CPA. And we do have a farm doc one that has very, very similar numbers. Looks like maybe rice is a little higher, but they're all within a couple dollars. Add some uh color to that, Jim.
SPEAKER_00:Well, the now remember though, there's going to be a factor in these payments because they got to make sure they fall within that$11 billion for these payments for real crop producers, Tommy. So, and then they'll always have a top-up if they if they don't over overspend. So, but the the interesting thing on those payment rates in both Paul Nefers and Farm Doc, uh, that's University of Illinois primarily, soybeans is relatively low. Now, if you recall, they're using the December WASDI, and we had that run-up, what, a buck and a half in soybeans. And even though the current I feel for the soybean growers, because we've, as we said, there are seven-week lows, and they were down 27, 27 and a half cents this week.
SPEAKER_02:So it's a kick in the pants.
SPEAKER_00:Yeah, they're although 60% or more of people who grow soybeans also grow corn. So they're gonna get it one way or the other. But I think the soybean payment is is you know too low from the hurt, from the hurt out there in soybean country.
SPEAKER_02:Can I add to that also? There's no basis in that. So if you're in North Dakota and you got an ass kicking of a dollar basis, there's no money for basis. That's just a flat price, as if everyone sells soybeans at the border trade price. And that's not how the world works, Jim. And that's what happens when government gets involved in these things. They can't get to the little details that everyone knows is common sense, but there's not enough spreadsheets in the world to give a payment based on basis, correct?
SPEAKER_00:I agree. They want it quick, quick and easy. And note that they'll make the payments no later than the end of February. So that's a pretty good time, that's a pretty fast timeline for USDA to get this out, to get the payment rates announced next week, sometime next week, and to have the checks probably go right into the uh into the bank accounts uh by no later than February the 28th. And that's cash flow. That's needed cash flow. Now, we had an official, uh Richard Fordyce from uh FCAP and USDA, FSA, et cetera, come out the last few days and say, this is it from USDA, where we have a money crunch here, a funding crunch. To me, that was a signal to Congress, to farm state lawmakers: if you want additional aid, which I think they want, it's gonna have to come from Congress. And we had House Ag Committee Chairman GT Thompson from Pennsylvania, and uh Senator Bozeman, who you mentioned before from Arkansas, the there's GT Thompson and Bozeman from Arkansas, the Senate AG Committee Chairman, they are both saying the need is there, and they're asking USC officials, how much additional farmer aid do you think is needed out there that you can't provide? So they're they're going to want to put it in a must-pass bill probably in January, Tommy. So we're going to watch that. We'll monitor it each week on this program as far as the odds of it coming through, because they could get, as usual, tied in with all sorts of politics, but the need is there for sure.
SPEAKER_02:100%. 45Z provisions.
SPEAKER_00:That's the one where the Treasury finally sent over to the Office of Management and Budget the information for 2025 tax issues. That's uh so we're starting to see some progress on getting some details out there. And uh some analysis from the University of Illinois, Scott Irwin, I think was his name. And we have had this in uh in my updates earlier in the week, Tuesday or Wednesday this week. He he he put some not bad payments for producers. Let's bottom line on that, Tommy. We need domestic utilization of U.S. soybeans and corn to get us into that next gear up on prices, to get us above the cost of production and truly profitable prices. The programs like the Renewable Fuel Standard Program, RFS, the biodiesel uh program, the renewable diesel program, and the 45Z, which is uh sustainable aviation fuel, carbon sequestration, that's more like 45Q program, but we need the details for 2026 forward. All they were going to announce any day now are the details for 2025. So the market still needs some of these details, but I'm not going to be negative on this. Once we get the details, we can pencil out how much of an incentive this will be, not only for the throughput industries, the processors, et cetera, for the great uh agriculture system, but also individual producers, soybeans, and corn primarily. So we're getting closer to getting information that we can do some analysis. But this could be a pretty good uh shot in the arm next year.
SPEAKER_02:And you touched on RFS plans, right?
SPEAKER_00:Yes, they're gonna come out. Uh we had this months ago, Tommy, and the market first got reports this week. Sometimes we're pretty early on on this stuff. We said it would be sometime in early 2026 when the EPA, the Environmental Protection Agency, would release details on the mandates for 2026 and 27 2027. They call them RVOs, they're really mandates of how much corn diesel. And they're just they're just so busy on, I guess, other things. I really think it should be out now so people can plan, but uh it is it is what it is. And we're gonna know, and also on the uh remember the reallocation, we're gonna see the reallocation of those SREs that they gave some waivers to. That's why EPA wants them uh to announce both of these together, the mandates for 2026 and 27, and the allocation factor of of uh how it's gonna affect those waivers and how many are gonna be reallocated. So we're gonna have a lot of news come out early in 2026 that that's going to affect the markets and the business of agriculture, and we'll monitor it.
SPEAKER_02:Absolutely. This is on everyone's mind. ACA Obamacare subsidy loss could hit farmers, but early 2026. I've heard more talk about the cost of health care in the last few weeks from individual family and friends than I've heard in the prior five years. Go ahead, Jim.
SPEAKER_00:Well, they're they're seeing some. A lot of farmers are a participant in Obamacare or the Affordable Care Act, which is what Republicans call it the Unaffordable Care Act, because of the all the huge incentives that have to be paid to make it a viable program. And this is where President Trump and uh key Republican leaders are saying, wait, we need to reform. Let's get and watch Trump. He's gonna come after the insurance companies big time because those those companies have been the biggest beneficiaries of the Obamacare and Affordable Care Act. Billions and billions of dollars. And Trump is right there. The program needs to be reformed. Now, what the House and Senate did, the House passed a bill, but it's not going to be the final bill, Tommy. Bottom line, when Congress comes back in January, I fully expect a bipartisan agreement, it won't be easy, will be had to some sort of an extension, one year, two years, et cetera, for the Obamacare and Affordable Care Act. Maybe not, maybe including the enhanced uh incentives, but it's going to come with some reforms, payment limits, uh, et cetera. Maybe a movement more to where some of these insurance companies won't have all those lucrative, you know, lucrative uh uh avenues to go under that program. But the reason it's important for Republicans is that if something doesn't happen, more than a few rural citizens uh subscribe to Obamacare Affordable Care Act. When you think about it, if you if you're a farmer and if your spouse does not work off farm, many of them do, and many of them, that's how a farmer gets insurance through a private business. Well, if you don't, that's why more than a few farmers have these policies, and that's why this is a big increase coming up if Congress doesn't work out a solution. But I think it's so significant that if the Republicans don't do something, they're gonna pay at the polls in 2026. Republicans know that.
SPEAKER_02:I think we touched on that a little bit. We touched on that. We touched on that.
SPEAKER_00:I don't know about next week. It could be next week. I just don't know the timeline, but uh, they can announce it whenever they want. But as we uh pointed out, you're gonna go through multiple steps in order to get the cattle back into the United States, and it's gonna be phased in anyway, it's just not gonna be all Mexican cattle. And as I said, they're gonna have to go through four testing patterns, three in Mexico, one in the United States. So that tells me, at least from a trader perspective, it's not gonna be overtly bearish because it's gonna take a while. I think it's prudent that they're doing it that that way because you you've got to be very cautious on this one. And it looks like if it goes the way that we're we've explained, that's a pretty cautious approach, and I think it's a needed uh approach.
SPEAKER_02:And just talking about that, we haven't really seen much of that Argentine cattle come in. I mean, these markets have exploded higher here in feeder cattle. We're back to cash trading ten dollars higher than futures. Uh the trend line in the bull market, because they do that video with Carrie Artech. We touched the major, major, major five-year trend line, but we didn't break it. And the the trend in cattle is still up if you're into long-term trading here. Speaking of cattle, and the and you could tell Jim that they're getting ready to do something because the USDA has uh adjusted its website, and when you you know they're getting ready to yeah.
SPEAKER_00:Can we show the banner they're putting up on the main on the main USDA website?
SPEAKER_02:Is it I saw that this week?
SPEAKER_00:Yep. President Trump is putting farmers first. See USDA's action since January the 20th, 2025. That happens to be inauguration day. Trump is putting American farmers first. Well, we're gonna see that that's not what I'm hearing so far, relative to some of the negative on the tariffs, but on this, what we call SDP, supplemental disaster program, stage two or phase two, Tommy. That was the biggest story I had to cover this week. I've I haven't had so many emails from farmers, crop insurance agents saying, what is USDA doing? It's not farmer friendly, by the way. I'd like to, I hope Trump hears about this, because they flipped the script on uh SDP2. They're they're they're going to a spring price, not a harvest price. And that's uh significantly lowering the aid that farmers are going to get, the farmers who qualify. There's a lot of other steps that farmers have to go through in order to uh qualify. And it's gone up to Brooke Rollins, USDA secretary. She has heard the complaints. Now, I don't know whether they're going to change some of the things that they did, but Brooke Rollins knows that this is not going down well in farm country at crop insurance companies and farm state lawmakers, bipartisan. They don't like the way someone or some officials in USDA have implemented what Congress uh pointed out. Now, I think we have a table that I can go through, Tommy.
SPEAKER_02:Yeah, we got a lot of things there. I have to say, as far as Brooke Rollins in the news this week, she was a little quieter. I know she's out running around working hard and stuff, but I didn't see her name pop up as much in past weeks.
SPEAKER_00:She's doing op-eds. She had one on Fox News, she had one on the Hill. I think she's going that way, and maybe she might just be on vacation. I gotta check on that.
SPEAKER_02:Okay, this is the chart. Uh total disaster aid.
SPEAKER_00:Let's go through this and I'll explain it. Remember, at December 21st, last year, Congress authorized almost$21 billion in disaster aid. Now, as part of that, SDRP supplemental disaster relief program funding was$16 billion. And almost$5 billion was block grants and for livestock. That's the ELRP. Now, the first part, SDRP one, uh either phase one or stage one, they've released$5.8 billion of the$16 billion available. That means there's a little over$10 billion yet to be allocated. Farm because they had the factor. They had a 35% factor. Trust me, you SDR people, you're gonna get a top-up payment, but it's gonna be later rather than sooner, May or June. And it could be a hefty amount. Now, SDRP2, that's where we have all the controversies. The expected payments are estimated at$2.7 billion. And then they had some on-farm storage of uh of$45 million and milk loss of$1.65 million. Now then we go to I'd have to see, I don't see it. Let's see. There we go. The total, yeah, the remaining funding for SDRP top-up, that's supplemental payment on the top of the supplemental, is around$7.5 billion. This is why some farmers who got the$5.8 billion in supplemental disaster relief program one are saying, you mean we have to wait until May and June to get the top-up? Yes, why? Because the sign-up for SDRP2 ends April 30th. And they it's complicated, it's a very complicated program. But what I found out again today is there are a lot of data problems in SDRP2. Apparently, a lot of the numbers that farmers are telling them, these are not my numbers, these are not my production.
SPEAKER_02:Oh my!
SPEAKER_00:And so USDA looked into it and the farmers were correct. So it's going to take a month or two, probably, for USDA to square that data, Tommy. So that that is the reason I really think that this is going to come out uh later rather than sooner. And also, Congress, I don't know whether they're going to legislate USDA to implement the SDRP2 program the way they thought uh was intended. And some USDA officials, and I put that in quote, interpreted the law far different than what Congress thought that they were legislating. So this is an issue that's going to linger, Tommy. Trust me.
SPEAKER_02:Real quick, Jim, we have a lot of people listening to this podcast who may not understand what SDRP is.
SPEAKER_00:And uh supplemental disaster relief program. S supplemental, D disaster, R for relief, P for program, SDRP.
SPEAKER_02:Well, I'm glad you knew the answer. That I'd be embarrassed if we didn't. All right, let's keep going here. We're getting towards the end, and we do have a couple other things to talk about that you didn't. I want to get to the Supreme Court at the end, but that's not uh here yet. Union Pacific Corpus Point.
SPEAKER_00:Oh, they filed us seven at least 7,000 pages.
SPEAKER_02:7,000 pages?
SPEAKER_00:7,000 pages. This is typical for a merger. Yes. Now I didn't go through all of it, but I did put some of the highlights in today's update. So get on Tommy's site and look at uh it's near the bottom under my transportation and logistics category on it. And you get some pros and cons. And this is not a shoecase that it's going to be approved, and we're not going to have that approval or rejection until sometime into 2026, probably well into 2026. That's the bottom line, Tommy, that they had to justify. And of course, the the two railroads that want to merge put their own spin on it. But I think it's it's it's uh worth reading on that one. It would be the first truly transcontinental railroad in the United States. This is potentially big news, but it's again later rather than sooner. But they the the the clock is ticking now because they file the information with the transportation with the STB surface transportation board.
SPEAKER_02:I got a few more things pop up, and then you said at the end you wanted to do a true, true lightning round. And I think you're just gonna talk about things that you want to talk about. And you know why you could do that? Because it's your show, and we don't have to go on commercial break, and you're the man. All right, Kennedy Center will be renamed Trump Kennedy Center, White House says.
SPEAKER_00:Yeah, there we go. That tells you, you know, Trump is uh not on the board, board of directors. I think he's chairman of the board of directors of the Kennedy Center, and of course, the board of directors this week renamed the Kennedy Center, the Kennedy Trump Center. That's Trump 101.
SPEAKER_02:He's gonna that's Trump on the Trump train, yeah. Dude, Trump takes action to somewhat ease marijuana restrictions.
SPEAKER_00:Yes, and this is this is a major story because he's changing the the onerous uh uh category, the definition of uh graphs, if you will, marijuana. And so it's not gonna have this the uh the uh the uh law coming down so harsh on on marijuana. And this is a gonna affect all this all the marijuana industry, like here, uh Virginia, you have to have special doctors' permission. Now you can travel to Maryland and they have open stores to get you know marijuana. I think this could impact uh those types of stores that you've seen in Maryland, California, Colorado in time. But bottom line, they Trump uh lessened the significant albatross on taking uh marijuana. There's a political overtone to this.
SPEAKER_02:I think I have a picture to apply to that.
SPEAKER_00:Younger voters. Yeah, Trump doesn't smoke or drink, but this is a good graphic.
SPEAKER_02:Who put that up? Democrats don't like weed anymore. Trump smoking a little something, something he got from somebody Snoop Dogg.
SPEAKER_00:It's for medicinal purposes if he's doing it, let me tell you. But he he listened to the people who are saying, Look, I take it for pain, and it's it's helping me. And I more than a few people have told me it helps them out medicinally. And they're not lying to me. These are older people who actually do it.
SPEAKER_02:All the things you can go to the drugstore and get a script for that help with pain. Everyone knows if you smoke a little, take a little, eat a little, do whatever, it it'll it'll lessen the pain, and you might need a bag of Doritos in the in the meantime, too. So that okay. I'm out of pictures, I'm out of pop-up headlines. I believe you wanted to go old school.
SPEAKER_00:Well, we I don't have the list. Actually, frankly, I didn't have time, but we can go through. There were so many things that happened this week. We had California gave an initial positive step of finally author uh not authorizing, implementing uh E-15 for ethanol out in the state of California, but I will put a dose of reality on this. CARB is the agency within California that has several more steps that have to be followed in order to get what I would say general uh implementation of the E-15. This is a step in the right direction that it passed some requirements, Tommy, but I think we're going to be well into 2026 before we see the real positive nature of E-15 year-round E-15 in California. Now let's look at year-round E-15 in the United States. Remember, last December, as part of that budget reconciliation bill, I'm sorry, as part of the aid bill that we got the$10 billion in ECAP, the farmer aid program, and the near almost$21 billion in ag disaster, December 21st, 2024. Initially, there was a uh in the legislation uh uh year-round E-15, but it was taken out at the very end. There is wide bipartisan support for year-round E-15. So this is going to be attempted again, I think, in January in a must-pass bill. What Republicans tell me, Tommy, is they want President Trump to come out and support the legislative effort toward year-round E-15. So if he does that, then you up your odds that this thing is going to pass Congress and a must-pass spending bill. Now, the administration can do it administratively, but it's far better to get this codified by Congress. So that again, that's another thing we're going to see probably in January 2026. That's going to be a very important month for a number of things, including whether or not uh the all the Trump tax cuts, the equipment depreciation, the further tax cuts on taxes, somewhat Social Security, but not all, and some other aspects of the one big beautiful bill are going to come into play, which Treasury Secretary Scott Bessant keeps on saying we're going to have a gross domestic product for the United States of 4% or above. If that's the oh, if that's the case, you are going to hum, and that'll be very good news for all Americans. And it'll be good for the uh equity market. So I just hope I don't care who's president. If they have a good package, uh let the economy go without uh inflation kicking off. So watch that one. Uh overall, this con we had a number of USD officials and USDR and CFTC officials confirmed. Uh so I think USDA has now 15 upper tier officials, undersecretary, deputy secretary, etc., now approved by the Senate. That just means uh Brooke Rollins doesn't have to do it all. Maybe this is why we're not hearing from her as much. She finally has a team in place, and that's for the good, because these people, if they follow the intent of the law, as opposed to not following it under like SDRP2, then she can go out and do what any ag secretary should do, Tommy. Listen to farmers and ranchers of what they're of what their concerns are. And if you listen to them, that's the best way to bring it to the to the one person who can really help her, and that's President Trump. If he hears a problem, he usually addresses it one way or the other. That's another thing I wanted to talk about. The uh labor. GT Thompson will eventually file his bill for year-round migrant workers. That'll help the dairy industry. But they need a push again from President Trump on that. But Trump has some officials, including Stephen Miller. You can look him up, S-T-E-P-H-E-N Miller. He gets very conservative on allowing either even seasonal workers into the United States. So once we, if we can pass his hurdle, maybe we can get a more free flow of really needed uh labor workers for the dairy industry, especially the specialty crop producers. That brings yes, yeah, all those specialty crop producer, and that brings up another one, Tommy, on specialty crops. USDA's$12 billion aid package includes$1 billion for specialty crops and sugar. It should be double that, at least double that. And law may bipartisan, you had 100 lawmakers, both political parties, write to the administration saying, you know, specialty crop producers and sugar were really impacted. I think we said last week a number of sugar sugar beet growers were losing three to four hundred dollars an acre with some new sugar beet growers, seven to eight hundred dollars an acre. That's total pain, Tommy. And this is another one. I talked a little bit on Agri-Talk on this, but for those farmers, and there are, and I understand their position, they're saying, you know, there's going to be some juncture at which we cannot count on all this aid. I agree with that. I would rather the lawmakers, farm state lawmakers, rather than work on a skinny farm bill too, beef up again what they did in the One Big Beautiful bill under reference prices, because we've had the cost of production for agriculture since COVID go up around 30%. If you recall, the increase that was in the One Big Beautiful bill signed July the 4th was a 10 to 20% increase in reference prices. So we need another kick up. Old people will say this funds, it's cost so much money. Here's your political angle. If we don't solidify the planting of major crops and all crops in the United States, that will eventually lead to uh either a concentration of acres to the big producers, to the large, you know, big acreage producers, or fewer acres planted where farmers go out of business. And what country do you think would pick up the slack?
SPEAKER_02:Brazil, Brazil, Argentina, south.
SPEAKER_00:Yes. And what would that mean to food prices? So by helping the business of agriculture, you are tempering potential increases in the future of food prices. So that's that's a pretty good way to justify some of the income transfer assistance going to farmers. And I know more than a few say, you know, we've got to learn to stand on our feet. I hear that. But you've had two to three years of lower prices, and too many farmers across the United States have eaten into their total equity. And just talk to an ag banker, and that's what that's what this town is doing. Around 50% of all this farmer aid coming out, Tommy, is going to be used by farmers to pay down the debt. Yes, it can lead to somewhat of another boost in fertilizer prices. That's always the case when you have income transfers, that they get built in to a further appreciation of uh input prices. But let's hope Trump does other things to help uh the the supply of uh of fertilizer. But I wanted to get that through for a perspective on this sensitive issue of farmers' uh aid, because this aid is only covering 25 to 30 percent of farmers' losses. So that tells you this is not a bailout. Even if you got double that, it it's just there's still you need the marketplace to help you out. And that's where a combination of China buying not just soybeans, but uh mylo, sorghum, uh uh maybe beef, etc., and also the domestic utilization for programs that we talked about. So let's have a combo of both trade policy and domestic utilization of our two biggest commodities, corn and soybeans. Then you can say, hmm, maybe this, maybe the future years will be a lot rosy, a lot rosier. I'm not gonna say golden era until we can really see it on the horizon. I just I don't like to predict a golden era until I see the glow starting. The glow is not starting, Tommy.
SPEAKER_02:No, no. When they say golden era, I always say, What are you smoking out in agriculture? I just had to bring that one up one more time. Okay, last but not least, I got to reel you in. Supreme Court, when the hell are we gonna hear from these men and women?
SPEAKER_00:Any day now, it's either later this within the next week or so, or early in 2026, and we're talking what what we're waiting on for the Supreme Court. That's whether they're gonna rule whether or not Trump's tariffs uh are constitutional. Uh, the all those charges of the of the funds coming in. And I'll tell you, I I've heard so many different scenarios from different lawyers, and I'm just gonna wait now to see how the Supreme Court is gonna rule. The majority of lawyers are copy uh news seems to think that they'll rule against the uh Trump administration. I'm not quite quite so sure. And it could be a split decision, it could be something like yeah, it could be something like from this time forward, in other words, all the tariff money that's coming in uh keeps in that pool that uh 200 billion billion.
SPEAKER_02:Yeah, 200 billion.
SPEAKER_00:Yeah, the reason why see Trump keeps on saying he did on the on the 12 billion dollar farmer aid program, the the bridge money, he said that was coming out of the tariff uh funding. It is not 100. He's incorrect, but he uses that uh rhetorically, and he does that over and over again. However, if they were to use those tariff funds, Congress, I think, would have to approve any such funding coming out of tariffs. Uh, that's above and beyond already legislation. That's the conundrum. So that's why it's gonna be important whatever, whenever this ruling comes and what it says, and how it says it. And again, we're gonna pounce on that big time and a special report on your site, Tommy, will be there when that ruling comes out with the news plus analysis.
SPEAKER_02:Very good. Do you have anything else you'd like to say, the American Farmer Jim? Because they could be watching this on Christmas Eve, Christmas Day. This is gonna come out Saturday, folks. The uh Weissmeyer's Perspective is gonna come out Saturday at six in the morning starting this week.
SPEAKER_00:Yeah. Well, record corn exports. We just need to get the price up. Soybeans are in a conundrum. As we said, seven-week lows, 27.5 cents down this week. But let's hope China continues to purchase U.S. soybeans, which I think they will because it was a geopolitical agreement. Let's hope eventually that that 10% uh fentanyl tariff comes off, then U.S. soybeans become competitive. Watch the payment rates next week, and we went through them, and they're nothing to sneeze at. This will help uh provide much-needed initial cash flow that farmers need. And then we have the top-up payments coming out for the supplemental disaster relief program, both stage one and stage two, that won't come until May or June. But more aid is on its way. And then Congress is also going to debate whether or not to have an additional uh farmer aid package as part of the must-pass spending bill. In January, they've asked USDA to tell them how much additional funding do you think is needed in farm country? Bottom line, the aid, multi-billion dollars in aid is coming out there. It is going to help cash flow, it is going to be able to have farmers pay down some of their debt. And but more is needed, and it looks like more is coming, Tommy. That's that's not a bad Christmas. Yeah, that's not a bad Christmas.
SPEAKER_02:That's not bad, but yeah, lots to talk about. 2026 is gonna be lit as long as Trump's president. The news cycle is going to be uh moving fast. You need to get some rest. This is the worst. We were like misclicking, miss talking, coughing. Your voice is uh strained. I think a nice beer would help that, Jim.
SPEAKER_00:No, I got it to the left of me. It's gonna start right when we get done. Negro Modelo, Mexico.
SPEAKER_01:Well, we'd like to think of Mexico. Well, there you go. Okay, I'll keep it there. Merry Christmas, Jim. Merry Christmas.
