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Tommy Grisafi is the main host and content creator for Ag Bull Media.
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Wiesemeyer's Perspectives | March Madness
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We press Deputy Secretary Stephen Vaden on fertilizer concentration, China trade,
We connect the dots between war-driven energy shocks, fertilizer availability, and the policy decisions that shape farm profits. We also react to the fallout from the Stephen Vaden interview, from biofuels and trade to rebuilding confidence in USDA data.
• Iran conflict risks and the Strait of Hormuz impact on crude oil and diesel
• Real-world fuel cost swings and why hedging matters again
• Fertilizer supply options, including Venezuela urea and Jones Act waivers
• EPA Renewable Fuel Standard timing and what RVO levels could mean
• Year-round E15 delays and the slow grind of implementation
• U.S. China trade talks beyond soybeans, including beef plant approvals
• Farm aid package debate and why cotton, rice, and sugar need attention
• Crop insurance deadline and risk management basics
• Federal Reserve outlook with no near term rate cut expected
• GLP one demand signals and PRRS risk in hog markets
• USDA data trust problems and the push toward digital surveys
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Welcome And Premium Updates
SPEAKER_01Welcome back to the AgBowl Podcast. We're glad you're here. Tommy Grassofi. I'm in Nashville, Tennessee at the Nesvik Trading Office, working on a kind of remote setup. So excited to announce to you that Nesvik and AgBO Media are moving offices. If you're ever in Nashville, Tennessee, we're moving right next to the historic, can't even say it. I'm so excited. Historic Ryman Theater. Now with that, we are recording tonight. It is Sunday, the 15th. The markets aren't open yet, but crude oil is projected to open four to five dollars higher. And it could be a very dynamic market. I want to get the advertisements and all the BS out of the way right away. And I'm advertising for myself. We'd love to have you on the premium side.$25 a month,$250 annually. Mr. Weesmeyer, you can find all his content for free at www.agbull.com. But all the good stuff, all the yummy stuff that we're doing all week, the text alerts, the audio alerts, everything, the daily morning update, afternoon update, hedge recommendations here in corn, wheat, beans, and cattle. We're also talking outside markets, and we have a whole lineup of new contributors. Okay, we got that out of the way. But wait, there's more. Last week we had the chance to meet with Deputy Secretary Vaden. Now you probably know that Jim's behind the screen here, laughing, giggling. But read this comment, folks. Jim Wiesemeyer is the dean of Agricultural Journal Journalist. And it was a pleasure to join him for a wide-ranging hit on all things USDA, including trade, biofuels, farm aid, data collection, sugar policy, and moving to the heartland via reorganization. Well, thank you, Deputy Secretary, Mr. Stephen Baden. It was a pleasure to spend 90 minutes with you and an absolute honor. Keep up the good work, and we know it's hard work, so we're very proud of you. Okay, enough of that showing off and everything else and teasing Jim. And Jim, when he comes back from this opening, he's going to tease himself a little bit. You stick right there and enjoy the show. What do you think that means? Break it down.
SPEAKER_00Usually that means I'm one of, if not the oldest, ag journalists, but I did take the compliment because we'll talk about the Vaden interview later on, Tommy, but I got so many emails and personal people coming up to me. I was in Nashville this past week. You were in Florida, and I had more than a few people at the Stone X conference come up to me and they said they listened and they viewed the podcast and they really enjoyed it. And you know, keeping somebody's attention for 90 minutes is difficult at best, but he did it. And I'll add more on that later, Tommy.
Iran Conflict And Oil Price Shock
SPEAKER_01Yeah, absolutely. Well, we have an action pack show. And what people don't realize, Jim, is that uh well we were having internet problems, and so after the interview, he spent an additional half hour with us just chit-chatting off the record, but uh a real person, and that's what we need in DC. Let's get right into the headlines. And boy, do we have them. Let's start with this little doozy right here. War with the Iran update.
SPEAKER_00Yeah, uh that's you know, some weekend updates. Trump has said he has rejected Iran's deal for a compromise as the as the Gulf War continues to disrupt the energy markets. As you said, although markets aren't open up, the future signals indicate up four to five dollars. Now, now Turan said that that that's not the truth. So this is a war of messages between the two countries right now. But the the biggest news is that Trump urged other nations to help out the U.S. and Israel in protecting the Strait of Harmuz, Tommy. And a number of countries have already said they would. Now that's not going to happen overnight. And but and they're bombing along the sides of the Strait of Harmuz in order to prepare for the eventual safety zone in that area. But the long-term consequences, uh, if they can ever get control, there's the Strait of Harmuz. And look how narrow the narrowest passage is. And you can see why, if you don't have it controlled, you're sitting ducks if you go through uh you know with a uh you know vessel and Iran doesn't want you to. And so that's why the the focus is on this, and I think it'll take a week or two probably to get this thing controlled. But long term, Tommy, if this is ever solidified as a safety zone, that's very good for trade, not just between for the US, but world trade, since so much Asian trade, energy trade, agriculture trade goes through that strait. So there's your long-term significance. But right now we have price impacts. You said on crude oil, over$100. Energy Secretary uh Wright, uh, Chris Wright, was on MBC's Meet the Press today on Sunday, and he predicted gas price relief later, later in uh by summer, by summer, uh they could fall three uh below three dollars per gallon again, Tommy. But that'd be nice. But for balance, Gas Buddy dated cited in that interview that the national average is now three dollars and seventy cents per gallon. That was Saturday, and that that's that's what rose from 294 a gallon on March 1. That was the day after that conflict began, Tommy. So yeah, but the the other ones, the other update is Trump has invoked the V Defense Production Act to begin California's on offshore oil operations. I can imagine the uh Democrat Governor Newsom uh has some negative things to say about that, but you can see the Trump administration is continuing to take action.
SPEAKER_01Here's Mr. Wright, he's been very active in the press.
SPEAKER_00Absolutely. And so Kevin Hassett, National Economic Council director, said today on a news program that he thinks the conflict will last four to six weeks. We're beginning the third week. So let's say three more weeks, and let's see that timeline if it's realized, okay?
SPEAKER_01Yeah, I do have a little color. I just drove this morning from Valparaiso, Indiana to Nashville. This is wild, Jim. I wanted to get a snack or something drink. I was kind of looking at gas stations along the road. And you know how these loves gas stations and all these big ones have these giant signs off the highway. Well, as we know, folks, the diesel price, which all you farmers know, using red road grade, off-grade, whatever. And but the one sign said diesel 540, and another side of the street said diesel 510, and the other side of the street also said diesel 480, and there was such a wide ass. Now, I don't know if the person didn't go in the thing and hit the clicker and change the price, or really that gas station had five tankers come in yesterday, and that was the price, and they sold it affordably. But if you're a semi and you're rolling down the highway and you have to get three, four hundred gallons of diesel, 50 cents matters, folks. Matter of fact, I'll give you a little more color. I flew home from Florida this week, and I was telling my friends I was traveling with, it's a huge big deal for the airlines that the price of uh fuel went up, all fuels, right? Ah, it's no big deal. I said, listen, you don't know what the hell you're talking about. So I asked Grock, ChatGPT, the plane I was on on a three-hour flight, how much fuel it would burn. And it was about 8,000 gallons, right? And so if fuels went up a dollar, dollar fifty, that's a ten to twelve thousand dollar per flight extra cost. Now I see you winding up, you're waiting for your tip.
SPEAKER_00There's a Wall Street Journal commentary just on that topic today.
SPEAKER_01Oh my!
SPEAKER_00I didn't Alicia Finley, one of my favorite, one of my favorite writers, Alicia Finlay, is commenting on that. The airline fuel is getting to a critical level. That means it's really starting to cut into profits, and we don't need that for the airline industry. I I like Delta.
Fertilizer Supply Plans And Jones Act
SPEAKER_01Right. And just to regress a little bit, the airlines used to be phenomenal hedgers, phenomenal hedgers, but we've had such steady prices. And when you look at the curve of fuel, it was like, hey, fuel's a barrel of oil, which a barrel is 42 gallons, folks. There are different size barrels, of course, but when we talk fuel, a barrel is 42 gallons. It was like 55 to 65 dollars for five years, but that curve inverted. Remember in Top Gun, when Maverick said we were inverted and we gave him the bird? All right, back to the show. We really digress now. But you get my point is hey, you're everyone's like, oh, they hedge. Oh, not this time, not this time, sports fans. All right, let's get to the easy subjects. Fertilizer help on the way.
SPEAKER_00That was news that initially broke uh Friday. Yeah, USDA Secretary Brooke Rollins indicated big news ahead. Now, that'll probably come this week, but they did announce uh one of the first steps involves easing access to fertilizer supplies from Venezuela. Now, it's not gonna be the grand plan because even though they have a capacity, Tommy, to produce about 3 million metric tons of urea annually, they've got an aging infrastructure, and incrementally it's gonna help. So, other things under review that may be announced this coming week is uh they're they're evaluating a temporary relaxation of domestic shipping rules to reduce those transportation costs for fertilizer and other commodities, not just fertilizer. And that involves adjustments to the Jones Act. Now that requires goods transported between U.S. ports to be carried on U.S. flag vessels, which happen to be more expensive. So waivers have been used in the past, Tommy, for emergencies to approve uh improve supply flows. It's controversial in that our shipping industry usually gets upset because they they like that Jones Act as a as a protection for them. But uh bottom line, this would just be another incremental step. The biggest thing, two big things to help the fertilizer and the overall energy price situation is to get a ceasefire that Trump agrees with, and two is to protect that Strait of Harmooz. Those are the two. Nobody knows the timeline right now. As I said before, Scott Besson indicated it could be another, uh it could be a total of four to six weeks weeks. We're in week number three.
SPEAKER_01Yeah, a lot of moving parts there. Yes. And just by saying fertilizer is going to go down doesn't really make it go down, correct, Jim?
SPEAKER_00True. And you know what we saw, if I read the room right, when we were in Peori, Illinois at the Strom near Peori, Illinois, at the Strom Family Farm Conference, more than a few farmers in that big meeting that were already covered on fertilizer for fall fertilizer, yeah, for fall fertilization. So they dodged a bullet so far.
EPA RVO Rumors And E15 Delays
SPEAKER_01Yeah, but I will say this if they're not covered, they sure as heck weren't coming up to us to brag about it. No, they weren't where E15.
SPEAKER_00Oh, I've got a long story in my week ahead in Washington.
SPEAKER_01Okay, I apologize. Which one?
SPEAKER_00Oh, EPA update. Oh my goodness. Yeah. We've got we've got uh EPA has said they will announce uh a series of of uh important market-sensitive items by the end of March. Well, the you know, it's middle of March, so I think we'll have it by the end of the March. But what we're talking about is the mandated levels for both corn-based ethanol and bio uh based uh biomass-based diesel and renewable volume obligation. That's the mandate. RVOs mean mandates. Now, for the diesel, the conjecture centers on 5.4 billion gallons, Falmi. However, that's all yeah, Bloomberg initially came out and said the other component of this announcement is it could be 70 percent of prior exemptions for the SREs. That's the for the you know, you know, for the uh refiners, small refiners. It could be 75 would be reassigned to the non-exempt refiners, larger refiners. Now, if that's the case, some people even said 75 percent, that would take the effective uh RVO for 2026 to closer to 5.61 billion gallons, and that would be farmer friendly. And if you recall what uh Deputy Secretary Stephen Vaden told us in our interview that unless it changes from the last comment he heard that U EPA was going to announce, this would be a very friendly announcement for agriculture, both corn and soybean producers. So let's hope he's right. And this is Steve Vaden, who's been rather deregul, very much uh deregulatory and pretty friendly to the to the ag sector so far.
SPEAKER_01And and things I've heard from people is just give it time, give it time. We remember he said that we can't fix this all in a few weeks, it takes time, and we're working on it, and we hear you. We'll talk more about that in a little bit. Okay, that one was EPA. This one is where is your round E15?
SPEAKER_00It goes on and on. We have a representative from uh Iowa, Feinster, who's by the way, running for Iowa governor. He keeps on saying for well, for a while he was saying, oh, it's gonna come out today or tomorrow. Well, tomorrow never came. Now he's saying this week, this week. The problem is it keeps on lingering. It keeps on lingering. So the the the problem is they're looking. Number one, we need a bill. Remember, they were supposed to have legislation in final form by the 25th of February. Well, they didn't make it, so it could be this week, but then the next step is how do you get it approved in Congress, Tommy? They're looking for a must-pass bill. The latest one is a likely coming supplemental spending bill for additional expenditures due to the Iraq war, because we're spending about a billion dollars, if not more, a day. So the White House is gonna be coming with at least a supplemental spending request of at least$50 billion. So that will be seen as a must-pass bill. In order to get enough Democratic votes on it, they're gonna load it up with other sweeteners, and that could well be year-round E15 to get more, you know, democratic votes as well from farm country, and also a possible new uh farmer aid package being pushed by Senate Ag Committee Chairman uh John Bozeman, Republican from Arkansas, and appropriations guru Senator Hovind from North Dakota told me. Yeah, yeah. So all that's wrapped up into we'll eventually get that bill released, and then the next, I think more important one is what must have piece of legislation are we ever gonna put it on?
SPEAKER_01Mm-hmm. I it's I this is like a high school drama with this E-15. Chip Florey talks about it a lot, he's very passionate and educated about the subject.
SPEAKER_00Well, even though it's gonna take time, some of the initial analysis of the impact of of going to E-15, I think has been too robust. The reason, even when it's announced, it still has an implementation phase. Look how long it's taking California just to approve E-15, let alone year-round E-15. They still have not approved it. And I wrote a story last week, by the time all is said and done, they're not going to go through all their regulatory hoops until probably sometime next year. But when you initiate this initially passed the California legislature, the usually too optimistic U.S. biofuel industry thought that it would it would come a lot sooner than it is. I was skeptical at the time because I know California's a Byzantine process on the regulatory morass that they have. And this is similar to the impact of year-round E15. I'm not saying it won't have any impact, but it's going to take a while to implement because of logistics, uh, the right pumps, the right wells, especially. And uh, but every percentage point increase in the utilization of corn-based ethanol beyond E10, that really digs into the supply, and that's always a good thing for corn producers.
China Talks And Soybean Demand
SPEAKER_01Absolutely. Well, let's talk about this. It this very much ties into demand.
SPEAKER_00It does because you've got these two are closers. They gotta probably do most of the heavy lifting in talks today and tomorrow, the 15th and 16th, in Paris, and that's ahead of Trump and G's conference uh convah, March 31 to April the 2nd. Now, Besson is Treasury Secretary and Greer is U.S. Trade Representative, both very knowledgeable, and this is not their first road rodeo. Uh Besson initially got China to commit to that. Remember the 12 million metric tons of additional soybeans by the end of February, and and and they they purchased that. Now, Trump Trump has previously said he wants China to buy 8 million more additional tons of soybeans. So we're gonna, you know, this marketing year. So we're gonna see if that's uh is if that is part of this uncoming uh upcoming summit. But as Stephen Vaden pointed out to us last Friday, Tommy, remember he said this is not just for soybeans, he wasn't anti-soybeans, but these talks uh involve for agriculture far more than soybeans. Now he didn't specify, but he said corn sorghum. They want the they want China to finally certify more than a few US beef plants. Right now they're not certified, we can't sell them beef, and there'll be a host of other things that if those are the deliverables, what we call a deliverable for that Trump wants. And I think Xi Jinping will give it to him. It's what China wants in return, some of which we may not know right away. But other topics to be they're discussing are the rare earths. I think China is worried about the where Trump's trade policy is going relative to the 301 investigations that are underway to be uh finalized by the end of July. So I think that'll be a big part of the discussion. But by the end of the month, Tommy, we're gonna have a lot of rumors, a lot of conjecture, but we're gonna see whether or not agriculture gets another bump up relative to Trump G talks. Now, during when I was in Nashville at the Stone X conference, also speaking, was my good friend, former U.S. trade representative. I can't even think of his name.
SPEAKER_01You'll think of it. I'll think of it in a minute. Yeah, tell a funny story about it.
SPEAKER_00Well, yeah, and well, he he I asked him afterwards. I said, Greg Dowd. It's Greg Dowd.
SPEAKER_01I said, Greg, I knew you would yeah, yeah, come on.
SPEAKER_00I said, Greg, some people think that this flare up and a flare-up at war with Iran uh may postpone the Trump Ji conferences, and within a nanosecond, he said, absolutely not. He said, This is on Xi Jinping's turf. He wants it to happen, and he wants some things too. So I thought that was of note because he's an experienced uh trade negotiator, Greg Dowd is now working for the dairy industry. But Xi Jinping needs this agreement just as much as Trump does. Their economy isn't doing that hot, and even though they're taking over uh many countries, especially Europe, for exports. He knows that he needs at least short term that U.S. market and he needs stable, a truce, if you will, with U.S. and China relations. And let's hope they both get it. I think that'll be good for both countries, Tommy.
Farm Aid Outlook And Crop Insurance
SPEAKER_01Excellent. All right. Speaking of good for countries, but good for this country, new farm rate package update.
SPEAKER_00We talked about it before. This is now being uh talked about more publicly by Senator Bozeman, and also as part of this supplemental spending bill that I told you about that's coming from the White House relative to wanting more funds to uh enact uh the uh munitions and and uh you know whatever for the Iraq uh for the Iran uh war. It's it's generally it's in the$15 billion area. Some people put it as high as$17 billion. And you know, when we were in at the Strom Family Farm Conference, uh I'm not saying the majority, but some farmers said, you know, boy, this is this is a lot of farmer aid. Will there be backlash against the ag industry? Yeah. And and and I told him, if you recall, Tommy, I said, you've got to think about your other brethren uh producers in the southeast and delta and in the northern states, North Dakota, the uh you know sugar beet states, they're not doing so well.
SPEAKER_01They don't have cotton people, things we don't think about. But one thing you pointed out to me before we started the Vaden interview was remember, Tommy, the USDA doesn't just govern corn, wheat, and beans. There's a whole other plethora of things. If if it went in your mouth, they're in charge of it, correct?
SPEAKER_00Absolutely, absolutely. And so this is why, although you hope it's not needed, when you look at the data, the the data, the the other markets has hadn't had the run-up, like say soybeans. We're over what? We're 1220, maybe? Yeah, we're over 12. I know that in soybeans and and corn, we theoretically could approach the five dollar mark. Cotton, although they've had a recent rally. I think we're near 65 cents, if I recall. They need about 90 90 cents or a little above in order to break even. So you can see they're still losing a lot of money. Rice needs a continued run-up. Sorghum needs continued sorghum or Milo needs continued business with China. Although they've had a price run up too, they need additional dollars. So that's kind of the perspective, even though I acknowledge even in Washington, there's what we call uh aid fatigue. Like is agriculture culture coming back and requesting more, knowing full well that if the market prices are not coming back this October, 13 around$13 billion, plus or minus, would come out via ARC or PLC Title I payments. But uh as I said, that still doesn't deal with the cotton, rice, sugar beet, sugar cane price dilemma. So I think that if they do implement this additional aid package, it'll be directed to be farmer friendly again, will be executed very quickly. Like the bridge aid assistance. We had more than a few farmers come up to us in Illinois and say, you know, once I had my my paper signed either online or I had to go into the office, within two days, my banking account showed that payment. And they revealed to us that over six billion dollars of the$11 billion in road crop funding has already been paid. And I bet I'll get it, I'll get a status update on that Monday, but I bet it's over eight billion dollars right now, Tommy. So help is coming, it's here, and an additional cash infusion infusion may be coming out with that$15 billion congressional coming initiative. And in June or June sometime, the uh special disaster relief program stage one farmers who got any of those payments, they're gonna be get a pretty good big top-up payment. So we're gonna have continued cash flow here in the months ahead, Tommy.
Fed Rate Path And Powell Signals
SPEAKER_01That that's really good news. Speaking of cash flow or just markets in general, I believe tomorrow's the last day to lock in crop insurance. Normally it's the 15th. Yes. Kind of when the Monday, you know, like you're supposed to owe your tax on the 15th, but they give you one other day. So we're wrapping up crop insurance. And folks, as you know, that is the number one bulletproof fest for uh folks in row crop. And then we, you know, we do what we do in markets forward, sales, puts, calls, all that stuff. But it's starting to come together. And I could I could almost tell people how you're gonna end this show, but we have four or five more headlines. But uh, I know how you're gonna end it if I had a better dollar, but I'd already win. All right, the last thing we talked about was new farmer aid package, FOMC announcements, projections, and press conference on Wednesday.
SPEAKER_00Yeah, we and I said on AgraTalk, and I'll say here never do I usually say a hundred percent guess on anything from Washington, but on this one I will. We will not have a cut. They're gonna hold, the Federal Reserve will hold because of the volatility in policy. Inflation is still sticky. They they're concerned about energy prices, whether how long this will go, and affordability issues and things like that. So I think that they're gonna punt. In fact, the growing consensus is that we may only have one cut in interest rates this year, and that'll probably be in October. At least that's what the futures markets are saying, Tommy. And it could be none, so one or none. But we all know that the Fed is data dependent. Now, we're gonna see their projections on Wednesday, too, to see what their usually wrong Fed economists are gonna project for the months ahead. There, they haven't been that accurate over the years, but most important, uh, the the current Fed chairman Jerome J. Powell is gonna have a press conference. And what he says, how he says it, is gonna be important for the psychology of the bond markets, and oh real interest rates, etc. So that's what we're gonna pay the most attention to is his commentary as far as if he gives any signals for future FOMC meetings ahead.
SPEAKER_01Yeah, Jim, can you add any color to he's supposed to give a testimony? And I was listening to Fox News on the way here. He's supposed to give uh before they vote to have the new gentleman at the Fed. Now I'm drawing a blank. I should know better who uh who they were.
SPEAKER_00Kevin Marsh.
SPEAKER_01Can you add any color there? What what's going on with Jay Powell versus Marsh? And it's I feel like it's kind of a political bargaining point. Yeah, we'll give you this, you get that, leave Paul alone, right?
SPEAKER_00Well, yeah, and I think eventually, probably this is just conjecture on my part, the Justice Department is uh probably going to withdraw that uh case against uh Paul because the Supreme Court has already issued a ruling that's been that's been favorable toward Powell. And I think that the the the crystal ball is clear now. He he's going to uh come out as a victor on that for the independence, basically, of the Federal Reserve. That's what the Supreme Court is signaling, as well as should. They should be independent.
Conference Takeaways GLP One And Hogs
SPEAKER_01Yeah, strange times in so many ways. All right, you were in Nashville. Sorry I missed you, but I heard you met all my good associates here at Nasvik.
SPEAKER_00And yeah, it was it was fun meeting all them, talk about quality people who knew my gosh, it was back to my old Sparks commodities days, where I used to go in conference calls with Willard Sparks, and you had to know what was going on in the marketplace. That's what was happening at the bar there. That that the expertise of the people there. But I also found out, Tommy, was since I'm on GLP one now, this is my third week, and now I'm an expert, of course. Oh, yeah. GLP one.
SPEAKER_01It took you three weeks with the help of you, for God's sake.
SPEAKER_00But I found I can't even drink beer as much as I used to. Now I think that's a good thing, most people tell me. But as we saw in, and you saw it in Peoria, I could only eat half of my prime rib steak. What a shame. That's never happened to me in my life. What a shame. I had you look at that. Oh my goodness, I still love steak. But I have gone to the drier, smaller cuts filet mignon, and I and I can eat that. So that that's interesting because I told Greg Dowd this uh during the Stone X conference when he talked about it. I raised my hand and pointed out. I said, I know it's gonna be a plus for protein, but I said, you know, I don't know about the quantity because I've already cut back, and millions of more people are on that drug, whether it's the pill which I'm on or the shot for for many others, but it changes your type of meat initially. But I learned other things at Stonex conferences. The one thing that really I picked up on was the growing incidence of PERS in hogs. And I think we're gonna from from what I could tell the traders that I talked with, they're pretty bullish on hogs during the summer months. Regretfully, I say this is gonna increase in incidence. It's primarily started in the uh North Carolina in my home state of Virginia, but it it is spreading as far as a uh factor in the marketplace. The traders said it'll probably take USDA until next April in order to reflect the downturn in numbers, Tommy, as a result of diseases, uh PERS, and other things. So that's one for the future to check on whether or not my ear heard and whether it's actualized in in developments in the marketplace in the months ahead.
SPEAKER_01Excellent. All right, let's uh go back a little bit and talk about this feedback on our interview with USDA, Deputy Secretary Stephen Faden.
SPEAKER_00Yeah, just the one thing I wanted to point out is look, he didn't have any notes. Look how articulate and passionate he was on almost every subject we threw at him. And he really focused initially on the fertilizer thing, if you recall, saying that this Australian-based company, BHP, who's in Canada, uh is committing$15 billion in increasing fertilizer production that, yeah, won't help this year, but next year he said it it'll come about. And he mentioned a number of other uh companies that he couldn't he couldn't detail uh because it's privy right now. But just when you go through that interview, just how articulate and concise. You can tell he's a lawyer, he's pretty concise and to the point, but he was more market-oriented than I than I usually see a USDA official being when he said he's most concerned about what he called the white crops, okay? Uh sugar, cotton, and can't think of rice, rice. And uh he said he just doesn't want other US commodities to go the way they have, and that's why he was passionate when he said what we've been saying for months now, we have to kick the domestic utilization into gear, and that's through year-round E-15. That's through a farmer-friendly, corn and soybean-friendly, sorghum-friendly, sustainable aviation fuel program. And it's also balanced with more proof that these new trade agreements are gonna be positive for agriculture. He wrapped up all that together, talked about uh USDA reorganization, which is a sensitive topic, saying it's gonna put the people more back to the heartland where they belong. He took on certain fertilizer companies by by saying at least one he thought was holding back on production, and that's why he likes these other country uh companies coming back into the marketplace. He didn't hold back, and usually a USD official will be more reserved. And I don't know how many people came up to me at the Stone X conference and said they listened to it and they they thought he was so refreshed refreshing to have actual comments and answers and perspective, and even on the sensitive issue of USDA numbers, increasingly number of farmers are saying they no longer believe in USDA numbers. I think that's a shame. I think we need USDA numbers, we just need to get them better. And Vaden said on April the 22nd, if I recall, in Kansas City at the uh Data Users Conference, they're going to have a report looking back on this past year's numbers, reasons why maybe they were unusual, maybe steps they're taking for the future. And he also implored farmers and other ag sector stakeholders to write in to USDA. You go in USDA.gov and comment on their suggestion. Just don't complain about USDA numbers. Tell them and help them some areas that they think they need improved on. Now, a number of farmers have told me they're getting these USDA surveys in the mail and only have two days to fill it out in order to send it back. We asked Mr. Vaden that, and he said they're gonna eventually move to digital entry. In other words, a farmer can can enter the survey information on his computer. Then you don't have to worry about snail mail. And that could be part of the downturn in the rate of uh rate of how many farmers have filled out those surveys, Tommy. I think the last major survey was 42% participation rate. That may sound low, but that's one of the higher levels of of uh government surveys now. And so it used to be uh over 50%. So you need to get the only as good as the information that you get in. He was passionate on that, and so am I. I think I don't like to see statements by some that they've lost faith in USDA numbers. These are these are needed in the marketplace to trade on, to serve as a barometer. Yes, private industry has a role. Sometimes they're better, sometimes they're not, but I think you need a con uh a placeholder, and that's USDA.
SPEAKER_01I also had a friend of mine comment and say, I was just looking up his name. Remember, we're talking about sugar in North Dakota and stuff? Yeah, the president of Crystal Sugar texted one of the board members and said, Did you hear your buddy Grissafi's podcast with Mr. Weesee Meyer? So people heard it. I mean, that it doesn't get any higher. And he he talked about sugar and he even hinted about Mexico. Remember that?
SPEAKER_00That Mexico, and that's probably what he was talking about. When they yeah, well, usually USD officials, again, are very careful about talking about sugar policy because number one, it's complex, and number two, you usually get in trouble. But three, he indicated relative to what we call two-tier above above the quota. He said Mexico has already increased their tier two tariff rate, tariff rate, I should say, and and so should we. And that's probably what the sugar people noted in our interview. They heard it, and it should be, it should be because there's been an end-a-round domestic U.S. sugar, and that's not a good thing to our very good U.S. sugar beet and sugarcane producers. And I applaud Vaden for even commenting on that and sticking his neck out and saying, yes, it should be increased. And he mentioned Mexico has already done the case. And I at the Stone X conference, I talked with uh somebody from Mexico trade policy, and she said uh absolutely they have increased rather significantly their their version of tier two tariff rate.
SPEAKER_01I want to add something before we go. I want you all to know who are watching and listening that we hit play on that interview, and I told the Secretary Vaden before, I don't edit my podcast. Now I could if I had to, right? So if he said something or we said something and we're like, ah, that just wasn't kosher, you know, we got to pull that. But that's not my gig, that's not what we do here, and uh there's no one talking in, there's no producer talking in Gemini's ear telling us what we can't and can't ask him. But a couple facts over that 90-minute interview, I can only remember one time for sure. He said, I can't talk about that. And then it might have been when you were hitting them with the follow-up questions, yeah.
SPEAKER_00And then two one or two on SAF, sustainable aviation fuel. He said USDA continues to talk with the energy department as far as the next important step uh on how can we analyze to see what type of carbon credits corn and soybeans are going to get relative to 45 Z program.
SPEAKER_01Right. And there's a couple things he said, you know, he he almost stopped himself a few times. That means, folks, he knows the answers, but it's he's not at liberty yet to say it to the public because they're still, you know, as they say, you know, that's how the sausage is made, right? But that was a 90-minute interview, not edited. I swear on my kids' life. I'm I got the cross right here. Jim grew up Catholic, I grew up Catholic. It's late right now. I wouldn't fib to you. No edits, folks. So go back, listen to that episode, and uh again, I commend him for his uh honesty and and uh integrity. But one thing when the screen stopped rolling and we got to talk to him, I'd asked him about his confidence. And I said, How much you know you're a judge, as high of a level of a judge as you could be, and you're so confident. And he had an interesting answer for how he looks at things. So I think when he goes out in the public and someone comes after him, he doesn't take it personal like they're coming after him. I think he likes to gather the facts from both sides, add color to that, how we compared. Are you so confident because of being a judge? And he he had a way on how he processes information. You want to talk about that, Jim?
SPEAKER_00Well, yeah, he just facts and figures, and don't and and he he concludes he he brought that up relative to the Moroccan duties, in which he said now they're under their five-year review. We did ask him for a timeline, and he said, Well, that's in the legislation, it's pretty uh transcript on it, and it's either late this summer or early this fall. And then he went through when he was a judge, he said he he offered a number of uh of uh uh cases where he didn't think those duties should have been put on. And he said, now that uh at least nutrient has back has backtracked and said they're no longer needed, now he wants Mosaic to come out and say, okay, let's let's get rid of those high Moroccan tariffs. And and that'll that'll bring in a chuck of fertilizer because of the of the albatross of those uh duties. And again, this is what he said, but he analyzes it from a impact analysis of who's it hurting, you know, and but he said when this is his, this is not me saying this, he said when Mosaic has not increased production, that tells me that it's it's negatively impacting US producers, and though they should no longer be on. Now, Mosaic may have some um some uh pertinent reasons why they didn't increase production to the degree that this price run up has indicated, but nonetheless, he come he came right out and said we need more fertilizer supply, and this is one way to get it. The BHP plant uh Australia in Canada is another way. Additional U.S. participants in the fertilizer industry is another way. That'll solve the problem, Tommy. Uh that solves the problem every time with price.
SPEAKER_01Let's produce markets work, right?
SPEAKER_00Production and supply. Absolutely.
Speed Round JBS RFK USMCA Brazil
SPEAKER_01All right, let's get to the speed round. We have four left, and we've been going a little long. Let's see how we can get through these next four, then you'll finish her up. JBS strike on Monday.
SPEAKER_00That's just uh it looks like it will. At least that's what the market price you know prices are saying. JBS has already been moving some of their beef to their other plants, uh, Grand Island, Nebraska, Cactus, Texas, uh, Hiram, Utah. The market impacts, uh longer cattle transport distances, regional bid shifts uh that will you'll be seen in the cattle markets. It's usually boxed beef cutout prices rise. So packers start making some money. Livestock cattle futures uh usually go down. The early start uh time and date is uh Monday, 5 30 a.m. Mountain time, 7 30 a.m. Eastern Time. And you recall Greeley. Is one of the most important plants in the U.S. cattle system. And again, it'll it'll affect the uh box beef cutout prices. So stay tuned for Monday. I don't think it's gonna last that long. At least that's what the traders are telling me. So we're gonna have to monitor that one, Tommy.
SPEAKER_01Next one. Is White House tempering RFK Jr.?
SPEAKER_00Yeah, they are big time. I think they're getting nervous relative to the mid-year elections, especially relative to the vaccines and some of the comments. So, and you'll recall he was surprised, he meaning JFK RFK Jr. was surprised on the glyph glyphosate announcement earlier earlier this month, but that's another area in which they've they've reined him in. And a lot of agriculture people would say that's a good thing. So I think it'll continue through the election. That doesn't mean Trump has lost faith in in RFK Jr. In fact, he has not. In fact, he may get aggressive again after the midterm elections, but right now he's been tempered. Next one, Tommy. Yes, sir again.
SPEAKER_01Yes, sir. All right, this is interesting. Brazil soybeans to China hits roadblock.
SPEAKER_00Yeah, handle that real briefly. This is China's up to their old tricks. You'll recall they've done it to the U.S. When they want to stop or temper imports coming from a current certain country, they raise some non uh final sanitary issues. And in this case, they said uh the quality of uh you know Brazilian uh beans. That means it's an opportunity for U.S. beans. And isn't it interesting? This is coming around the time of the Trump G summit, in which we may have a Chinese commitment to purchase more U.S. soybeans. But for right now, Cargill in Brazil doesn't want to pay those demurries charges, and I don't blame them. So your basis is definitely wide widened in Brazilian soybeans. So short term, they've lost a chunk of a big market. Next one, Tommy.
SPEAKER_01U.S. MCA talks, Jim.
SPEAKER_00We'll end it there. The U.S. is beginning to talk with officially with Mexico under the review of the USMCA. Officially, it begins in July, but they're having these pre-meetings. No announcement has been made under U.S. Canada agreement, but it'll eventually happen. Let's cut to the chase. Both Mexico and Canada are a little concerned that the U.S. wants to make major changes to the USMCA, but I think short-term Tommy, this is just leverage. Of course, the White House wants some changes relative to the end of rounds China is taking in Mexico in getting some of their cars in. The domestic content of cars will be looked at again. We're going to challenge some of uh Canada's uh dairy policy eventually. But I think when the fat lady sings on this, the USMCA will be extended at least a year. I think hopefully it'll be extended another 16 years. But bottom line, we're gonna go through a lot of hoops, but just keep your eye on the ball later rather than sooner on the serious talks.
Market Optimism And Selling Discipline
SPEAKER_01All right, you take 10 seconds in Washington, DC. I knew he was thirsty. I could hear him winding up where the show, the end, and I know what he's gonna talk about because he's gonna leave us so optimistic from where we were six months ago to where we are now. Take us home.
SPEAKER_00Well, we've already uh uh checked off some of the boxes we've been saying over the last few months of saying, watch it, watch the uh export market for corn. It's been blockbuster. Wheat has carried the day more often than not. And when that's the case, that ought to wake you up. There's something's going on here to domestic utilization relative to the uh corn-based ethanol market, relative to uh the coming RFS announcements, which, as Faden told us, will be very friendly for the corn market. We've got some problems or perceived problems, maybe in portions of the uh of the U.S. wheat belt, and that's continued to rally the wheat market. We've we just had some pretty good overall export market figures, and I think that's a good thing. And we're just first going into the planning season, where it's the two season as we call it. Too little rain, too much rain, too little sun, too much sun. And so farmers are gonna have the opportunity to sell additional quantities of grain they probably should have sold before, but you're gonna get another chance. Ring the cash bell. You can never go bankrupt making money, right, Tommy? I'm gonna end it on that note.
SPEAKER_01All right, sounds good, Jim. I'll catch you next week. I can't imagine where the markets will be when we continue this show. See you then, my friend.
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