trade war | Field 2 Field

January 4, 2020January 4, 2020

Grain Markets put 2019 in the rearview mirror

Here’s the full conversation with Joe Vaclavik of Standard Grain in Chicago. You can download it on your computer by clicking on the three dots on the right side of the player. Play it here on your mobile device.

Grain Markets officially bid 2019 a not-so-fond adieu. Like most other segments of American agriculture, grain farmers are more than happy to put 2019 in the past. Joe Vaclavik, founder and president of Standard Grains in Chicago, says last year didn’t start off well in the grain markets and it just kept going for the next 12 months.

“We had a pretty comfortable, if not burdensome supply situation entering the calendar year, so, the calendar year kind of began similar to what we’ve seen the last two, three, four years, a comfortable supply-demand situation, not anything terribly tight. Low prices, farmers not making a ton of money, you got the trade war going on, a lot of overall negative factors I would say to start the year.”

He says the spring is when things began to get “interesting.”

“Both in the markets and the weather. We basically sold the markets off until about that May time frame, that I think traders started to realize that we had some serious weather problems. Wet weather, cold weather, planting delays continued, and typically we are always told the crop’s always going to be planted, and planting delays are not a cause for concern.”

However, as the spring continued, things turned more serious in the markets.

“Planting delays turned into a major concern. There was a point in time in late May into maybe the mid part of June where we just had no clue what type of production was possible, and out of that, we had a very significant crop scare rally in the corn market and in the soybean market, to a lesser extent.”

Farmers continued to plant corn long past what would be a normal planting date. Vaclavik says the market was rallying as farmers continued to plant, even into early July in a few locations. He says the market peaked in June because it bought a “whole bunch of corn acres” that wouldn’t have been there otherwise.

Vaclavik says farmers faced challenges from a weather standpoint, logistics, and from a demand standpoint with trade challenges in 2019. With all that stacked against them, the question is how much grain U.S. farmers produced last year. Vaclavik says the answer depends on who you ask.

“A lot of people think that the numbers USDA has put out are just not achievable given the late planting, the wet spring, the late harvest, so there’s still some debate out there. I’m not one to tell you with any degree of certainty that we know for sure what the crop is, and we’ve got this big report on January 10, which is the final crop production report, and I suppose if USDA is going to make any sort of sweeping adjustment, it probably comes on that date.”

Again, Joe Vaclavik is the president of Standard Grains in Chicago.

August 8, 2019August 8, 2019

Markets Expert Talks Trade War, USDA reports

Markets occasionally confuse me. However, one part of a career in journalism/broadcasting that I really enjoy is calling people who can educate me on things I really don’t have much expertise in. The older I get, the more fun it is to learn (and try) new things, but I digress. I was working on an assignment with the National Association of Farm Broadcasting the other day and had to find out how the trade dispute between the U.S. and China is affecting commodity markets.

Well, here’s the thing. Commodity markets are not my area of expertise, so I called up Mike Zuzolo of Global Commodity Analytics and Consulting in Atchison, Kansas. He’s been in the markets for 2.5 decades so if you have a question, he’s the guy that can answer it.

As a farm broadcaster/editor, I was curious about how the China announcement that they wouldn’t be buying any American farm products right now was affecting the markets. Obviously, the effect wouldn’t be a positive one. However, as you’ll hear in the conversation, it could have been even worse.

And believe me, before we progress any further I need to stress that no one is saying things aren’t bad right now in the agricultural sector. I wanted to find out what the market reaction was to the announcement from China. Mike said the key reaction market reaction took place in the currency and stock markets.

“Quite frankly, Chad, I think this is maybe one of the few glimmers of good news, or potentially supportive news, for the commodity markets,” he said. “I think we’ve done a fairly good job in the markets of pricing in a good portion of the end result of these trade frictions turning into the beginnings of a trade war. It’s going to be playing out in the currency markets as we go forward.

“The net result is the commodity markets didn’t react as negatively as they could, simply because the strength of the U.S. dollar was dropping,” Zuzolo said. “When the dollar goes down, it makes our goods cheaper to export. At the same time when we had the news out of China, the gold market was making fresh, 6.5-year highs. That too is commodity supportive.”

Here’s the full conversation with Mike Zuzolo.

April 3, 2019April 3, 2019

TransFARMation Radio to help farmers cope with stress

Many different sources of stress are currently impacting farmers and ranchers. In response to the growing pressure on agriculture, the Minnesota Department of Agriculture (MDA) and the Red River Farm Network (RRFN) have joined forces to create a new radio series called TransFARMation.

“Farming is a stressful business during the best of times,” says Don Wick, president, RRFN. “Agriculture’s financial health is being influenced by tight margins, the trade war, production issues, and more. These are all factors where farmers and ranchers have little or no control.”

The series uses farm radio, podcasts, and social media to increase awareness and reduce inhibitions about acknowledging farmer stress. It will also highlight sources of support.

“Many people are struggling and they need to know they’re not alone,” said Agriculture Commissioner Thom Petersen. “This is a powerful series – we hear from farmers, ranchers, and others in agriculture talk about some of the strategies and solutions that helped them when things got tough.”

The 60 second prime-time radio stories can be heard on all of RRFN’s 20 stations throughout Minnesota, North Dakota, and South Dakota, starting the week of April 8. In addition, the in-depth podcasts can be found at www.rrfn.com/transfarmatio n.

TransFARMation is supported by a grant from the Center for Disease Control’s (CDC) National Institute for Safety and Health (NIOSH), the Great Plains Center for Agricultural Health, and by AgCountry Farm Credit Services, Minnesota Corn Growers Association, Minnesota Soybean Growers Association, Minnesota Soybean Research and Promotion Council, North Dakota Corn Growers Association, North Dakota Farmers Union, North Dakota Soybean Council, North Dakota Wheat Commission, and Prairie St. John’s.

Broadcasts are solely the responsibility of the creators and do not necessarily represent the official views of the CDC, NIOSH, or the Great Plains Center for Agricultural Health.

If you or someone you know is struggling with stress, anxiety, depression, or other problems, the free and confidential Minnesota Farm & Rural Helpline is available 24 hours, seven days a week at 833-600-2670.