Latest / AG Bull / Wiesemeyer's Perspectives | Bridge Money, Big Questions; Farm Country’s Reality Check

Transcript

Wiesemeyer's Perspectives | Bridge Money, Big Questions; Farm Country’s Reality Check · AG Bull

0:20
SPEAKER_01: How are we doing, everyone?
0:20
SPEAKER_01: Tommy Grassafi, Agbull Media, Agbol Trading the AgBull Podcast.
0:24
SPEAKER_01: It's Saturday.
0:26
SPEAKER_01: Mr.
0:26
SPEAKER_01: Jim Wiesmeyer and I were traveling like madmen, working, giving speeches, etc.
0:30
SPEAKER_01: It's Christmas time.
0:31
SPEAKER_01: So we're going to get this one out to you, which gave us more time to prepare.
0:36
SPEAKER_01: And he says, allegedly, we have breaking news.
0:40
SPEAKER_01: We'll introduce him and then we'll get in the show.
0:42
SPEAKER_01: I want to hear what this breaking news is.
0:44
SPEAKER_01: And of course, I thank you for watching.
0:46
SPEAKER_01: Merry Christmas.
0:47
SPEAKER_01: Drop a comment down below.
0:50
SPEAKER_01: Let's get into it.
1:25
SPEAKER_01: The crowd goes wild.
1:26
SPEAKER_01: Mr.
1:27
SPEAKER_01: Weeksmeyer, you've been out speaking.
1:28
SPEAKER_01: Do tell about your travels.
1:30
SPEAKER_02: I'm telling you, I began it, you know, the warmest place I went to this past week, this is perspective, was in Kansas.
1:38
SPEAKER_02: Much warmer than normal, but I began the trip in New Orleans at the rice growers meeting, very well attended.
1:45
SPEAKER_02: Trade show, rice grower meeting, lots of friends in rice country.
1:49
SPEAKER_02: And then I went to uh Kansas.
1:52
SPEAKER_02: It's hard to get from New Orleans to Newton, Kansas, by the way, north of Wichita, but all the great people over the years.
2:00
SPEAKER_02: I've done the meeting 13, 14 years, uh wheat and cattle meeting, and it was warm there.
2:05
SPEAKER_02: And Kansas don't really believe they're in Kansas anymore because they've got more than usual precipitation over the past few months.
2:13
SPEAKER_02: That's what I learned there, amongst other things that we'll talk about.
2:17
SPEAKER_02: And then I came back home and went downtown the next day to DC to talk to the peanut grower.
2:24
SPEAKER_02: So that I had the gambit as far as different uh groups, Tommy.
2:29
SPEAKER_01: Yeah, I like it.
2:30
SPEAKER_01: And you know what's so great about you, Jim?
2:32
SPEAKER_01: Not that many people can find many things, but I'm gonna tell you one thing that's great about you.
2:37
SPEAKER_01: Everyone in this industry talks about corn and beans, corn and beans, corn and beans, and you are like, I mean, you're talking about peanuts.
2:44
SPEAKER_01: I've never had a friend who spoke for the peanut growers.
2:47
SPEAKER_02: Well, you want the best protein in a little pack each, hold up a peanut, you know.
2:51
SPEAKER_02: You don't have to eat many of them for protein.
2:54
SPEAKER_02: And I told them, I said, you know, I went to that, you know, the the Future of Food conference, and uh they even said, as more and more people, I haven't taken them, and you can see I haven't taken those uh shots to make you thinner, you know.
3:07
SPEAKER_02: I'm waiting for the pill, but you need more protein when you take those shots, and a little more peanuts won't help.
3:15
SPEAKER_02: So they had a whole section on marketing and peanuts and things like that, and it was a different type of a meeting for me, although their prices are down in peanuts, just like everything else, except cattle.
3:27
SPEAKER_02: They were an innovative uh group thinking ahead how to market their their their products in in different ways.
3:34
SPEAKER_02: So that was different.
3:36
SPEAKER_02: In the rice grower meeting, we'll talk about this White House meeting that they announced that farmer aid package.
3:43
SPEAKER_02: But you know, the star to me at that meeting, Tommy, was a rice miller.
3:49
SPEAKER_02: I think uh uh uh Meryl uh uh uh Kennedy from Monroe, Louisiana.
3:56
SPEAKER_02: She sat right next to President Trump and she articulated one of the biggest issues in rice country, the the low prices, the dump prices that India uh has for rice and how that's impacting the whole world rice market negatively, uh Thailand, China's uh rice policies, etc.
4:17
SPEAKER_02: And she was so articulate and succinct that Trump turned to his Treasury Secretary, Scott Besson, and said, Scott, get on this.
4:25
SPEAKER_02: So he wrote, you could see him write down notes.
4:28
SPEAKER_02: So that that's an effective presentation in front of the president of the United States.
4:32
SPEAKER_02: So I applaud her.
4:33
SPEAKER_01: So where it was the president, this young lady, then Rollins, right?
4:37
SPEAKER_02: She sat right next to between the president and and Rollins.
4:41
SPEAKER_01: I was wondering who the heck that was.
4:42
SPEAKER_01: Yeah, all right, yes.
4:44
SPEAKER_01: Let's get after it, my friend.
4:45
SPEAKER_01: Farm aid.
4:46
SPEAKER_02: Okay, that's the big that's the big topic of of the day.
4:51
SPEAKER_02: And the biggest word in agriculture is bridge.
4:54
SPEAKER_02: Okay, this is a bridge loan.
4:56
SPEAKER_02: We have now have a name for it.
4:58
SPEAKER_02: It's the FBA program, farmer bridge assistance program, FBA.
5:03
SPEAKER_02: It's funded at$11 billion for row crops, and$1 billion is being held back, Tommy, for specialty crops, fruits, etc.
5:13
SPEAKER_02: Also, sugar is included in there, and that's part of the problem to me.
5:17
SPEAKER_02: Uh, number one, even though$11 billion is a lot of money, I'm not going to discount that.
5:21
SPEAKER_02: I don't think it comes woefully short of what is really needed in farm country.
5:26
SPEAKER_02: And the$1 billion uh held back for specialty crops, even the specialty crops uh uh producers and lawmakers uh from those states are saying this won't do.
5:37
SPEAKER_02: We so they're already have have legislation to increase that number.
5:41
SPEAKER_02: I think eventually USDA will increase that number, especially since it's it includes sugar.
5:47
SPEAKER_02: And I know internal USDA analysis shows there's$500 million in losses just for the sugar, yeah, sugar growers, Tommy.
5:57
SPEAKER_00: Wow.
5:58
SPEAKER_02: And I uh I've done a number of interviews where sugar beet growers are losing, many are losing three to four hundred dollars an acre, where some first-time sugar beet growers are losing seven to eight hundred dollars an acre.
6:13
SPEAKER_02: You heard me correct.
6:15
SPEAKER_02: That's a lot of pain.
6:16
SPEAKER_02: And for them to be grouped with just one billion dollars for for specialty crops, uh you know, you know, this thing has to change.
6:23
SPEAKER_02: Now, the source of funding for this$12 billion total farmer aid package is interesting.
6:30
SPEAKER_02: President Trump during no, I would go back, Tommy.
6:33
SPEAKER_01: Go back when yes, sir, Mr.
6:35
SPEAKER_01: Wiesmeyer.
6:36
SPEAKER_02: President Trump, when he had the round table uh Tuesday, I think it was, uh, said that the money was coming from his beautiful tariffs.
6:45
SPEAKER_02: Well, they're not, you know, uh, he just just not right.
6:48
SPEAKER_02: Uh he likes to say a lot of times that the funding's coming from the tariffs, but it's not.
6:53
SPEAKER_02: Secretary of Agriculture Brooke Rollins said after after the session, she clarified it and and and uh correctly and said it's coming from the commodity credit corporation.
7:05
SPEAKER_02: Remember, right before the government shut down for 43 days, USDA moved uh$13 billion into this pool from the commodity credit corporation.
7:17
SPEAKER_02: And so I want to make sure people know that that's I don't know why Trump keeps saying that.
7:23
SPEAKER_02: I ask a White House person and they know why.
7:26
SPEAKER_02: I know why he just wants to justify his his trade policy, right?
7:32
SPEAKER_01: Well, when when he loses the Supreme Court thing, he's gonna say that's horrible.
7:36
SPEAKER_01: Now we can't pay our farmers, now we can't put the thousand dollars in every little kid's checking account.
7:42
SPEAKER_01: Now we can't do this, and he's gonna he they are already preparing for that.
7:48
SPEAKER_01: They are, they are that's Milo concerned.
7:50
SPEAKER_02: They are theory, they are, they are.
7:52
SPEAKER_02: But I did ask a White House person, they said, Why don't you correct him to tell him not to say those things?
7:58
SPEAKER_02: And and they said he it's just rhetorical to him.
8:01
SPEAKER_02: That's that's the answer I got.
8:03
SPEAKER_02: Well, okay, all right.
8:04
SPEAKER_01: Yeah, can I can I tell you something?
8:06
SPEAKER_01: I was thinking about someone the other day.
8:09
SPEAKER_01: Remember that young lady, she was just beautiful, Hopics.
8:12
SPEAKER_01: Remember, Hopix went on the CN and said, Sometimes we tell the president little white lies.
8:18
SPEAKER_01: And I was thinking, I Googled, where is Hopix now?
8:21
SPEAKER_01: Do you know what Hope's is doing?
8:22
SPEAKER_01: Where?
8:23
SPEAKER_01: Same thing I'm doing.
8:24
SPEAKER_01: She's the head of Megan Kelly Media, she's clicking the buttons for Megan Kelly, she's the CEO of all Megan Kelly's uh media companies.
8:32
SPEAKER_01: I found that.
8:33
SPEAKER_02: Well, she's she's good, she's a good uh a good spokesperson, and she's very uh efficient, and that's basis uh President Trump over over the years talking about little white lies.
8:45
SPEAKER_01: Hopefully, yeah.
8:45
SPEAKER_02: Well, in the Catholic Church, in the Catholic Church we call them venial sins, right?
8:50
SPEAKER_02: And now on the the timeline for the farmer aid package, December the 19th.
8:55
SPEAKER_02: You know, you know, farmers have their acreage in, but they gave them a deadline of December the 19th at five o'clock my time, Eastern time, Mecca time, for producers to make sure their 2025 acreage reporting is accurate.
9:09
SPEAKER_02: For those growers in Kansas, in Newton, Kansas, I had a couple growers ask me if that acreage includes uh uh prevent plant.
9:18
SPEAKER_02: It does not.
9:19
SPEAKER_02: It does not.
9:20
SPEAKER_02: Failed acreage is does because it's planted and considered planted.
9:24
SPEAKER_02: Okay.
9:25
SPEAKER_02: Now, the week of December the 22nd, USDA is expected to release the commodity-specific payment rates.
9:33
SPEAKER_02: And I think they have a good good knowledge now of what they're going to announce, and they'll be paid, the money will be paid no later than February the 28th.
9:44
SPEAKER_02: Now we have some conjecture of some of the payment rates.
9:48
SPEAKER_02: I think we've got that table, and and I'll uh put out orally for the just the listeners.
9:54
SPEAKER_02: These are from Paul Nefer, the farm CPA report, a very good friend of mine, a tax expert, just a good guy.
10:01
SPEAKER_02: So if these are wrong, blame Paul.
10:06
SPEAKER_02: But Paul Paul's uh gave a good shot estimate.
10:09
SPEAKER_02: Now for corn, he's got the payment rate of uh uh$48.35.
10:16
SPEAKER_02: Now, if there's a 90% level, because they may not pay out the full amount, you know, that's how they do.
10:21
SPEAKER_02: They want to make sure that they don't oversubscribe this program.
10:26
SPEAKER_02: Uh 90% level would be$43.52 for soybeans was lower than people thought.
10:33
SPEAKER_02: The initial payment rate he's got at$31.77.
10:38
SPEAKER_02: Uh, 90% level is$28.59.
10:42
SPEAKER_02: Uh, I think with the recent downturn in soybean prices, USDA may have to rethink that uh you know payment uh level.
10:50
SPEAKER_02: And I think you had a we'll have a chart later on on the soybean prices.
10:54
SPEAKER_02: Yes, that's there it is.
10:55
SPEAKER_02: Look at they they had that run-up.
10:57
SPEAKER_02: Hopefully, farmers sold some some some crop during that uh what 150 or so run-up in the price, and now we're back.
11:05
SPEAKER_02: Uh boy, that's a head and shoulder stop, isn't it?
11:08
SPEAKER_01: Wow, yeah, a little bit.
11:08
SPEAKER_01: We're hitting the 100-day moving average, and we purely see look and that that emphasizes.
11:13
SPEAKER_02: Oh, wow, that's an ugly chart.
11:15
SPEAKER_02: That's an ugly chart, yeah.
11:16
SPEAKER_02: And then some some other yeah, some uh wheat, uh$37.38.
11:22
SPEAKER_02: Uh, you put the 90% factor, 33.64.
11:27
SPEAKER_02: Cotton, look at this one, 99.15.
11:32
SPEAKER_02: That you heard that correct.
11:34
SPEAKER_02: 99.15.
11:36
SPEAKER_02: 90 factor is 89.24.
11:40
SPEAKER_02: That shows you the downturn in cotton prices, Tommy, right there.
11:44
SPEAKER_02: Rice, look at look at rice, 107.98.
11:50
SPEAKER_02: Yes, you heard that right.
11:52
SPEAKER_02: 90 level of 97.18.
11:56
SPEAKER_02: Now, less acres for both cotton and rice, relative to, of course, the biggies, corn, and soybeans.
12:02
SPEAKER_02: Sorghum,$50.19, 90% level,$45.17.
12:09
SPEAKER_02: And we've talked about sorghum Milo over the last few months of how the tepid uh Chinese interest in U.S.
12:16
SPEAKER_02: sorghum has resulted in a much lower uh price.
12:20
SPEAKER_02: And Peanut, since I was there, they get they may get$87.76, uh flat payment rate, 90% level of$78.98.
12:32
SPEAKER_02: Now, those are not too bad, Tommy.
12:36
SPEAKER_02: But the American Soybean Association president came out and said on CNN that this is a band-aid on an open wound.
12:46
SPEAKER_02: Boy, that I don't think that went down well at the White House, to tell you the truth.
12:51
SPEAKER_02: But he said that I probably could have said it more diplomatically.
12:56
SPEAKER_02: Jim, who said that again?
12:57
SPEAKER_02: Wrangling.
12:58
SPEAKER_02: Uh I can't think of the full name, but uh that's the president of ASA.
13:03
SPEAKER_02: But he just said, and I think legitimately he said this only covers, and boy, I'm just thinking out loud here, about 26% of the losses.
13:12
SPEAKER_02: There's the crux right there, Tommy.
13:14
SPEAKER_02: And let me give you some internal background here.
13:17
SPEAKER_02: Some people at USDA wanted uh Trump and Rollins to announce a$20 billion program because they have identified the losses in just the major uh farm crops corn, soy, beans, wheat, cotton, and rice, at around$46 billion.
13:38
SPEAKER_02: So you can see$10 billion versus that.
13:41
SPEAKER_02: This better just be a down, uh, a down payment.
13:44
SPEAKER_02: And this is why uh there's already efforts in Congress.
13:49
SPEAKER_02: Uh GT Thompson, I think we've got his picture, Tommy.
13:54
SPEAKER_02: That yeah, he's already uh saying that they're working on a$10 billion additional farmer aid package because of the the need that's out there.
14:05
SPEAKER_02: Now, for full perspective on this uh uh you know uh economic loss payment program, number one, it's not limited to the trade-related losses.
14:16
SPEAKER_02: That that's important to point out that initially it was just going to be trade-related losses, and that's why probably Soybees thought they were gonna be the kingpin here, and they are they're not.
14:27
SPEAKER_02: But there are a number of producers.
14:29
SPEAKER_02: I they can't they have come up to me, not a lot, but but more than I would have thought, saying, you know, is this continued uh uh release of of uh aid program eventually going to come back to haunt haunt the U.S.
14:44
SPEAKER_02: ag sector by uh having us uh be seen by you know citizens outside the ag sector as always getting uh assistance.
14:54
SPEAKER_02: And uh I told him, I said, I hear you, but but food is security, and and I think there's bipartisan support for this uh aid package.
15:06
SPEAKER_02: Now you'll have a number of Democrats have already been negative.
15:10
SPEAKER_02: Angie Craig, the representative from Minnesota, house uh ranking member on the House A Committee, and she's running for the Senate, and she's already been negative relative to uh this uh program saying he's got it, Trump has to do something better with this trade program, etc.
15:29
SPEAKER_02: But the White House people tell me, well, for any Democrat who complains about this program, ask them what they will do.
15:36
SPEAKER_02: Ask them what they would do in a certain situation, and that's a fair counterpoint.
15:41
SPEAKER_02: Uh, would they want no aid, you know, for for the producers?
15:45
SPEAKER_02: But there is a substantial need, Tommy, out there.
15:48
SPEAKER_02: I uh you you you travel and and I've traveled enough.
15:53
SPEAKER_02: Yeah, we we wish we could get it from the marketplace, but your losses per acre, as we've shown in charts before, are almost across the board for for the for for for the slate of agriculture.
16:07
SPEAKER_01: And going back to the ASA, was that Caleb Caleb?
16:11
SPEAKER_01: Caleb?
16:12
SPEAKER_01: Caleb?
16:13
SPEAKER_01: Caleb, rack rackland.
16:14
SPEAKER_01: And now, yes, yeah.
16:16
SPEAKER_01: Now my friend is taking that job over.
16:18
SPEAKER_01: His name is Scott Metzger from Ohio.
16:20
SPEAKER_01: He will take over the presidency in 2020.
16:24
SPEAKER_01: So congratulations, yes, absolutely.
16:28
SPEAKER_01: So we did congressional aid.
16:30
SPEAKER_01: Let's talk about the new farm bill.
16:31
SPEAKER_02: Yeah, the well uh GT Thompson has indicated that they're gonna try again for what they call the skinny farm bill or farm bill 2.0 in January.
16:40
SPEAKER_02: Good luck.
16:41
SPEAKER_02: I don't think I think they maybe could get it out of the ag committee, but uh off the House floor, I'm just not I'm just not confident because there'll be uh 40 or so around Republicans who won't vote for the Farm Bill.
16:55
SPEAKER_02: They usually never do, and that means you need Democrats.
16:58
SPEAKER_02: Well, will they get enough Democrats to vote for Farm Bill 2.0?
17:02
SPEAKER_02: Not unless they claw back some of the food stamp uh funding cuts that the Republicans took out saying that it needed that the whole SNAP program needed reform.
17:12
SPEAKER_02: So I hope I'm wrong because there are some uh viable programs in in Farm Bill 2.0, but I think that they'll kick the bucket down the road again and have another another.
17:23
SPEAKER_02: I think it would be the fourth extension, the uh those uh features.
17:28
SPEAKER_02: But recall, Tommy, we had in the budget reconciliation bill the uh one big beautiful bill, the OB3 bill, as we call it now for clarity and tightness.
17:39
SPEAKER_02: That was your really farm bill right there.
17:41
SPEAKER_02: That's where we got that that's where we got the major increases in reference prices and positive uh changes in the crop insurance program.
17:51
SPEAKER_02: And uh thank goodness that uh we got that.
17:55
SPEAKER_02: The the other farms on the farm aid, a lot of farmers ask, how did they come up with this?
18:01
SPEAKER_02: And it's it's based on USDA cost of production models, the WASDI uh price support, so they'll probably use the December 2025 planted acres.
18:13
SPEAKER_02: Remember, you have to have them in for sure by December 19th at uh five o'clock.
18:18
SPEAKER_02: And they say a uniform formula modeling economic losses for the 2025 crop, and payments are limited to$11 billion.
18:28
SPEAKER_02: And uh, some people think even getting this payment out by February the 28th will be a tight fit, but I don't think this is as complicated a program as some people think.
18:40
SPEAKER_02: Once they they can spit out those payment rates, and they've done it before, if you recall, earlier this year, in December 21 last year, by law, Congress put in a 90-day, no later than 90 days, that they have to that they had to pay that that$10 billion, and they met it a little bit uh earlier.
18:59
SPEAKER_02: So uh USDA's uh farm service agency uh in many ways are unsung heroes out there.
19:06
SPEAKER_02: And I heard from a number of farmers in Newton, Kansas, that uh their county offices are down to one FSA person rather than the usual three because of the prior uh reduction in force in in government uh offices, and a number of FSA employees took that buyout opportunity.
19:29
SPEAKER_02: And that's why, even to this date, Tommy, some farmers are telling me they're still not getting the uh supplemental disaster relief program stage two payments yet.
19:41
SPEAKER_02: And when I get those emails, I flip them over to a key official within the farm service agencies, and he looks he looks into it and helps help helps them out.
19:52
SPEAKER_02: So if you're not getting those payments and you should have got them by late November, just email me and I'll do my best.
19:59
SPEAKER_02: I can't guarantee, but I'll do my best to funnel your frustration to the people who ought to know that.
20:05
SPEAKER_01: Good, good job.
20:06
SPEAKER_01: All right.
20:07
SPEAKER_01: Fed rate decision.
20:09
SPEAKER_01: Let's before we do that.
20:10
SPEAKER_02: Can we go to the late breaking news?
20:12
SPEAKER_01: Oh, yeah.
20:13
SPEAKER_01: Let's go.
20:14
SPEAKER_02: We should have been yeah, yeah, we need some late breaking news.
20:16
SPEAKER_02: Here it comes.
20:22
SPEAKER_02: We one was a good one.
20:24
SPEAKER_02: The U.S.
20:25
SPEAKER_02: has lifted sanctions on Belarus potash.
20:28
SPEAKER_02: Now, I don't have to tell any farmer listing that fertilizer prices are still high, not just high, still high.
20:36
SPEAKER_02: Now, eventually that means more potash fertilizer coming into the United States because we initially Trump initially put sanctions on Belarus because of their close relationship to Russia and their involvement, pseudo-involvement in the Russia and Ukraine war.
20:53
SPEAKER_02: But before potash can start coming over to this great country, Europe is going to have to lift their sanctions because that Belarus potash goes through Lithuania.
21:05
SPEAKER_02: So at least it's a step in the right direction.
21:08
SPEAKER_02: Another one, uh very late Friday.
21:11
SPEAKER_02: So that's one advantage of going on Saturday morning, Tommy.
21:16
SPEAKER_02: USDA announced that Mexico has committed to repay the water deficit under a 1944 treaty that we have.
21:25
SPEAKER_02: They're going to meet their outstanding water delivery obligations to U.S.
21:29
SPEAKER_02: farmers and ranchers.
21:30
SPEAKER_02: That's mainly in South Texas, under that water treaty that I that I talked about.
21:36
SPEAKER_02: And they're going to release uh 202,000 acre feet of water, uh, and it's going to begin the week of December the 15th.
21:45
SPEAKER_02: And the two governments are negoti are going to negotiate a broader plan to repay the remaining deficit, hopefully by January 31, 2026.
21:56
SPEAKER_02: So that's an issue that uh previously Trump recently said if they don't solve that problem, meaning Mexico, he's going to put another 5% tariffs on Mexico.
22:07
SPEAKER_02: Well, that didn't sit well with their president.
22:10
SPEAKER_02: And Trump gets along very well with uh Scheinbaum, their Mexico's president.
22:15
SPEAKER_02: And just this is just another indication, Tommy, that they can that uh we can work uh with Mexico, especially with their president.
22:24
SPEAKER_02: The other update I have that caught my eye this morning the European Union is freezing$246 billion of Russian assets until the war with Ukraine ends, and they have to agree to help reconstruct Ukraine.
22:39
SPEAKER_02: So that that's a big development.
22:42
SPEAKER_02: Even nowadays,$246 billion is a chunk of money.
22:46
SPEAKER_02: And that that's the three updates that caught my eye.
22:49
SPEAKER_01: Oh, I'm not gonna let you one up me, Mr.
22:51
SPEAKER_01: Wiesmeyer, on your show.
22:53
SPEAKER_01: I got more breaking news.
22:54
SPEAKER_01: You ready?
22:55
SPEAKER_01: Yes.
22:56
SPEAKER_01: It came out a little late last night.
22:57
SPEAKER_01: And I don't know if it's a big deal, but I'll read it out, okay?
23:00
SPEAKER_01: Yeah, you get a little drink, I'll go solo on me, and you clear your throat.
23:04
SPEAKER_01: All right, oh, I'm solo on you.
23:06
SPEAKER_01: Hold on.
23:06
SPEAKER_01: Here I come.
23:07
SPEAKER_01: Solo on me.
23:08
SPEAKER_01: There I am, Tommy Grosafi.
23:10
SPEAKER_01: All right, everyone.
23:10
SPEAKER_01: I don't like this one, but I gotta read it to you, and I'm not proud of this, but this is just what's going on, right?
23:15
SPEAKER_01: JBS just announced it's closing its Riverside California beef facility on February 2nd, 374 jobs gone.
23:22
SPEAKER_01: They blame optimization, but well, then someone put their opinions about the truth.
23:28
SPEAKER_01: But Google that folks, JBS just announced they're closing a Riverside California beef facility February 2nd, about 400 jobs lost.
23:36
SPEAKER_01: Not not as dramatic as Tyson, but damn it, if it's you who lost your job, it's a big deal.
23:43
SPEAKER_01: True.
23:43
SPEAKER_02: A little perspective on that, Jim.
23:45
SPEAKER_02: Yep, and JBS is uh primarily a pork uh processor, okay.
23:50
SPEAKER_02: That's one perspective, but two, this just shows you the continued consolidation within the meat meatpacking industry as a result of just what's going on, the lowest uh cattle inventory since 1951, is it?
24:04
SPEAKER_02: Yes, and uh you have that demand still pretty uh robust for that uh for our steaks and hamburgers, etc., despite our president trying to knock down the price of uh both cattle and hamburger.
24:19
SPEAKER_02: So I think the market's gonna determine when we get that price down, and the the demand is gonna have to falter, but it hasn't yet.
24:28
SPEAKER_01: Yeah.
24:28
SPEAKER_01: I was out the dinner Thursday night with your buddy Mike Sands, and he continues to say, we are teaching Mexico how to raise cattle and sell them and finish them.
24:38
SPEAKER_01: And every day that these cattle don't cross here, they're gonna have to figure something else out.
24:42
SPEAKER_01: We'll get to that in a little bit.
24:43
SPEAKER_01: Let's go to the Fed.
24:45
SPEAKER_02: Well, the Fed, as widely expected, dropped the Fed funds rate 25 basis points.
24:51
SPEAKER_02: That's the third consecutive cut, Tommy.
24:54
SPEAKER_02: And it the the initially, some people misread Jerome J.
24:59
SPEAKER_02: Powell, the Fed chairman's press conference.
25:01
SPEAKER_02: They thought he was more dovish.
25:03
SPEAKER_02: But when you really listen to the full press conference, I would say he was just less hawkish, but he was not dovish.
25:12
SPEAKER_02: I say that because if you look at the dot map that I think you have, they show only still only one cut, one further cut in 2026, where I know Trump wants two, three, or more cuts.
25:26
SPEAKER_02: And Jerome J.
25:27
SPEAKER_02: Powell is going to be Fed chairman until May of next year.
25:32
SPEAKER_02: And so he's still gonna be data dependent.
25:35
SPEAKER_02: Now we're gonna get some jobs report in December and other inflation reports, but even Jerome J.
25:41
SPEAKER_02: Powell said, you know, that data may not be truly reflecting because of the shutdown.
25:47
SPEAKER_02: It may be distorted data.
25:49
SPEAKER_02: So that tells me we may have to, we're gonna have to go into January and look to see how this data goes.
25:56
SPEAKER_02: Bottom line, uh, we got the cut, three consecutive cuts.
26:00
SPEAKER_02: It looks like they may cut another 25 basis points in January, but we had some dissension within the voters, the 18 voters on the FOMC.
26:10
SPEAKER_02: And I think that's gonna be the trend in the in uh throughout 2026, where you've got some major differences within the board of governors of the Federal Reserve.
26:22
SPEAKER_02: And so I don't think you're gonna have a unanimous vote many times in the FOMC meetings in 2026, but interest rates are going down.
26:34
SPEAKER_02: I tell farmers this time next year, hopefully you'll have at least a per another percentage, 100 basis points, or maybe 150 basis points down.
26:45
SPEAKER_02: So that'll mean less financing cost.
26:48
SPEAKER_02: Where if you had your financing cost of what seven to eight percent in farm country, maybe they'll go down to six percent or five and a half, five and a half to six percent.
26:58
SPEAKER_02: And that's not too bad.
27:00
SPEAKER_02: I mean, I do the days of three percent or lower are gone.
27:04
SPEAKER_02: Forget it.
27:05
SPEAKER_01: Yeah, hey, I'm having a little problem pulling up graphics, but I'm going to hop out of the show and hop right back in.
27:12
SPEAKER_01: I'm gonna give you your next topic because I I just wanna I think I'll get it if I click back in.
27:18
SPEAKER_01: I think we'll keep recording and you'll be fine.
27:20
SPEAKER_01: We did Fed rate decision.
27:22
SPEAKER_01: We'll do this.
27:23
SPEAKER_01: You keep talking.
27:24
SPEAKER_01: I'm gonna log out, log back in.
27:26
SPEAKER_01: Sure, and you just keep going until I pop back.
27:28
SPEAKER_01: I gotta get these charts up.
27:30
SPEAKER_01: Okay, you keep going, Jim.
27:31
SPEAKER_01: Bye-bye.
27:31
SPEAKER_02: Okay, I'm going to go with a very sensitive topic here again, is the possible reopening of the US Mexico border relative to the screw worm incident.
27:46
SPEAKER_02: Now, I wrote uh an item yesterday, yeah, yesterday, Friday, on a possible pre-christmas announcement as they're eyeing in the in the Trump administration a uh reopening of that border, maybe sometime in 2026, a phased reopening.
28:04
SPEAKER_02: Now, the it what I'm hearing is most observers in the market believe that actual cattle movements uh would not resume until early 2026.
28:15
SPEAKER_02: Now, some of the key provisions, I believe, are being part of the possible plan that could be announced.
28:22
SPEAKER_02: They would establish a quarantine zone at a roughly 12 miles around the site of any future screw worm detections in Mexico.
28:32
SPEAKER_02: If that's the case, that would still allow the movement of Mexico Mexican cattle to continue, even if there were new screw worm incidents in Mexico, as long as you had that uh 12-mile quarantine uh uh uh area.
28:50
SPEAKER_02: And that that targeted buffer approach is intended to minimize the risk while allowing that cross-border cattle to continue.
28:58
SPEAKER_02: This is speculative, but uh, I'm hearing it from pretty good people.
29:02
SPEAKER_02: And I know Secretary Rollins met with some cattle people earlier this week, and that's why I think I got some of the reports from people at that meeting, to tell you the truth.
29:12
SPEAKER_02: Okay, okay, I'm back.
29:14
SPEAKER_01: Can you can you hear me?
29:16
SPEAKER_02: I can hear you fine.
29:17
SPEAKER_01: Yeah, can you see me?
29:19
SPEAKER_02: Well, I have to go to another screen.
29:20
SPEAKER_01: I see you.
29:21
SPEAKER_01: Don't do it, don't do it.
29:23
SPEAKER_01: All right, let's continue with the yeah.
29:24
SPEAKER_01: All of a sudden I couldn't click.
29:25
SPEAKER_01: I'm like, oh no, we're not messing this up.
29:28
SPEAKER_01: Well, and I know you could have gone for an hour, you'd be like, Yeah.
29:34
SPEAKER_01: All right, did we do USMCA?
29:36
SPEAKER_01: Yes, no, I did not do USMCA.
29:39
SPEAKER_02: We can do that.
29:40
SPEAKER_01: Uh uh.
29:41
SPEAKER_01: Right there, USMCA, Jamison Greer.
29:43
SPEAKER_01: That's what I said.
29:46
SPEAKER_02: If you want to go to a guy who's not murky, okay, he's uh articulate, but he's he's quieter than the other cabinet members, but he's the nuts and bolts.
29:58
SPEAKER_02: He does the work, he does the hard work.
30:01
SPEAKER_02: Now, he was at the Atlantic Console Thursday, actually, and they did an extended a uh Wall Street Journal reporter, IP, his last name is IP, did the interview, and it really was a good interview.
30:15
SPEAKER_02: Uh, he just didn't ask about soybeans, which I wished he would have.
30:18
SPEAKER_02: But the one the the one of many things that caught my ear, Tommy, was when he was asked about what about USMCA because the Trump administration wants a major overhaul.
30:30
SPEAKER_02: Now, he mentioned he revealed that he has not met jointly together with Canada and Mexico this year, but he said the U.S.
30:41
SPEAKER_02: relationships with both Mexico and Canada are too different for a one-size-fits-all renegotiation.
30:49
SPEAKER_02: Wow, that means that at least their baseline plan is they want bilateral agreements as opposed to existing trilateral agreements.
30:59
SPEAKER_02: Now, some people tell me that's just leveraging, that's just jaw boning until they get what they want.
31:04
SPEAKER_02: But he openly acknowledged that an exit from the traditional USMCA is an option under the sunset clause.
31:13
SPEAKER_02: Now, what do they want?
31:14
SPEAKER_02: Well, uh he said areas that need to be fixed is the automotive rules of origin, need strengthening to stem that production shifting to Mexico.
31:24
SPEAKER_02: In other words, he wants more production back in the United States.
31:27
SPEAKER_02: Now that affects Canada too.
31:29
SPEAKER_02: And we had Sean Haney on Agri-Talk, and he he he acknowledged that the auto sector, which has very good lobbying, he said better than the ag lobby in Canada, is worried that Trump wants more manufacturing of cars coming back to the United States.
31:46
SPEAKER_02: And he also wants to lower the auto tariff rate, the MFN, most favored nation tariff rate of 2.5% that the U.S.
31:54
SPEAKER_02: leverage that limited the U.S.
31:57
SPEAKER_02: leverage last time.
31:58
SPEAKER_02: And he also said Section 232 auto tariffs have now altered that landscape.
32:04
SPEAKER_02: So, bottom line, he wants similar content increasing rules for non-auto sectors.
32:10
SPEAKER_02: So he wants to open up that uh agreement.
32:13
SPEAKER_02: And I think Canada and Mexico will team up together to probably fight some of the US positions.
32:20
SPEAKER_02: So, but we've got a long haul on this one because really the the heat of the talk starts July of next year, Tommy.
32:28
SPEAKER_01: Oh boy, oh boy, lots of stuff going on.
32:30
SPEAKER_01: Let's take a little break here for commercial identification.
32:33
SPEAKER_01: Here, if you like Mr.
32:34
SPEAKER_01: Weismeyer, you can see him on my new website, www.agbull.com.
32:40
SPEAKER_01: As fast as Jim's putting out articles, you can see them there.
32:43
SPEAKER_01: Of course, if you want to subscribe to Jim directly, he makes it super easy.
32:47
SPEAKER_01: We'll get that there.
32:48
SPEAKER_01: It's going at the bottom of the ticker.
32:50
SPEAKER_01: Weismeyer at gmail.com.
32:53
SPEAKER_01: Weismeyer.
32:54
SPEAKER_01: Okay, moving forward.
32:56
SPEAKER_01: We have premium content now.
32:57
SPEAKER_01: We are putting out stuff all the day, texting people, emailing morning summaries, afternoon summaries, educational videos,$25 a month,$250 a year.
33:09
SPEAKER_01: Thank you to all the new subscribers last week.
33:11
SPEAKER_01: We appreciate it.
33:12
SPEAKER_01: We will continue to get more content put out as 2026 rolls around.
33:18
SPEAKER_01: I have a couple surprises coming up for the show, but I can't tell you because it's a surprise.
33:22
SPEAKER_01: All right, Mr.
33:23
SPEAKER_01: Weissmeyer, I'm gonna pop up these banners, but I kind of feel like you talked about it already.
33:28
SPEAKER_01: We just did uh USMCA.
33:31
SPEAKER_01: We did you talked about water already, right?
33:35
SPEAKER_01: We talked about water.
33:36
SPEAKER_02: We've got a temporal tentative agreement short-term with a long-term agreement sometime in January.
33:42
SPEAKER_02: So that's a good thing for South Texas farmers who need the water.
33:46
SPEAKER_01: Now we talked about the U.S.
33:48
SPEAKER_01: Mexico border.
33:48
SPEAKER_02: We did talk about that sensitivity and of a speculative nature to be up front, but it you just don't make this stuff up.
33:56
SPEAKER_02: They they've got they want it science-based.
33:58
SPEAKER_02: I want to emphasize that.
34:00
SPEAKER_02: Whatever they do announce, whenever they announce it, you'll hear Rollins say this is science-based because they're skittish about this one.
34:09
SPEAKER_02: So they want protective measures in store to protect the U.S.
34:13
SPEAKER_02: capital.
34:13
SPEAKER_01: I know there's like a big dog food company that that's their whole motto, science-based.
34:18
SPEAKER_01: Maybe that's the name of the damn dog food.
34:19
SPEAKER_01: All right, Blender Tax Credit.
34:22
SPEAKER_02: There is a bill put out by introduced by Senator Marsha, what's her name, Blackburn, from Tent, Tennessee, who wants to go back for six months because for good reason the IRS and Treasury Department still have not released 45Z sustainable aviation fuel details, and they will shortly just for the 2025 tax year, but not 2026.
34:52
SPEAKER_02: So she's saying in her bill, you know, let's give the producers the option for a higher, basically, it's a higher payment price.
35:01
SPEAKER_02: I think it went up to buck 75 in the blenders tax credit, until the Treasury Department comes out with these uh rules and regulations.
35:11
SPEAKER_02: That's that's the nut there.
35:12
SPEAKER_02: Now, whether or not it'll fly remains to be seen because it'll have a price tag.
35:16
SPEAKER_02: Six-month price tag won't be nearly as high as a multiple-year price tag.
35:22
SPEAKER_02: So I would it's legislation I'm tracking because some people really would be would would favor that legislation in the biofuels industry.
35:31
SPEAKER_02: Because right now, biodiesel is not near the as robust as it was because of this lack of uh focus on the on the Treasury Department's fault.
35:41
SPEAKER_02: And I wish someone would ask President Trump about this.
35:45
SPEAKER_02: Maybe he could get Bessent going uh on this issue.
35:48
SPEAKER_02: Now, to be fair to the tax people, they're saying they're they're busy as all heck getting ready to implement the one big beautiful bill, tax incentive provisions for January 1 next year.
36:02
SPEAKER_02: So that's their reason.
36:04
SPEAKER_02: But we but we have a void here under implementing the sustainable aviation fuel 45Z.
36:12
SPEAKER_02: But here's the farm policy angle, Tommy.
36:15
SPEAKER_02: If you you if you're if you're not going to have many new trade agreements that are robust, that have big additionality for U.S.
36:24
SPEAKER_02: farm exports, we have some, you have to emphasize the domestic utilization of farm products.
36:32
SPEAKER_02: Well, corn and and and and soybeans emphasize the renewable fuel standard program, year-round E15, and also the 45Z program.
36:42
SPEAKER_02: Which crops are going to be eligible?
36:44
SPEAKER_02: At what level?
36:45
SPEAKER_02: What tax incentives are involved here?
36:47
SPEAKER_02: And those are all unknowns at this time.
36:50
SPEAKER_02: So we we haven't seen the domestic utilization side certainty come into these programs, and that that's that's a big void here that I hope the Trump administration clarifies sooner rather than later.
37:06
SPEAKER_01: Here we go.
37:06
SPEAKER_01: ACA premium subsidies.
37:08
SPEAKER_02: There's one affordable care act is ACA.
37:11
SPEAKER_02: It's also called Obamacare.
37:12
SPEAKER_02: We've got the Senate uh this past week rejected both the Republican approach and the Democratic approach.
37:19
SPEAKER_02: So next week, this coming week, we'll see the House uh uh uh debate their version of the bill, Republican bill, and it doesn't include an extension of the enhanced Obamacare incentives that was that was in place during the COVID years.
37:38
SPEAKER_02: They have their different approach.
37:40
SPEAKER_02: So it'll be curious to see what the vote is.
37:42
SPEAKER_02: But you have a number of moderate Democrat and moderate Republicans who want to go with a one or two-year extension of those enhanced Obamacare or ACA incentives in return for some reform of the uh of the program.
38:01
SPEAKER_02: So there's your battle lines that's going to be clearly evident next week on the floor of the House.
38:06
SPEAKER_02: And frankly, I've got people saying they don't know which way it's gonna go.
38:11
SPEAKER_02: So this is gonna be a battle to watch.
38:12
SPEAKER_02: Yeah, yeah.
38:13
SPEAKER_02: And at more than a few farmers take uh Obamacare.
38:17
SPEAKER_02: That uh initially surprised me when I but when I thought about it, I said, you know, if if a spouse doesn't work off the farm, uh, you know, uh farmers have to pay big time for individual health insurance.
38:30
SPEAKER_02: So that's why probably one of the biggest reasons why uh there's more than a few farmers in that around 20 to 22 million people taking AS uh ACA.
38:42
SPEAKER_01: All righty.
38:43
SPEAKER_02: China's soybean trade discrepancy, but well, we even have the naysay, some of the naysayers who errantly said there was no agreement.
38:52
SPEAKER_02: Well, there's no announced agreement.
38:55
SPEAKER_02: Now that uh China continues to buy U.S.
38:58
SPEAKER_02: soybeans, even though it's at a buck 20 or so premium to Brazilian beans, there must be something going on.
39:07
SPEAKER_02: And even though the price goes down, I think most of that was factored in.
39:12
SPEAKER_02: But we still have some murkiness relative to the timelines as far as when this 12 million ton uh soybean purchases should be made on the part of China commitment.
39:25
SPEAKER_02: Initially, if you'll recall in a White House fact sheet, that was not so factual, apparently, they said by the end of this December, November, December purchases.
39:34
SPEAKER_02: That's not the case.
39:36
SPEAKER_02: Then later on, Scott Besson said the end of February, and then you heard both Bessent and Greer say the season.
39:46
SPEAKER_02: Well, they haven't defined the season.
39:48
SPEAKER_02: Some people think that's the marketing year, other people think that the season is that time frame, and this is why Besson probably said end of February, because usually US sells the most of its soybeans to China in the October through February timeframe.
40:05
SPEAKER_02: That's prior to Brazil harvesting their new crop.
40:10
SPEAKER_02: So I think it's a blend of both, Tommy.
40:13
SPEAKER_02: I'm gonna come out with a story maybe today that shows it looks.
40:18
SPEAKER_02: like it's the it's on a marketing year basis that makes the most sense to me right right because if it's on a marketing year basis that means that the the bulk of this 12 million tons 70 should come in that uh in the period uh prior to the november december and february january february yeah and then 30 percent in the remainder of the of the soybean marketing year that also makes sense if you know that remember they said the other commitment was 25 million metric tons for they said years 26 27 and 28 well you don't double count if you do it basis of marketing year okay then that would be 2627 2728 and 2829 and that makes the most sense to me but sometimes logic and washington programs don't mesh together but i have asked treasury i have asked qsda please tell me if this is a correct interpretation of that so that's where we're at on that but bottom line on this their continued purchases they're you know depending who you talk to in the trade there they're best and said that they're within the uh the timeline that means to me that that February probably uh is is succinct there and he says they're right going in line so we're gonna see some additional purchases and some of these naysayers are gonna have to maybe admit that they were wrong that they wouldn't purchase very many U.S.
41:59
SPEAKER_02: uh soybeans that tells me that industry analysts may and I emphasize may be good at crop analysis but when it comes to politics they don't know much I like that I like that let's head to my home state for the gossip well Trump is mad at Indiana certain republican politicians there in the state senate because they rejected uh India Indiana's redistricting that would have cornered at least two if not more seats for the Republicans it passed the house now Trump in Trump's way have has threatened that uh he'll he'll uh he'll uh uh lobby against the the the yes the the these lawmakers who voted no in their forthcoming elections but Indiana is going to vote again I was told in January so you could still see that redistricting vote uh go through so watch January on that one and this goes into the whole thing about redistricting you'll recall that Newsom in California got got his law through that's gonna mean up to five fewer Republicans there's not many Republicans in the in the Congress anyway from California but it could mean five fewer Republicans and Texas of course the Supreme Court ruled that their redistricting plan is okay and you're gonna have up to five more Republicans in the state of Texas.
43:28
SPEAKER_02: It's gonna be close to wash when we're all said and done in that one but this is uh this is politics 101 that's happening right now that shows you the the significance of these 2026 elections the Democrats uh smell uh the possibility that they're gonna regain control of the house and maybe the senate I don't think the Senate but that's what they hope for but I think it's just still too early because we have to see how the U.S.
44:00
SPEAKER_02: economy is going to work out once we get the full implementation of the one big beautiful bill and if if the US GDP gross domestic product which equals economy if that's more robust than most people think now and interest rates are going lower if they get some of the food inflation which is sticky right now going on a continued downward path yeah your Fed fund rates is going to continue to go lower the economy is going to be better and if that's the case companies are going to hire more because they'll have more certainty with some of the trade policy stuff.
44:39
SPEAKER_02: We will have the Supreme Court ruling out of the way uh probably no later than early 2026.
44:46
SPEAKER_02: So believe it or not we could have some stability in this country in 2026 and that's why it'll be a very happy new year for me if we get any more certainty rather than uncertainty Tommy and that's a pretty good line to leave on isn't it yeah let's uh Q more a few more ag trade ag trade yeah you think we're done oh I thought we were done yeah I thought oh you're the one who sent the notes let's go baby oh my goodness we had a record here I can bottom line pretty quick we had a record ag trade deficit in 2025 that ended at the end of September I could give you the numbers but the the point is we had a record uh um trade deficit of 43 billion in change that's a lot and remember for years we had a U.S.
45:41
SPEAKER_02: agricultural trade surplus and I'm not going to point fingers this is it began in the Biden administration and it's continuing in the Trump administration uh Trump will say that there was not one new trade agreement in the Biden administration but I think it's it's it's a series of reasons why the the dramatic increase in the imports of horticultural crops the value of the dollar uh etc we need to turn this thing around and at least some of these trade agreements that Trump's announced while they're not robust in additionality of U.S.
46:17
SPEAKER_02: farm exports there have been some rice to Japan we have a bigger rice market share ethanol has been a big winner so far China's at least importing soybeans now in sorghum Milo and it's better than zero so I think there's some things going in the right direction and on our other one the deficit is again although narrower uh for the month of uh for for the latest month we have some robust tariffs$32 billion for the last month alone so that's narrowing narrowing the deficit but we still have a big deficit we're chewing through because of the cost of of funding the accumulated deficits that this country has that's why we have to get that economy going and uh watch our spending in Congress.
47:09
SPEAKER_02: So that's kind of what we had out this week with the agricultural trade situation and also the total US trade deficit where our imports from China are down I think 25% that tells you wow the the sanctions there and we're importing less as a result of the tariffs and that and that's what's making the trade deficit from the U.S.
47:33
SPEAKER_02: perspective narrower but we're not exporting as much either that's the bottom line where can we see Mr.
47:40
SPEAKER_02: Jim live the next few weeks as we go into the next few weeks I'm home and I'm gonna recuperate because January's going to be a blur and I've I'm going to to a number of uh states uh crop insurance research uh bureau out in California is coming up I've got farm credit my good friend there the CEO Christy Seifert is uh in January in Florida and number of crop insurance speeches I'll be in North Dakota I'll be in Wisconsin uh going to Wisconsin in January builds character okay and I'll be at a number of other spots uh it's a blur because I have more than a few January speeches and we'll detail those as I get closer to going out Tommy and we'll probably have some Friday or Saturday uh yeah programs more often than not in in January sounds good now you were trying to wrap it up a few clips ago with something super optimistic about if all the things hit you're gonna be super happy say that again the way in because businesses including agriculture is going to have some stability of information maybe Trump's tariffs will settle down maybe we'll get a resolution of the of the uh fights that he's had with Canada so maybe and and the biggest news Tommy will be if we if Trump reduces the remaining 10% fentanyl tariff on China and China uh releases their 10% additional tariffs on U.S.
49:17
SPEAKER_02: soybeans if that's the case then U.S.
49:20
SPEAKER_02: soybeans become much more competitive with Brazilian beans so I think that that's a distinct possibility sometime in early 2026 and overall I said with the economy if the you if the one big beautiful bill gives U.S.
49:39
SPEAKER_02: businesses the the the the comfort of knowing what the policy is going to be they can hire more people they can come out and with more entrepreneurial products and that gets the economy going again and that's good for domestic utilization of farm products etc that's a pretty rosy view of 2026 I'm hoping for it and I'm sticking with it right now.
50:03
SPEAKER_01: Mr.
50:03
SPEAKER_01: Jim We Smyrno see you buddy yeah see ya