Latest / AG Bull / Crisis at the Border: Cattle, Crops, and Market Volatility

Transcript

Crisis at the Border: Cattle, Crops, and Market Volatility · AG Bull

• 0:19
  Speaker 1: happy friday everyone.
• 0:20
  Speaker 1: Tom grisafi here at nesvic trading in nashville.
• 0:23
  Speaker 1: I'm an ap associated person.
• 0:25
  Speaker 1: We do business as ag bull trading.
• 0:28
  Speaker 1: Now this is the ag bull media channel.
• 0:30
  Speaker 1: As you know, on fridays we like to wrap up the week with the one and only Mr Don Wick.
• 0:34
  Speaker 1: Bring him in Red River Farm Network.
• 0:36
  Speaker 1: We got a nice little list.
• 0:38
  Speaker 1: We took some notes before the show and I filled up a whole page.
• 0:41
  Speaker 1: Stage is yours, but I'm going to throw out the first.
• 0:44
  Speaker 1: Stage is yours, but I'll throw you a first question.
• 0:46
  Speaker 1: If I say the word cash cattle, what do you say?
• 0:50
  Speaker 2: Wow, I guess that's about it.
• 0:54
  Speaker 2: You take a look at what we're moving these prices up $10 out of whack.
• 0:56
  Speaker 2: It is pretty amazing.
• 0:58
  Speaker 2: You tell me, Tommy, are we just that tight in this cash cattle situation, or what are we seeing in here?
• 1:05
  Speaker 2: Yeah?
• 1:05
  Speaker 1: well, we do a morning conference call every morning at NASVIC.
• 1:09
  Speaker 1: The Nashville team and a bunch of people call in and part of this is just from not getting those cattle from Mexico.
• 1:16
  Speaker 1: I'm not sure exactly how many cattle are coming over from Canada.
• 1:20
  Speaker 1: There's a lot of moving parts but the screw worm the inventory of cattle was extremely tight and then when we stopped bringing in cattle from Mexico, that didn't help.
• 1:31
  Speaker 1: Not to mention demand's.
• 1:32
  Speaker 1: Good People are consuming.
• 1:33
  Speaker 1: Stores right now have to go get bought.
• 1:36
  Speaker 1: They're buying pork and beef today to get ready for 4th of July, so it is June 6th, but they have to place those orders so they can get that meat into the store here.
• 1:48
  Speaker 1: So it's a wild ride.
• 1:52
  Speaker 1: June live cattle today traded up like $3.85, I believe, close to $4.
• 1:56
  Speaker 1: June options expired and we're trading at prices.
• 1:59
  Speaker 1: If someone had told you cattle, we're going to go here six months ago, they would have thought you were fibbing.
• 2:05
  Speaker 2: Yeah, and, like you said, it's amazing the demand has held up.
• 2:08
  Speaker 2: Is it kind of a rising tide raises all ships kind of thing?
• 2:12
  Speaker 2: Is it hog prices, prices, are they coming along with it?
• 2:15
  Speaker 1: yeah, that's what I'm thinking and I've heard from some hog producers.
• 2:17
  Speaker 1: There's some disease trouble.
• 2:18
  Speaker 1: But when you look at all the months in hogs you're going to put three, four dollars uh three, four cents on uh beef every day.
• 2:26
  Speaker 1: You're not just going to have hogs stay there.
• 2:28
  Speaker 1: The the gap between where uh cattle prices and beef and pork boy.
• 2:33
  Speaker 1: I talked to a friend of mine.
• 2:34
  Speaker 1: He's a hog producer and he said he's making margin calls.
• 2:37
  Speaker 1: He was heavily hedged out for multiple months and hogs starting to put on two a day.
• 2:43
  Speaker 1: So it's it's nice to see that is one bright spot in agriculture when so many people feel like agriculture struggling not from the ranchers perspective, correct?
• 2:53
  Speaker 2: Yeah, exactly, it's a kind of rare error that we're dealing with in this cattle market and it's fun to see.
• 2:59
  Speaker 1: Yeah, all right.
• 3:00
  Speaker 1: I don't know if you were on the interweb yesterday.
• 3:02
  Speaker 1: Was there some spat or something I need to know about?
• 3:04
  Speaker 1: Was there some bromance that broke up?
• 3:07
  Speaker 1: What happened yesterday, don?
• 3:21
  Speaker 2: Well, of course we all saw the headlines between President Trump and Elon Musk.
• 3:23
  Speaker 2: There was a lot of back and forth, although I think the staff was trying to get those two together and calm things down here at the end of the week after that.
• 3:27
  Speaker 2: But what I find interesting in all that is President Trump also had a conversation yesterday with Chinese President Xi.
• 3:30
  Speaker 2: Of course that's a huge situation, for ag Trade was the big part of that discussion.
• 3:35
  Speaker 2: Both Xi and Trump afterwards said it was a good call.
• 3:44
  Speaker 2: They both invited the other to come to their respective countries.
• 3:46
  Speaker 2: Trump talked that a meeting would happen soon Big news, I would think, for agriculture.
• 3:49
  Speaker 2: But it kind of got lost in the news cycle with all of the Elon drama that we had yesterday.
• 3:54
  Speaker 1: Yeah, and right here on my phone looking at X.
• 3:56
  Speaker 1: I do have breaking news from 13 minutes ago and we are recording this at 145 on Friday Trump meeting with China on June 9th in London.
• 4:07
  Speaker 1: So Trump's supposed to meet with China on June 9th in London.
• 4:11
  Speaker 1: Look at me giving you the news live on a recording.
• 4:14
  Speaker 1: All right, we'll be here all week.
• 4:15
  Speaker 1: What else do you have?
• 4:16
  Speaker 1: So you're right, that should have been huge news.
• 4:19
  Speaker 1: The grain should have reacted positively, the stock market should have reacted positively, but Tesla traded down like 16%, they said.
• 4:28
  Speaker 1: Elon Musk personally lost $30 billion yesterday just on that little he said.
• 4:33
  Speaker 1: She said lover's quarrel there, so they went from best of friends to enemies pretty quickly.
• 4:42
  Speaker 1: Yeah, I mean, who knows?
• 4:44
  Speaker 1: I have to tell you it was just.
• 4:49
  Speaker 1: I went home and I sat on the couch and I was like, did that really happen?
• 4:54
  Speaker 1: You have the world's richest man and some would say the world's most powerful man arguing like little kids on the internet.
• 5:01
  Speaker 1: What a time to be alive.
• 5:04
  Speaker 2: It is.
• 5:05
  Speaker 2: It's pretty dramatic, pretty funny stuff.
• 5:07
  Speaker 2: Also this week in news, president Trump put out his fiscal 2026 budget proposal.
• 5:14
  Speaker 2: For agriculture, they are looking at a $23 billion spend for USDA.
• 5:22
  Speaker 2: That's down about $7 billion from what we have here in 2025.
• 5:26
  Speaker 2: This proposal would also take some pretty big cuts out of some of the traditional ag programs FSA looking at a cut of about nearly $400 million.
• 5:36
  Speaker 2: Nrcs there would take a whack of about $800 million looking at dropping a lot of the technical assistance that we have for conservation programs.
• 5:45
  Speaker 2: Keep in mind, though, it's Congress that puts out the money.
• 5:50
  Speaker 2: They authorize the dollars, no matter if it's Trump or whoever is sitting in the Oval Office.
• 5:55
  Speaker 2: They don't pay a lot of attention to these budget proposals, but it does kind of give us a frame of reference of what the administration is looking at as we go into another budget cycle.
• 6:05
  Speaker 1: Yeah, interesting times On my end on the outside market just incredible volatility.
• 6:10
  Speaker 1: Yesterday, when those two started fighting, we had a big, rather significant sell-off in stocks that we've since bounced.
• 6:16
  Speaker 1: Today had a nice rise in stocks.
• 6:18
  Speaker 1: Gold was active this week.
• 6:20
  Speaker 1: Bitcoin was active this week.
• 6:22
  Speaker 1: I would say I spent the most time if I in this office I have three screens.
• 6:26
  Speaker 1: All my meats are on the right and then grains are in the middle and outsides are on the left I probably spent the most time watching the meats.
• 6:32
  Speaker 1: Not necessarily that people were actively hedging.
• 6:35
  Speaker 1: I feel like people are hedged or buying LRP insurance already.
• 6:38
  Speaker 1: It's funny, don, as the market keeps going up, people sometimes do less because why hedge?
• 6:45
  Speaker 1: It just goes up $3, $4 every day.
• 6:47
  Speaker 1: Right, but that's not how this ends.
• 6:49
  Speaker 1: I've seen some big, big bull markets and when this ends, it could it's not, it could be ugly.
• 6:55
  Speaker 1: It's almost guaranteed to be ugly because there's so much energy in in this cattle market and if cattle continue to go up and we hurt demand that that could be a problem.
• 7:05
  Speaker 1: But everyone you know I work with some smart people They've thought this is going to happen for three months.
• 7:09
  Speaker 1: It's not happening.
• 7:10
  Speaker 1: I don't know.
• 7:11
  Speaker 1: Have you guys changed your eating habits up there in Grand Forks?
• 7:13
  Speaker 1: No, we've still got a lot of steak.
• 7:15
  Speaker 1: You're laughing, that's not a trick question.
• 7:17
  Speaker 1: I mean is Mrs Wick making you ramen noodles?
• 7:22
  Speaker 1: Have you changed anything Not?
• 7:25
  Speaker 2: at all.
• 7:26
  Speaker 2: We had steak last night and ribs this last uh weekend.
• 7:29
  Speaker 2: So yeah, we're, we haven't changed this media menu at all good stuff.
• 7:33
  Speaker 1: Well, speaking of good stuff, I heard you got to spend some time with the future folks in agriculture in north dakota.
• 7:39
  Speaker 1: You want to talk about that a little bit?
• 7:40
  Speaker 2: north dakota ffa had their convention this week.
• 7:43
  Speaker 2: I always love whether it's we cover all three states that we're in north dak, dakota, minnesota and South Dakota and go to the national meeting, and to me it just recharges our battery every time we get a chance to get connected with these young people.
• 7:54
  Speaker 2: You got to be pretty enthusiastic about what the future is for this business.
• 7:58
  Speaker 2: When you see those young men and women in the blue and gold jackets.
• 8:02
  Speaker 2: They just they shine.
• 8:04
  Speaker 2: They really are enthusiastic and are so sharp.
• 8:07
  Speaker 2: It's pretty gratifying to sit in the audience and see what we've got coming behind us.
• 8:14
  Speaker 1: That's awesome.
• 8:15
  Speaker 1: Well, prices go up, prices go down, but we've got to be bringing in people, the younger ones Several businesses I've been associated with.
• 8:23
  Speaker 1: But when a business stops recruiting young talent and retaining them not just like, hey, we hired a bunch of people and then you look around two years later they're not there when businesses can't hire young people and retain them, it's, it's tough on the business, right?
• 8:39
  Speaker 1: You're even seeing that in your own.
• 8:40
  Speaker 1: Our dear friend Randy's getting ready to retire, right?
• 8:44
  Speaker 2: Broadcasters here, yeah.
• 8:51
  Speaker 1: Well, we're going to have to get them on the show and get one or two more podcasts in with them.
• 8:57
  Speaker 1: But to get those young people to do ag media, ag journalism, agriculture In the old days we were losing a tremendous amount of talent out of North Dakota and Minnesota.
• 9:07
  Speaker 1: I felt like they were going to the big cities, to Minneapolis or Chicago, and I feel after COVID people kind of started to like living out in the country again.
• 9:14
  Speaker 1: It's become very popular, in my opinion.
• 9:17
  Speaker 1: But we need to stay optimistic for the future of agriculture and when you go to a meeting like that, you feel good leaving Don.
• 9:26
  Speaker 2: I really do, and attendance is up.
• 9:28
  Speaker 2: They've got membership that's on the increase as well, which says a lot.
• 9:32
  Speaker 2: Their biggest challenge is they don't have enough ag teachers.
• 9:35
  Speaker 2: That's the one hurt that they have.
• 9:37
  Speaker 2: There's not enough teachers to meet the demand they have for young people going into the ag classes.
• 9:42
  Speaker 2: Talk with the state FFA advisor and they're getting calls from schools wanting to add a new ag program or expand their program and there's just not enough teachers that are available to get that job done.
• 9:56
  Speaker 1: That's interesting.
• 9:57
  Speaker 1: Well, I do have a little optimism.
• 9:58
  Speaker 1: I noticed a tweet here late in the day, my friend BJ Split.
• 10:02
  Speaker 1: He put out a chart on X.
• 10:04
  Speaker 1: Give Him Credit.
• 10:05
  Speaker 1: He said December 26 corn quietly closed on the highs of the year and that's a little bit of optimism.
• 10:11
  Speaker 1: I do feel like these grains are a little bit undervalued but they could stay undervalued for a long time.
• 10:16
  Speaker 1: It's like when someone says the housing market's soft, yeah well, it could stay soft for years.
• 10:20
  Speaker 1: It could also stay bid for years.
• 10:22
  Speaker 1: But when you look at all the things trading in the world the stock market coming back, all the things trading American ag meats on the highs, corn feels cheap, it just does.
• 10:31
  Speaker 1: And with that December corn today touched $4.50.
• 10:37
  Speaker 1: Note July options folks.
• 10:38
  Speaker 1: July border trade options expire two weeks from today.
• 10:40
  Speaker 1: Could be some fireworks.
• 10:42
  Speaker 1: We go home over the weekend all eyes on the weather how would you say the weather, and the crops look up north Don.
• 10:48
  Speaker 2: You know, some of these stands are a little bit tough.
• 10:50
  Speaker 2: We've got some heat now and it should push through, but we had a lot of crustingusting and we had a spring that went from 90 degrees and 40 mile an hour winds to cold and wet and uh, that combination made it pretty tough on on corn, sugar, beet, soybeans, whatever, trying to just uh get up and get out of the ground.
• 11:10
  Speaker 2: So, um, it's, it's coming, but it's a little bit slower than what I think a lot of guys would like to see.
• 11:15
  Speaker 2: So a little bit of heat wouldn't hurt, correct?
• 11:18
  Speaker 2: Not at all.
• 11:18
  Speaker 2: We'd take it.
• 11:19
  Speaker 2: We'd take another shot of rain here as well.
• 11:22
  Speaker 1: Well, just put your wish list together and a little rain, everything perfect.
• 11:27
  Speaker 1: All right With that.
• 11:27
  Speaker 1: Border Trade, kcm Minneapolis Week closed on the highs today.
• 11:31
  Speaker 1: A little bit of optimism in wheat.
• 11:33
  Speaker 1: Another Twitter friend was showing that the wheat was starting to cross the 50-day moving average, starting to get some positiveness.
• 11:41
  Speaker 1: We need that Our friends up north will start harvesting.
• 11:43
  Speaker 1: When do you figure we start harvesting spring wheat?
• 11:46
  Speaker 1: First few weeks of August.
• 11:48
  Speaker 2: Yeah, late July, early August, kind of depending on how this crop matures.
• 11:53
  Speaker 1: It comes fast 60 days away from harvest yeah, it comes fast.
• 11:56
  Speaker 1: It comes 60 days away from harvest yeah, it comes fast.
• 11:57
  Speaker 1: And very few producers have very much wheat sold or hedged or protected, because spring wheat and other wheats have spent so much time here in the sewer of prices that no one was in a hurry to lock in a dollar loss.
• 12:10
  Speaker 1: Right, we'll see as we come out of that With that.
• 12:12
  Speaker 1: Anything else you want to talk about, mr Wick?
• 12:14
  Speaker 1: It's okay, it's a short show, as always.
• 12:16
  Speaker 1: See as we come out of that with that.
• 12:17
  Speaker 1: Anything else you want to talk about, mr wick, it's okay, it's a short show, as always, we're going to get a lot of chance to do these.
• 12:20
  Speaker 1: But uh, if nothing else, talk about yourself.
• 12:21
  Speaker 1: How do people get your newsletter?
• 12:23
  Speaker 2: uh, we have a newsletter goes out every monday called farm net news, produced by the red river farm network.
• 12:27
  Speaker 2: Uh, just go online to our website, rrfncom, and sign up.
• 12:33
  Speaker 2: We'd love to have you subscribe.
• 12:34
  Speaker 2: Well that's awesome.
• 12:35
  Speaker 1: Tommy Grisafi, ag Bull Trading.
• 12:38
  Speaker 1: Ag Bull Media.
• 12:39
  Speaker 1: Mr Don Wick, red River Farm Network.
• 12:41
  Speaker 1: This is your weekly recap.
• 12:43
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• 12:46
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• 12:49
  Speaker 1: Change that backdrop there and see how fast Joe is on the clicking, how fast he's looking, he's scrolling, he's like I'm going to get it up.
• 12:56
  Speaker 1: He's looking, joe.
• 13:01
  Speaker 1: Joe, let me show you where you can click, like and subscribe.
• 13:05
  Speaker 1: Hold on, don't anybody move.
• 13:07
  Speaker 1: Right here, right here, we could do it right there.
• 13:09
  Speaker 1: There, it is All right.
• 13:11
  Speaker 1: Those are all our social medias.
• 13:12
  Speaker 1: With this.
• 13:13
  Speaker 1: Now, you know that not everything goes perfect.
• 13:15
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• 13:17
  Speaker 1: Now, you know that not everything goes perfect.
• 13:18
  Speaker 1: There's real people clicking real buttons.
• 13:20
  Speaker 1: But if you're involved in agriculture, get a little bit more optimistic as we go home here this weekend and we'll take it from there.
• 13:27
  Speaker 1: We'll see you next week.
• 13:27
  Speaker 1: Thanks everyone.