- Tariffs, Land and the American Farmer
- Mike Tannura, Tstorm.net
From the land to Grant University in Urbana Champaign, Illinois, this is the closing market reported as the April 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Matt Benedict, ag market dot net out of Windsor, Illinois. We'll also be joined, of course, by Mike Tenora on this Thursday. He's with t storm weather, and along the way, we'll hear an excerpt from a webinar that took place a couple of weeks ago on the farm doc site.
Todd Gleason: 00:30It's titled tariffs, land, and the American farmer. You'll want to hear that, and, actually, you can hear the whole of that webinar as a bonus track in the closing market report podcast. Look that up at willag.org under the podcast section.
Announcer: 00:47Todd Gleason services are made available to WILL by University of Illinois Extension.
Todd Gleason: 00:52Make corn for the day settled at $4.77 at a quarter, up 5 at a quarter cents. July at $4.84, 4 and 3 quarters higher. And the December contract at $4.56 and a half, up 2¢ on the day. May beans, $10.53, 12 and 3 quarters higher. July up eleven and three quarters at $10.62.
Todd Gleason: 01:11And November beans, 8¢ higher at $10.35 and a half cents. Bean meal, $2.10 lower. The bean oil, a dollar 74 higher. Wheat futures, soft red, July at $5.44 and a half up a penny. The hard red July at $5.50 and 3 quarters, a half cent higher.
Todd Gleason: 01:29And lime cattle futures in Chicago finished a dime lower at $2.00 $8 Matt Bennett from agmarket.net now joins us. Hi Matt, thanks for being with us. Tell me about the marketplace today. Why the strength in corn and soybeans?
Matt Bennett: 01:44You know, I I think a couple of things are going on. First of all, you know, exports were still pretty darn good for corn. Beans, nothing to write home about. But, you know, when you look at this bean situation, the bean oil really rallied sharply today. You know, last tick that I saw for front month May was up a buck 73.
Matt Bennett: 02:03I don't know if there's an impending RVO announcement. That that would be my initial thought because, otherwise, there's not a whole lot of news out there. So that certainly was supportive towards beans, you know, seeing these May beans close-up, 14 and a quarter. You know, it's the highest close we've had since, oh gosh, is back in, late February. So really nice move on the beans today.
Matt Bennett: 02:27And then, of course, you saw bull spreading for both corn and beans. And I think that's evidenced by the fact that, you know, you talk to a lot of folks that are telling you basis continues to improve for both corn and beans in a lot of areas. And I think that, you know, the farmers sold a lot of stuff earlier in the year. There's not a lot in the farmer's hands, and that's something that we see happen is that basis will improve in those situations.
Todd Gleason: 02:51If it's RVO, do you think it's renewable diesel or SAF?
Matt Bennett: 02:54I would assume it's renewable diesel. But to be honest, there's probably better people to answer that than me. That would be my premonition right off the bat, but, you know, SAF is certainly something people continue to talk about. So I know there's a lot of pressure, you know, or a lot of conversations with the administration, with the ag secretary that, you know, we have to have domestic usage here as we continue to see pretty stiff headwinds whenever it comes to our exports. But exports have been good this year, But we know Brazil is going to continue to grow.
Matt Bennett: 03:27So it's on down the road. We have to have something in place or it could be problematic for us from an export standpoint.
Todd Gleason: 03:34SAF, of course, could be made from soybeans or corn, and you're correct. More likely renewable diesel as, that would be just an addition to the, processing plant for, the oil industry as opposed to something owned by an agricultural entity. What are farmers telling you about how far along they are, and how are you doing in your area?
Matt Bennett: 03:56Yeah. I mean, it just depends on where you're at. You know, I know guys in Iowa that are done. I know guys in Indiana that are done. I haven't heard a whole lot of that in Illinois.
Matt Bennett: 04:05In our part of the world, you know, we're able to run there last week on Thursday and Friday. Of course, we had some rainfall over the weekend. We ended up with inch and a half and trying to get back at it here. But, you know, it's still a little heavy underneath. The ground's been graying off in the afternoons.
Matt Bennett: 04:22These, you know, warm days are certainly helping, but, we're still probably a day away if we want it to be just right. It looks to us like, after next week's early week, storm potential, it looks like we've got a really good window. So, you know, we may be in a holding pattern here for a couple three more days.
Todd Gleason: 04:40What in the commodity markets is concerning you at the moment? What are you watching?
Matt Bennett: 04:44Well, you know, there's been a lot of flip flopping with the dollar here, you know, today. Of course, the dollar is lower, and I think that that's been another thing that's probably supported us. Equities are having a good week. So, you know, your outside influences for the most part have been pretty supportive. Oil was up here today.
Matt Bennett: 05:03But as far as what concerns me, of course, we don't know what the next tariff news is. You know, we we hear that we're supposedly talking with, you know, with China behind the scenes and then people from China come out and say that's not necessarily the case but I would say that's my biggest concern is, you know, are we gonna be able to get something put together, that would at least ease the fears of everyone that, we're not gonna be able to do the kind of trade that we've been doing, especially on the soybean side.
Todd Gleason: 05:30We'll talk with you next week. Thank you.
Matt Bennett: 05:32Absolutely. Thanks, Todd.
Todd Gleason: 05:33That is Matt Bennett. He is with AgMarket.net. Up next, we'll hear an excerpt from a PharmDoc webinar that took place recently titled Tariffs, Land, and the American Farmer. Bruce Sherick, agricultural economist from the University of Illinois and the director of the TIA Center for Farmland Research on campus along with his colleagues in the College of ACES or Agricultural Consumer and Environmental Sciences, Ailey Elmore, who hosts this program, Craig Lemoyne, who helped to put it together, and Steve Brewer, who is with the People's Company, that's a land management and real estate firm out of Clive, Iowa, have a discussion about tariffs, the impact on agriculture, particularly row crop, and some other kinds of agriculture and the value of farmland. We'll pick up with Ailey Elmore, and I'll remind you at the end of this segment where you can hear more from this particular discussion.
Aillie Elmore: 06:36Well, on the production side of things, let's look let's talk about what we actually produce. Gotta turn that stuff into something else. What maybe let's talk to you, Bruce, first. What commodities products could be in for the most hurt when it comes to these tariffs? You know, obviously, the situation is very fluid.
Aillie Elmore: 06:55We don't exactly know where this is gonna end up. But let's just hypothetically say that we end up with some kind of broad based level tariff on all countries. What kind of impacts, or what producers might be most affected?
Bruce Sherrick: 07:11The historic, evidence would point to things like soybeans. The things where we produce and export a reasonable amount of directly, produced product are things that are very influenced by the cost of that. So feed items are very, very sensitive to the cost of soybeans and corn. It's difficult to export live animals, so we do also export a lot of things that support the livestock industry. Those are the obvious starting points. Right?
Mike Tannura: 07:38Sure.
Bruce Sherrick: 07:39If you move upstream to the agricultural input industries and, you know, the John Deere's and the cases and so on, that's a that's a huge concern. We'll probably end up with company sounds like, you know, given can isolate iPhones as an example of something to to not tear. Sure. We'll probably, create exemptions or cutouts for most of the higher value to the higher cost elements in agriculture. But I think it's really straightforward.
Bruce Sherrick: 08:04It's it's corn and soybeans, it's apples, it's almonds, it's pistachios, it's, some versions of processed and canned and easily shipped things, but it's right where you would expect it to
Aillie Elmore: 08:15And Trump's whole, purpose of these tariffs is trying not agriculture, but in broad basis to try to encourage more domestic manufacturing, more domestic usage of what we actually produce. When it comes to agriculture, is it currently feasible for us to actually consume everything that we produce? And what kind of areas should we look to towards growth, if not?
Bruce Sherrick: 08:42Well, I mean, in the current form of production and current form of use, of course not. I mean, we do export a certain fraction. We can't just eat four times as much chicken. There are other industrial uses, though, of course, and it's not as high valued as the ones that if you let markets sort of pick what you can sell it for the most, that's how you clear markets out. Sure.
Bruce Sherrick: 09:05We have a historic emphasis on RFS and renewable fuels and greening of the energy complex that has been probably deemphasized a bit in the And it's not clear how much of that makes sense if it's not a subsidized industry. So it's hard to get rid of the excess. There are despite the public press, there are really good programs, though, for distributing excess food around the world as well, and that still does occur, and we'll get rid of it somewhere. But corn, for instance, people say if you take off the RFS, corn would really go haywire and ice, and not really. The secondary demand for ethanol is about the point where it should be, and RINs are not driving the market anymore.
Bruce Sherrick: 09:47Soybean oil has some additional uses, but not as high valued as current uses. So you get rid of it, but it's not as productive or profitable.
Aillie Elmore: 09:56No, absolutely. And Steve, like from your point of things, what are some of your thoughts around that? Maybe what are some areas in commodity agriculture that you're most excited about when it comes to what we actually produce and maybe some new uses for it?
Steve Bruere: 10:12Yeah. And before I answer that, have just a little tongue in cheek question maybe for Bruce. As you've studied this over history, are people going to eat less because there's tariffs?
Bruce Sherrick: 10:25When the price of food goes up, the distribution of what you eat is very clear. Yeah. Mean, there is
Steve Bruere: 10:30You're to or you're going to eat more grain and less chicken, right? Because it takes more
Bruce Sherrick: 10:37So back so zoom out from The US where we're so rich and we have so much excess caloric intake that it's hard to measure. If you look at it on a world basis, the relationship between income and quality of diet is incredibly strong and incredibly long lasting and incredibly fixed. So about a third of the world, if you gave them an extra dollar, most of it gets spent on food. For two thirds of the world, you give them an extra dollar, and it doesn't get spent on food. So it's the cost of, and the cost of does get affected by where you can and can't sell things.
Bruce Sherrick: 11:05So we've gotten in The US to the point that people can't even answer how much of your income do you spend on food because it's such a small number, we can't track it very easily. In the developing world, that's a question they can all answer, and the answer is all we can. So, yeah, when you start to affect the relative price of food on a world basis, it really does affect what people consume and the quality of health and diets.
Steve Bruere: 11:26I think an example I was sharing with Bruce the other day was on wine grapes. And on one hand, because of the tariffs, it's going to be expensive to import foreign wine into The United States. So one might think, all right, well, that's a positive for American wine producers because it's more expensive to bring those imports into the market. And that's been part of what's been killing the wine industry in The US. But then the barrels, the French barrels that now get imported in The United States are subject to a new tariff.
Steve Bruere: 12:01And I was running some back of the envelope math. A 30% tariff on a French barrel would translate into 1.4 per bottle of additional costs just in tariffs on a bottle of wine. Bruce and I were debating this. Maybe we were drinking a bottle of wine when we were debating it. But when you look at that whole thing, that's where it gets really hard for me to think through.
Steve Bruere: 12:26On one hand, you're helping The US wine industry by reducing the imported wine, but you're costing more to import your barrels and your corks and your glass. And what's the net of that? And then what do you do to consumer demand if we go into a recession? And that's where I just think this thing is it's a real tough thing to figure out. But if you're going to pick a spot to be, I think row crop farms where back to my tongue in cheek comment, I think where people are going to continue to eat, that's where I would want to be right now versus apples and grapes and some of those crops where people can make alternative choices.
Bruce Sherrick: 13:03Okay. Ahead, Let me pick up on what Steve said a little bit. So this complex of things that he was describing, this interconnection is exactly right. It's very complicated. It could be very good for domestic wine producers and it could be very bad for, I don't know, steel producers or whatever.
Bruce Sherrick: 13:20You can pick winners or losers. And whether or not you view that as good or bad is a political debate. And it's a good debate to have.
Craig Lemoine: 13:26I'll throw in the, the uneducated ag comment for everybody.
Todd Gleason: 13:30This is Craig Lemoyne. He's a clinical associate professor in the College of ACES and the director of financial planning programs.
Craig Lemoine: 13:37I mean, wouldn't the incentive be then if you're if you're thinking about this from the wine end, big picture, right? So you have two kinds of outcomes from the casual wine drinker here. Am I going to pay another dollar 40 for a domestic bottle of wine versus the increase on an imported bottle wine, right? Let's say it's $2 or $3 right? I think you reach a point where this is kind of a luxury good and we don't need wine to live, right?
Craig Lemoine: 14:03So maybe I buy a few fewer bottles, but does it really change demand? And I think it would at different price points, right? You've got like a 10 to $20 bottle of wine. You probably would see quite a bit of demand shift. You have a $400 bottle of wine.
Craig Lemoine: 14:17That person's going to pay $500 and they're going to
Bruce Sherrick: 14:19pay $4
Craig Lemoine: 14:19That's really indifferent. So I guess from my perspective on the wine conversation, I think again, to your point, Bruce, it's just very nuanced, right? Because different markets and different price points and they're going to impact and then you can make sort of the more global commentary, right? It's like, well, can we make barrels here at some point?
Bruce Sherrick: 14:40This is your day It'll French
Craig Lemoine: 14:42oak barrels here. But you get the idea. I think, I don't know, to me, price really matters in a lot of this, right? Because if you're really looking at top end bottles of wine, I don't think you're going to see much change. But yeah, if you're going to the grocery store and you've got this like $15 bottle and now it's $22 maybe you don't buy it.
Bruce Sherrick: 15:01So let me try one other way of like de emotionalizing these conversations. Right. So I think you're right. And we do know what elasticity of demand means. Right.
Bruce Sherrick: 15:13So if you have the price of insulin goes up and you're diabetic, you're not going to change how much you consume. Right. And if you are occasional splurger of the more than an $18 bottle and the price changes, you might change your behavior. We know that the elasticity of demand does in fact describe, by definition, the price responsiveness, the the change in demand for a change in price. And so when you take away capacity to buy, those all readjust.
Bruce Sherrick: 15:41Yeah. That's absolutely true. And we can debate and guess what the demand for wine is compared to the demand for processed pork. Sure. Or we can, you know, look at other things.
Bruce Sherrick: 15:51And the way I would demotionalize it is to say, we had never used the word tariff today instead said, what happens when you tax bad behavior? So when you put a tax on cigarettes or when you put a tax on alcohol or when you create things, or what happens when you subsidize good behavior? How much do you respond? It gives you a framework to ask the same question. So if we subsidize recycling, do people recycle more?
Bruce Sherrick: 16:12Not much. If you tax people on cigarettes, do they change their consumption? Not as much as you might have But the interesting ones are things like, french fries. And if you change because of where you grow a tax on a placement or a change in the way you fry them from one type of oil to another and the prices change, you can in fact measure how much more or less people And then relative to the total demand, you have to measure total income and productivity. So the big things, we don't have much debate about.
Bruce Sherrick: 16:44The distributional things are where they all are. And here's where I'll go back to Steve's comment. He had one of the great Steve's those of you who don't know Steve as well as we do, he comes up with some of the most pithy, perfect, great, long lasting comments. And one that he first said was, Zero interest rates created a lot of business models that no longer need to exist. Something like that.
Bruce Sherrick: 17:05Right, Steve? And you may need to clarify. But he's exactly right. Yeah, it's exactly right. And in agriculture, I also point out and we'll both be at the same conference next week.
Bruce Sherrick: 17:16And one of the things I'll present is essentially what asset would you rather own? And in the eighties, we had an ag focused crisis and we didn't have to talk about it as though there was somebody to blame, but we can observe what happened afterward. And then in 02/2008, we had a financial crisis, and there may have been people to blame. But we had an outcome, and it was very bought stuff with money. And in COVID, we had a crisis, and we printed money.
Bruce Sherrick: 17:40And each of those created really great natural experiments. If you print money, get inflation. If you buy assets that appreciate, the government doesn't lose money. If you change the size of the Fed's balance sheet. And in this case, the tariffs, we have some precedent, but we don't have the precedent in the environment that we're in right now.
Bruce Sherrick: 17:58But the the answer is what asset would you rather own? I think it's a pretty clear and compelling argument that that farmland is a pretty good asset.
Todd Gleason: 18:07Bruce Sherick is the director of the TIA Center for Farmland Research and an agricultural economist here on the Urbana Champaign campus of the University of Illinois. You've been listening to a webinar that he, along with his colleagues, Ailey Elmore and Craig Lemoyne, hosted with Steve Brewer, who's from the People's Company out of Ly Of Iowa. It's about an hour long in total, and you can find it on YouTube. Search for YouTube.com/@PharmDoc, and then you'll really need to narrow that down to Tariffs, Land, and the American Farmer webinar, or you can look for it as a bonus track in the Closing Market Report podcast. Mike Tanura is now here to check-in on the global growing regions to see how the weather has been treating the crops.
Todd Gleason: 19:05Hi, Mike. Thanks much for being with us. Let's start in the Plain States with the hard red winter wheat crop. It is up growing and moving through the season quickly. They had been dry, but are conditions like today?
Mike Tannura: 19:18Well, areas needed rain as of yesterday morning. We had about 25% of The US hard red winter wheat crop in a drought and we're defining that as less than half of its normal rain over the last ninety days. Now that has changed a little bit overnight. We saw a lot of rain yesterday and into the overnight hours and then lingering today. Some of these very dry areas saw more than four inches, which is pretty hard to believe because this is an area that only averages about one to one and a half inches in the month of April.
Mike Tannura: 19:49So we've seen a big improvement in drought from that. We also saw rain last weekend. Between those two events, the drought story is pretty much coming to an end for the hard red winter wheat crop.
Todd Gleason: 20:00What is your current assessment of conditions across the Corn Belt?
Mike Tannura: 20:03Well, about 70% of US corn and soybeans were drier than normal over the last last two weeks. So we think that a planting window is actually in place as of today. Now people in Southern Illinois and then onto the South from there would say, Well, it's pretty wet for me. I've had a lot of rain to the South of Interstate 70 and it stretches all the way down into the Memphis region. So that area of corn and soybeans does need drying, but they're kind of becoming the anomaly because everybody else has had either normal rainfall or even a little bit of below normal rainfall in recent weeks.
Mike Tannura: 20:38Now as we move forward, this is one of the tougher forecasts to discuss. We have two systems that are moving through over the next week. One is going to produce rain today in parts of the Plains and in parts of Iowa and Minnesota. That's pretty much similar to what we've seen over the last twenty four hours. It's basically going to continue for another twelve to twenty four hours, and then that's it.
Mike Tannura: 20:59The system is going to send a cold front through the Corn Belt tomorrow and Friday, It's not going to cool off a lot, but it will turn cooler and it will produce some showers and storms in the heart of the Corn Belt. Now, we're not looking for big totals though, so these real wet areas of Illinois and Indiana stretching into parts of Missouri and Southern Ohio, they're not going to get much, maybe less than a quarter of an inch. What happens next is where things get a little more interesting. The cold front is going to sag southward into the Mid South, the same one that's moving through tomorrow, and that's going to lay down a boundary for this weekend. And that should generate some pretty significant totals from parts of Oklahoma and Texas through the Mid South, including some of the drier wheat and also some of the wetter corn and soybean areas we've talked about.
Mike Tannura: 21:44So they're basically going to turn wetter. That gets us through Saturday. We have another system that comes through on Sunday, and this one's going to follow a little bit of a different path. And everybody in the northern growing regions of the Dakotas into Minnesota and Wisconsin, they're going to tap into some pretty significant totals, maybe around half of an inch to one and a half inches if you get lucky. So we'll have to watch that for some minor spring wheat planting delays and maybe even affecting some corn and soybeans.
Mike Tannura: 22:13We have a lot of time to really get worried about it because we can plant all the way into the May before we have any real big concerns. That same system, Todd, is going to send a minor cold front through the Corn Belt, again, a minor rain event coming up for parts of the Corn Belt, but then a repeat to what's coming up for this weekend. A boundary is going to set up in the Southern Corn Belt and in the Mid South, and that should lead to some waves of rain late next week and next weekend, and basically turn the Mid South wetter as we move forward over the next ten days.
Todd Gleason: 22:45And finally, if you could please turn your attention to the second crop or safrinha corn growing regions of Brazil.
Mike Tannura: 22:52Well, was pretty dry leading into the March, we did have some concerns over that. But ever since then, it's been raining and raining pretty nicely. Most of the growing belt has seen near and above normal rainfall over the last few weeks, and that's going to continue for another couple of days at least with a pretty big rain event going through the southern region tonight and tomorrow and then we'll see scattered storms in the northern areas going forward. We do yield modeling and we have to say that some of our models are really starting to like what they're seeing so we don't think we're going to have a major corn problem in Brazil.
Todd Gleason: 23:22Hey, thank you much Mike.
Mike Tannura: 23:24Yeah, thanks HUD.
Todd Gleason: 23:25That's Mike Tenure. He's the president and CEO of tStormWeather, that's tStorm.net online. You've been listening, of course, to the closing market report on this Thursday afternoon. It came to you from Illinois Public Media online on demand at willag.0rg. I'm extensions, Todd Gleason.