- Has the US Crop Safety Net Become Excessive
- Mark Russo, EverStream.ai
From the Land Grant University in Urbana Champaign, Illinois. This is the closing market report. It's the February 2026. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Kurt Kimmel of agmarket.net out of Normal, Illinois.
Todd Gleason: 00:15We'll discuss the agricultural weather forecast with Mark Russo. He's at Everstream Analytics. And along the way, we'll take up a couple of things, the news for the day, as well as a brand new article from the PharmDoc team about ad hoc payments, as well as the ARC and PLC programs and how they've been bumping into each other over the last several years. And I'll remind you to pick up your tickets to the The All Day Ag Outlook. It's at the Beef House on Tuesday, March 3.
Todd Gleason: 00:45That's not one, not two, but just three weeks away now. So buy your tickets today at willag.org. Todd Gleason's services are made available to WILL by University of Illinois Extension. Just a quick note about the All Day Ag Outlook. It is our thirty sixth annual event.
Todd Gleason: 01:04You can join the analysts from WILL, the PharmDoc team for the day. We'll cover the basics this year, including markets, weather, weeds, trade, competition, land values, crop insurance decisions, and so much. More details are online again at willag.org. We'll kick things off with Eric Snodgrass. Joe Jansen will be there to talk about the fundamentals of the grain market.
Todd Gleason: 01:27Joanna Clousey, who is now with Purdue University, will be in again to talk about South America. Ellen Deirden, Greg Johnson, and Chip Nellinger will be on our soybean panel. Kurt Kimmel, who you'll hear in a moment, along with Matt Bennett, Brian Stark, and Mike Suslow on the corn panel. Aaron Hager will be in to discuss weeds and the issues you most assuredly will have this year with them in your fields, and then we'll take up the value of farmland with Bruce Sherick. Nick Paulson will be there to talk about budgets, and Gary Schnicki will have some information on your crop insurance decisions.
Todd Gleason: 02:00That's all in the March, so there will be plenty of time to make new or different decisions by the time you get to the middle of the month. It's important to get yourself registered today for the All Day Outlook. Do that online. The cost is just $40 at willag.org. Now let's get an update from the settlement prices at the CME Group in Chicago.
Todd Gleason: 02:23March corn for the day at $4.28 and 3 quarters, a penny and a half lower. The May down one and three quarters. It settled at $4.37. And December corn, $4.57 and a quarter, a half cent lower. March soybeans down four and a half at eleven dollars ten and three quarters.
Todd Gleason: 02:38The May at $11.25, three and three quarters lower. And November soybeans, new crop at $10.95 and 3 quarters, up a penny and 3 quarters for the day. Bean meal futures, $5.80 lower. The bean oil, up a dollar 36. Wheat futures, a penny lower at $5.28 and 3 quarters in the March.
Todd Gleason: 02:56And the July or rather the March, for the hard red down two and a half at $5.28 and 3 quarters of a cent as well. Live cattle futures at $238.20, 95¢ higher. Feeders at $3.67 45, two and a half higher, and lean hogs for a 100 pounds down a dollar 22 and a half at $96.72 and a half cents. Crude oil, $64.36 a barrel, up 81¢. Diesel fuel around three tenths or rather three hundredths of a cent higher.
Todd Gleason: 03:25It's at two forty one and six tenths, and gasoline at a dollar 98 and a half. That's up three and two tenths of a cent for the day. Now joining us to take a look at this marketplace is Kurt Kimmel. He is with agmarket.net. Hi, Kurt.
Todd Gleason: 03:39Thanks for being with us. Been a couple of weeks since you and I talked. How have you been?
Curt Kimmel: 03:43Well, we're hanging in there, surviving. The market volatility is starting to pick up a little bit. We we've been trading a little silver and gold, which has been challenging through here. That's where, most of the interest has laid, but, excited to, get going here in the New Year here, and I think we're gonna have some good markets in front of us, Todd.
Todd Gleason: 04:07Gold up a $116 for the day. Silver up $6 and 15 and a half cents. You think the markets are gonna be good? Do you see better, markets for corn and soybeans going forward?
Curt Kimmel: 04:18Oh, yeah. This is giddy up mode here, trademark Zwicker, but it is the year of the horse and they're starting to get some more notary here. Not only is the year of the horse but the fire horse, so, this is a sixty year cycle, so hopefully we'll have some optimism. But the gray market's trying to continue to climb the wall of worry, for the most part. We'll have some important news tomorrow.
Curt Kimmel: 04:42We'll have the monthly supply demand report. The ag market team as far as The U. S. Numbers are just virtually unchanged from last month on the carry out. It's kind of hard to really take a stand with the moving, targets we're seeing from the reports.
Curt Kimmel: 04:58For an example, bean carry out, the range on bean carry out is anywhere as low as two sixty five million to as high as three ninety two million. So it might be safe to say the number will come in somewhere in between there. But most of the interest will be in the South American crop. Basically we're leaning towards just a slightly smaller Argentina crop due to their dry weather even though the forecast is starting to cooperate now for them. But the Brazilian crop maybe just slightly larger, they've had just a little bit more of a favorable weather pattern to work with.
Curt Kimmel: 05:35So that'll be the news, tomorrow morning actually at 11AM and see what type of surprises we have. The world numbers virtually just about unchanged. Other than that, we're still trying to get a handle on the talk last week of, President Trump and the President of China, you know, talking supposedly about some more and more bean business. We did see a sale this morning of 264,000 tons but there's ideas that was just a swap for Geneva to The US just to get some more higher numbers here in The US. I'll have to visit with the commercial guys this morning and get a little bit more detail on that.
Curt Kimmel: 06:16But there is actually a little bit of old crop bean business around. As far as the weekly shipments go, there's still so much strong so we're shipping out what we sold here so we need to see some more sales come to be on the books and later on here fairly quick we need to see these sales be shipped and not cancelled Todd.
Todd Gleason: 06:37How are the exports for corn holding in?
Curt Kimmel: 06:39Yeah. They're still, very, strong. We've always been at the upper end. Here, today, last week, we shipped out 1,300,000 metric tons. That's about 51, 52,000,000 bushels, and that was above trade expectations.
Curt Kimmel: 06:55Whereas beans, you know, continue to struggle here so we need to keep an eye, but corn exports, corn ethanol demand, corn usage just remains really, really strong. It's kind of offset what we're seeing to come to town here as far as guys moving corn here to make get caught up before they go to the field here this spring.
Todd Gleason: 07:14Are farmers feeling better today than they were two weeks ago, or are they still in that mindset that we've got some problems in the agricultural
Curt Kimmel: 07:23Yes, no. Know, guys are just kind of cautious through here. Things are tight. We had the Ag Market Conference in Nashville here over a week ago and had a couple of lender meetings take place and, things are just going to be tight. So it's going be very, very important here to, have some good, production here this year, but we'd like to have some higher prices.
Curt Kimmel: 07:49So it's going to come down to your marketing here and our best recommendation is try to stay flexible through here. You gotta move some cash green to pay some bills, but yet you gotta have some opportunity to play a little catch up here if the market allows some price strings here as we go through the growing season.
Todd Gleason: 08:06On Argentina, the president making an option for them to bring in more beef from Argentina to The United States, the tariff quota, meaning they allow more in. I'm wondering if that'll have an impact on what we see in the way of domestic usage for feed, do you suppose? Or is it just kinda once it's is it a but what do you suppose will happen in that case? It's not like it's Mexico where it's just gonna go across the border, by rail for fade. This is something that's entirely different.
Curt Kimmel: 08:39Well, administration probably needs to study logistics a little bit in the beef situation on it, but yeah, they want to come by at higher prices here, make things a little bit more affordable. The thing is that Southern Hemisphere importing, you're talking small percentages versus the Mexican situation we have with it. So I think it's minimal. Probably what's more important in the beef complex at the end of this week and starting this week is we're looking at a major plant worker strike taking place. That's a little bit more concerned here.
Curt Kimmel: 09:16But the overall beef numbers is going to be a long term, process in here. The thing is where the trade and the economists got it all wrong is we well, is they got their numbers tight right, but they got the demand still remains strong. People just like go out and have a big old cheeseburger.
Todd Gleason: 09:36Right. So the point there being, it's likely demand is going to continue to keep the, price of beef high no matter what that supply may be, the extra small bit of supply coming in from Argentina might be?
Curt Kimmel: 09:49We feel so. I mean, for years and years and years, we've we talked about the economy and people will not be able to afford, there is that case where they can go to cheaper cuts. We've got pork as an alternative here, we've got chicken as an alternative, but overall beef demand just just just remains strong.
Todd Gleason: 10:10Hey. Thanks much. I appreciate it.
Curt Kimmel: 10:11You bet. Take care, Todd.
Todd Gleason: 10:12You too. Kurt Kimmel is with agmarket.net. In today's agricultural news, we'll start with the ad hoc payments called the Farmer Bridge Assistance Program. Richard Fordyce, USDA Undersecretary for Farm Production and Conservation, says things are looking good to get that help into the hands of producers still this month.
Richard Fordyce: 10:38We've gotten most of the procedural things done in order to get the payments out by the February, and that timeline looks good. I mean, we're very confident we're gonna be able to do that. One way that we're going to deploy this program is gonna be through login.gov, And login.gov is basically a federal government portal. It's not unique to USDA. For example, Veterans Affairs, I think, uses it.
Richard Fordyce: 11:01Internal Revenue Service, I think, uses it to a degree and other federal agencies. But it's simply a portal that folks need to set up an account in.
Todd Gleason: 11:10Fordyce is encouraging producers to create an account at login.gov as soon as possible.
Richard Fordyce: 11:16When your FDA form is available for you to view and to sign, you can do it through the login.gov platform. And so, you know, I'm just urging farmers to take about ten or fifteen minutes, you know, when they've got a little bit of downtime, just go to login.gov and set up an account. I have actually not done it myself yet, but I've been told by folks that have done it, it didn't take very long. It was pretty straightforward. And certainly if you have trouble setting up a login.gov, feel free to call the local Farm Service Agency office.
Richard Fordyce: 11:48I think those folks will be able to help you kind of go through that sign up process or that account, setting that account up process. And so login.gov, we're going to try it on FBA and we're hopeful that it works pretty well for the folks that wanna use it and we're gonna continue to use that platform as we deploy other programs going forward.
Todd Gleason: 12:07Again, that was USDA Undersecretary Richard Fordyce. For more information on how to sign up for a login.gov account, go to farmers.gov/account or just go to login.gov. One of the other places that uses that login is social security. Well, the USDA's Economic Research Service forecasts net farm income, a broad measure of profitability in the agricultural economy, is forecast to drop by seven tenths of a percent to 153,400,000,000 in 2026. When adjusted for inflation, net farm income is projected to decrease about $4,100,000,000 Reuters says that drop comes despite near record government payments, which will make up almost 29% of producers' Bottom line.
Todd Gleason: 12:58Staying with the economics of agriculture, the Modern Ag Alliance has issued a report on the state of the American farmer showing that agriculture is facing one of its most challenging periods in a generation. The report says the economic pressures and activist campaigns against modern agriculture have created conditions where even the most resilient operations are feeling strain. These pressures extend well beyond the farm gate, giving price instability across the economy for the food, fuel, and fiber that depend on agricultural production. The report shows farmers face profitability challenges with only about half of the farmers expected to be profitable in the past year. Farm bankruptcies have seen a 60% year over year increase surpassing the 2024 total by mid twenty twenty five.
Todd Gleason: 13:46And finally today, 40 farm and agricultural groups have launched the Agricultural Coalition for the US Mexico Canada Agreement, underscoring the deal's vital role as an economic engine for The US farm economy. The groups are calling for its renewal with targeted improvements. As part of the launch, the group unveiled a new website and kicked off a new ad campaign, all of which is designed to promote the benefits afforded to The US ag sector as the administration approaches the mandatory 2026 review. USMCA is one of the president's signature achievements and has significantly propelled the ag economy, said Brian Goodman, a spokesperson for the new group. He's with the National Corn Growers Association.
Todd Gleason: 14:28He says, we're not saying it's perfect as some changes are warranted, but we're saying it's a paramount importance to farmers that all three countries renew the agreement. The agreement has significantly increased US agricultural exports to Canada and Mexico and provided more certainty between the three nations. That's a look on today's agricultural news. You're listening to the closing market report from Illinois Public Media on this Monday afternoon. Do visit our website, willag.org, where today you can sign up for the All Day Ag Outlook.
Todd Gleason: 15:12It'll be in Covington, Indiana, Tuesday, March. We'll cover the basics this year, including markets, weather, weeds, trade, competition, land values, and crop insurance decisions. The cost is just $40, includes your morning cinnamon roll and coffee from the beef house and the Beef House lunch. The PharmDoc team and I invite you to join us Tuesday, March 3 at the Beef House in Covington, Indiana. Your tickets can be purchased at willag.org or at pharmdocdaily.illinois.edu.
Todd Gleason: 15:45Now up next, a PharmDoc Daily article. Has The US crop safety net become excessive? Argue in a new article posted to the PharmDoc Daily website that federal crop safety net programs may be paying out too much money at the wrong time. The article is written by Ohio State's Carl Zuloff, Virginia Tech's David Orden, and Gary Schnitke from the University of Illinois. You may read it today on the Farm Doc Daily website or at willag.org.
Todd Gleason: 16:19It's called Has The US Crop Safety Net Become Excessive? They write that the current crop safety net for barley, corn, cotton, oats, peanuts, rice, sorghum, soybeans, and wheat crops may be too large. These are the crops for which USDAERS computes an economic cost of production or COP. Since 2000, the annual market net return on average fell 4.2% per year below economic cost of production for these nine crops. However, government payments averaged three times that amount or 12.7% per year of cost.
Todd Gleason: 16:55Again, that's more than triple the level needed to cover the losses. We'll skip over much of the detail in the article and go straight to the policy implications. No businesses like losses, but losses are important to incentivize efficiency in a market economy at the individual firm or farm level and at the collective sector level, the three right. So far in the twenty first century, The US crop safety net policy has on average more than eliminated crop sector loss. Here's the short version of the problem: crop safety net losses, ARC and PLC, are paid out too late and ad hoc payments have been allocated to fill that gap.
Todd Gleason: 17:35The losses, well, they're not exactly losses. They're profits because of the timing of the payments which cause investments that otherwise wouldn't happen. The ag economists say adding a government payment to a double digit market return in the following year is a recipe for excesses, especially when the safety net is already more than covering loss when market return is negative. Here's what that means: A treadmill of ever higher support seems inevitable as safety net payments above loss find their way into input and land prices. So debate badly need on when and how to curtail even eliminate crop safety net payment when market return is positive.
Todd Gleason: 18:15This includes crop insurance subsidies. One option is a sliding scale of insurance premium subsidies and a share of commodity program payment acres tied to market net return. Debate's also needed on what level of average sector loss overall is consistent with a safety net that does not impede needed market adjustments. The provision of additional ad hoc assistance for the twenty twenty five crops, for instance, is a critical test of whether The US and US crop agriculture are willing to allow crop sector loss to exist even for a year, consistent with being a competitive enterprise. Finally, Zuloff Orden and Schnicki write that recent ad hoc assistance has occurred shortly after harvest, suggesting this is when the policy community believes payments should occur.
Todd Gleason: 19:01In contrast, commodity program payments, ARC and PLC, are not made until October of the next calendar year. A payment may thus occur when market return is higher, even positive, exacerbating rather than easing crop economics. They say moving commodity program payments to harvest can be easily accomplished by using cash price at harvest rather than market year average price. Crop insurance payments too, including from area insurance, need to be made no later than January to better align with assistance needed. The number crunchers say making these changes will also improve the information about other safety net program payments when determining ad hoc assistance.
Todd Gleason: 19:44You're listening to the closing market report on a Monday afternoon. Our theme music is written perform produced in courtesy of Logan County, Illinois farmer, Tim Gleason. Let's check-in on the global growing regions across the planet with Mark Russo now. He is with Everestream Analytics. Hi, Mark.
Todd Gleason: 20:07Thanks for being with us. I wanna talk about this little, thaw we're having at the moment, just at the beginning of it. Can you tell me what it means across the Midwest? And more importantly, is there any rainfall that comes along with this?
Mark Russo: 20:20Well, Todd, the pattern across not only the Midwest, but across much of the middle of the country, including the plains as well, being seasonably warm here all of this week, basically, all of next week as well. So a marked change here to the exceptionally cold, even record cold pattern here of recent weeks. With the much warmer temperatures due to mild Pacific air that will be streaming in, we will also see some moisture streaming in from the Pacific as well, and that will increase precipitation prospects across the Midwest, especially the Southern half of the Midwest and down into the Delta. A little bit of that precip will fall across the plains hard red belt, but one area though that does look to miss out here is the Northwestern sections of the belt.
Todd Gleason: 21:10And then if you turn your attention to South America, what do you find?
Mark Russo: 21:15Across South America, we continue to see favorable weather across the vast majority of summer crop acreage. Now the past few weeks have seen a decline in soil moisture and conditions for summer crops across Argentina due to some below normal rainfall and above normal temperature patterns, but that's now in the process of changing. The pattern now is featuring more normal rainfall. And along with that too, seasonal temperatures that will help stabilize crop conditions and ultimately here just kind of keep things in in in good shape without any kind of significant items of note.
Todd Gleason: 21:53Hey. Thank you much. I appreciate it. Look forward to talking with you again next week.
Mark Russo: 21:56You're welcome, Todd. Thanks for having me.
Todd Gleason: 21:58Mark Russo is with Everstream Analytics joined us on this Monday edition of the closing market report that came to you from Illinois Public Media. It's public radio for the farming world online on demand at willag.org, willag.org, where you'll find information from the crop scientists, the ag economist, the animal scientists at the University of Illinois. With today, a way to register for the all day ag outlook. It's in just three weeks on a day, on Tuesday, March. Don't forget to get your tickets right now.
Todd Gleason: 22:30The cost is just $40, and that includes your morning coffee and rolls from the beef house plus the beef house lunch. That's worth the cost there. And you'll have the farm doc team, the ag economist, along with weed scientist Aaron Hager there for the day. We'll do land values, crop insurance, so much more. Panel discussions on the price of corn and soybeans going forward.
Todd Gleason: 22:51And Eric Snodgrass will join us too to kick off things, taking a look at the weather for the growing season in The United States. At the All Day Ag Outlook, it's Tuesday, March. The cost is $40 Tickets are available online today at willag.org. I'm Todd Gleason.