Sep 01 | Closing Market Report

Todd Gleason: 00:11

I'm Todd Gleason for University of Illinois Extension with a history of Labor Day in The United States. It's adapted from a story found on the United States Embassy to Sweden's website. 11 year old Peter Maguire sold papers on the streets in New York City. He shined shoes and cleaned stores and later ran errands. It was 1863, and his father, a poor Irish immigrant, had just enlisted to fight in the Civil War.

Todd Gleason: 00:37

Peter had to help support his mother and six brothers and sisters. Many settled in New York City in the nineteenth century. They found that living conditions were not as wonderful as they had dreamed. Often, were six families crowded into a house made for one. Thousands of children had to go to work.

Todd Gleason: 00:54

Working conditions were even worse. Immigrant men, women, and children worked in factories for ten to twelve hours a day, stopping only for a short time to eat. They came to work even if they were tired or sick because if they didn't, they might be fired. Thousands of people were waiting to take their places. When Peter was 17, he began an apprenticeship and a piano shop.

Todd Gleason: 01:16

This job was better than his others, where he was learning to trade, but he still worked long hours with low pay. At night, he went to meetings, classes, economics, and social issues of the day. One of the main issues of concern pertained to labor conditions. Workers were tired of long hours, low pay, and uncertain jobs. They spoke of organizing themselves into a union of laborers to improve their working conditions.

Todd Gleason: 01:39

In the 1872, Peter Maguire and 100,000 workers went on strike and marched through the streets of New York City demanding a decrease in the long working day. This event convinced Peter that an organized labor movement was important for the future of workers' rights. He spent the next year speaking to crowds of workers and unemployed people, lobbying the city government for jobs and relief money. It wasn't an easy road for Peter Maguire. He became known as a disturber of the public peace.

Todd Gleason: 02:11

The city government ignored his demands. Peter himself could not find a job in his trade. He began to travel up and down the East Coast to speak to laborers about unionizing. In 1881, he moved to St. Louis, Missouri and began to organize carpenters there.

Todd Gleason: 02:27

He organized a convention of carpenters in Chicago, and it was there that a National Union of Carpenters was founded. He became the General Secretary of the United Brotherhood of Carpenters and Joiners of America. The idea of organizing workers according to their trade spread around the country. Factory workers, dockworkers, and toolmakers all began to demand and get their rights to an eight hour workday, a secure job, and a future in their trades. A Peter Maguire and laborers in other cities planned a holiday for workers on the first Monday in September, halfway between Independence Day and Thanksgiving Day.

Todd Gleason: 03:02

On 09/05/1882, the first Labor Day Parade was held in New York City. For University of Illinois Extension, I'm Todd Gleeson.

announce: 03:14

Todd Gleason's services are made available to WILL by University of Illinois Extension.

Todd Gleason: 03:19

The following was recorded last week at the Farm Progress Show in Decatur. Well, as we move into the noon hour, welcome to the University of Illinois tent here on the Farm Progress Show site. I'm extension's Todd Gleason, farm broadcaster on WILL AM five eighty. More likely, you can pick us up as a podcast anytime, anywhere at willag.0rg. We're going to talk with some folks from the American Soybean Association today.

Todd Gleason: 03:48

I'd say they're all in from St. Louis because that's where it is headquartered. However, you probably know as well as I do that leadership tends to be farmers, always is farmers, and they are spread across the nation. So we have both the president and the vice president of the American Soybean Association with us today. The president is Caleb Braglin.

Todd Gleason: 04:10

Thank you for being with us, Caleb. And then, of course, we have the vice president, Scott Metzger with us, and the CEO, Steve Cinsky, is with us as well. I think I'll start with the two of you, and discuss maybe a little bit about your farms, where you farm, how you became involved in leadership in a farm organization. Caleb, because you're president, let's start with you.

Caleb Ragland: 04:37

Alright. Well, thanks, Todd. I farm in Central Kentucky, about an hour south of Louisville in Larue County, which is home of Abraham Lincoln, which is something we have in common with Boston, Illinois. He was born about six miles north of our farm farm with my wife, Leanne and our three sons, Charlie Corey and Carter, who they're all here have enjoyed the proven grounds today and have been taking in the show. So they range from 15 to ten and eight.

Caleb Ragland: 05:12

So a lot of fun. Got hopefully some future farmers coming along.

Todd Gleason: 05:16

I bet you do. And then, Scott Metzger, where are you from and what's your farm like?

Scott Metzger: 05:22

Thank you, Todd. Yeah. Myself, my family, we we farm South Central Ohio. We're about forty minutes straight south of Columbus. Soybeans, corn, double crop beans.

Scott Metzger: 05:34

So we do have have three children. The youngest, she's 14, and the oldest is 23. So they and then I've got and then the the ones are seniors, so they they keep me busy.

Todd Gleason: 05:45

And then Steve Cinsky is the CEO. Can you tell me about your background, please?

Steve Censky: 05:50

Sure, Todd. Great to be with you here today. I grew up on a farm in Southwestern Minnesota, soybeans, corn, diversified livestock. But I've spent my career working in public policy space, both up in congress working for a US Senator from South Dakota, have served at the Department of Agriculture on three different occasions, most recently as deputy secretary of agriculture in the first Trump administration, but have been with the American Soybean Association a long time as well as their CEO, both before my stint going into USDA as well as afterwards.

Todd Gleason: 06:31

I'd like to start, and I don't know which of you. I think probably Caleb, but priorities for the saving association as it relates to policies at this point are what? Right

Caleb Ragland: 06:45

now, top of mind on policy is trade. We're obviously in a very difficult spot, with China right now. They're 25% of US soybean demand. And, right now, we have zero sales on the books, due to this trade war we're in. And, we are working tirelessly both as farmer leaders and also our wonderful staff, to convey the message of how important trade is for our soybean farm families across this country.

Caleb Ragland: 07:21

But trade is top of mind. We're also working on regulatory issues, biofuels, tax law, you name it. There's we have a whole lot of top issues, but trade is certainly top of mind at the moment.

Todd Gleason: 07:36

Now I have to ask both of you about where you think your soybeans go based on your locations. If you have a processor, I'm going to say Ohio may go to the Southwest as opposed to out of the country.

Scott Metzger: 07:50

Yeah. Yeah. So currently yeah. Right now, most of our beans go to the Southeast

Todd Gleason: 07:54

Your Southeast time. Sorry.

Scott Metzger: 07:55

Yes. And get crushed. But, this upcoming year, we'll have our, second, plant come in. Louie Dreyfus is building a plant, kind of North Central Ohio. And actually, when it comes up and is fully under production, about 85% of the beans are actually gonna stay in state now and will get crushed in state between that between that plant and the other soy, crushing plant we have in the kinda Northwest side of the the state.

Todd Gleason: 08:22

Louis Dreyfus crushing mostly for oil and biodiesel?

Scott Metzger: 08:26

Uh-huh. Yep.

Todd Gleason: 08:27

Or will they be looking for renewable diesel?

Scott Metzger: 08:30

No. Well, both. Both. Yeah. And then But probably biodiesel.

Scott Metzger: 08:34

Yeah. And then then and then a meal out of the two. But, yeah, we're we're our our state will it'll be it'll change a lot over the next couple years with that plant coming on just and the amount of beans that will need that'll be staying in the state versus stuff that's been normally been going out.

Todd Gleason: 08:51

And to be honest with you, I think you're far enough south, but maybe you ship to the Ohio River or to the Mississippi, but I'm thinking the Ohio.

Caleb Ragland: 09:00

Yes. On my farm personally, beans that go to crush, would normally go to Cargill in Owensboro, Kentucky, home, Ohio, not too far from where it dumps into Mississippi. And, they also have a biodiesel plant there and do do a big crush. They also float some on down the river as well. But that's been a very good market for a long time for our area.

Caleb Ragland: 09:26

And me personally on my farm, we do some seed production as well. But we enjoy a very good basis most of the time due to that crush facility that it's about a 100 miles west of where I farm. Trucking is a big part of where I farm, about part of the world.

Todd Gleason: 09:43

It is a long way to truck, but worth it if the basis is correct.

Caleb Ragland: 09:47

That's right.

Todd Gleason: 09:48

And because your when is your harvest season? It must be fairly early, I would think.

Caleb Ragland: 09:53

Yes. On my farm, we didn't get into that, where soybeans, corn, and winter wheat. Every soybean I grow is double crop, which is a bit unique. But corn shelling has started in our area. I hope to shell corn next week.

Caleb Ragland: 10:08

And, there's been a trend in recent years to, plant some soybeans first. The guys are growing full season. And there are soybeans being combined an hour south of me now, and, a lot of them as you get down into Tennessee, you know, farther. But, soybean harvest is coming in September as you get my area and south more and more now. And then a lot of people shell their corn after.

Caleb Ragland: 10:33

But we we always on my farm get our corn first because we're no telling our wheat right back into the cornstalks October. So from about first September through the November, we are just nonstop because we're shelling corn, planting wheat, and then all of our double crop soybeans harvest in late October, early November normally.

Todd Gleason: 10:54

I'm still setting the stage for the conversation I wanna have, but this tells me that you're probably have good basis for both your corn, possibly early season shipments, and for your soybeans too, and that you are going out most mostly export. I'm not sure about your corn, but mostly export probably for both crops, I would think. And well protected because of where you are located in The United States logistically.

Caleb Ragland: 11:23

Yes. Logistics is a big part of farming for us. Not anything we produce gets hauled at least a 100 miles. We do have some markets to the east of some, brown water Kentucky's famous for that that that helps some of our some of our producers that obtain contracts. On my farm, I don't.

Caleb Ragland: 11:41

There's a there's a lot of farm of corn that is shipped into poultry markets in the Deep South as well. So we load some rail and so forth. So it's kind of a unique area, but most of the corn ends up leaving the state.

Todd Gleason: 11:52

I might have been on the Bourbon Trail once in Frankfort and watched corn being dumped there and into a small pit, and was just coming out of the field at that point. So good stuff for you.

Caleb Ragland: 12:06

Yep.

Todd Gleason: 12:06

Good stuff for you. Okay. So you're to the Southeast, probably to the poultry or pork producers in that area. How well do you think your market is protected from unlike here Yeah. And certainly unlike your, your farmer friends that live in North Dakota.

Todd Gleason: 12:26

Right. How well is your market protected from the trade dispute that's taking place at the moment?

Scott Metzger: 12:33

You know, it's it's it's interesting. We've talking about this a bunch in one of our group text and, you know, normally a basis in our area around this time going into fall harvest for for beans and corn both it's you know, corn you'll be in that $0.20 range and beans a lot of time it's 30 for fall delivery stuff, but it just about is double that right now just in our area with it. And that's, you know, even even this summer, we've got a local ethanol plant that we haul to. And, you know, a lot of times it's not uncommon for it to be $40.50, 60¢ over, you know, the best it's been much this summer has been about ten or fifteen. So it is affecting it.

Todd Gleason: 13:15

And your farmer friends in the Dakotas, North Dakota particularly are probably telling you about a buck 50 or a

Scott Metzger: 13:22

dollar 60. One guy that's our chairman, Josh Gackle. He's I know Josh. Yeah. At his at his local elevator.

Scott Metzger: 13:30

It's right now the basis on beans is a dollar 35. I mean, that's just that's that's that's that's hard for us from where we're at even to to believe.

Todd Gleason: 13:40

I've been on the gackle farm.

Scott Metzger: 13:41

We have too.

Todd Gleason: 13:42

Yeah. So yeah. Yeah. I've been on the Gackle Farm talking about barley at that point.

Caleb Ragland: 13:46

Yeah.

Todd Gleason: 13:47

However, ask him at some point if he goes back ten years Mhmm. What his bases used to be. Yeah. And he's gonna tell you a number that sounds like the number you just got.

Scott Metzger: 14:02

Yeah. Right.

Todd Gleason: 14:02

Right? So it has changed because over that ten year period, China developed such a big import of soybeans, not only from The United States, but from Brazil as well.

Scott Metzger: 14:15

Correct. Yeah.

Todd Gleason: 14:16

Yeah. Which brings me to our export market and the kinds of things that really need to happen. And I maybe we can talk a little bit about that with you, Steve, to begin with, about how the Brazilians coming into the marketplace, becoming the world's number one producer of soybeans changed, The United States position on the global export market, and what the American Soybean Association does to talk about quantity and quality and reliability and those sorts of things.

Steve Censky: 14:49

Yeah. We we certainly have seen a Brazilian production greatly expand. It has just really come up in terms of production over the years. You know? And part of that has been facilitated, unfortunately, by some bad trade policy decisions that have been made by The United States.

Steve Censky: 15:09

I mean, obviously, people know that, it started, when, you know, we had great expansion to serve the Japanese market was really when Brazil got started in soybean production after we put embargoes on and limited our exports under the Nixon administration. And then, of course, we also saw a lot of expansion that happened in just recently in our twenty eighteen trade war with China. That was a real incentive for them to not only expand their production like they normally have been doing along with increasing world demand. They were they were adding acreage. They were clearing land, but it really provided an extra incentive for them to serve that China market in the last trade war when we were US soybeans were shut out of that market.

Steve Censky: 16:02

And, frankly, that's what we're beginning to see right now again, and that's the fear about the long term damage that these kinds of trade policies will have. In that, once Brazil brings that land into production, they're going to continue to produce on that land. Not only soybeans, but they're gonna be planting corn too as their winter crop, their safrinha crop. And that's gonna continue to haunt US farmers for years and even decades into the future. And so that's why we're really have been appealing to the Trump administration to prioritize soybeans and get a deal with China on soybeans to put it up there at the top of the list along with jet airplanes and critical minerals and other things like that because, the long term consequences for US soybean farmers and agriculture overall are gonna be pretty devastating.

Steve Censky: 16:59

Is the administration receptive? Well, we just really, you know, we put out a a mayday call, a distress call last week, and we're certainly hoping that they will heed that. And we have to keep the pressure on.

Todd Gleason: 17:15

Yeah. Let me ask that big about that Mayday call because the the Trump administration and president Trump famously said, if he wants to be in a trade war, I'll just pay my farmers in his first my soybean farmers, I think, was the exact quote. And the MFPs came out of that, but that's not really what you want. And that's not what the May Day call was about.

Steve Censky: 17:40

No. No. It was very much that we want markets, and we want the China market because it is such a big import market for US soybean farmers. And farmers want to receive their their money from the marketplace, not from the government check. And the fact of the matter is that China is such a large market, it simply can't be replaced by other markets around the world.

Steve Censky: 18:04

China imports more soybeans than the rest of the world combined. So think about that. You take all the other countries that are importing soybeans. They don't import as many soybeans as China does. And so when you take China out of the equation for US soybean farmers, if we're not able to sell there because of retaliatory duties of 20% that price our soybeans 20% above South American soybeans, they're not gonna be buying from us.

Steve Censky: 18:35

And that has a lot the long term consequences again. Yes. Farmers can receive a payment, market facilitation payment, and that may help try to keep them afloat or stem the blood loss, but it doesn't restore the market, and Brazil still expands.

Todd Gleason: 18:54

So, Caleb, I was thinking about this, and this morning, I had the ag economist on, Nick Paulson, happens to be sitting here, who made a comment that that when something like it's much easier to convince somebody to buy your product than it is to convince somebody who stopped buying your product to start buying your product again. You have to do both at some point. The administration's gonna work with China, but that means there should be other nations that might be available, but they won't make up quite likely for what what the total losses are.

Caleb Ragland: 19:32

That's right. That what that's what makes China both so important and so complicated. Obviously, there's numerous other geopolitical issues, but we had a customer that was so dedicated before the first trade war. Every third row of soybeans went to China, one out of three rows. Then we had that trade war, and we have never got back to that level, which backs up your point.

Caleb Ragland: 19:59

Last year, we were around 25% of US production, which would be one out of four rows. So we went from one out of three down to one out of four. What's the damage gonna be this time even when we get things solved is our concern Yeah. Because we've proven that due to policy that we aren't dependable, and they have diversified away from us. The fact is, as an industry, we're constantly looking for opportunities to diversify our risk, to export to different countries, new uses, domestic biofuel use.

Caleb Ragland: 20:38

There's lots of things, but we don't snap our finger and replace a 25% hole that's currently in our market. And that's why we're facing such challenging economic conditions right now is because we've got that gaping hole that we can't just stick our thumb in and fix. You don't fix that with a, with the MFP payment. We need the market. And we also need some of these exciting things that are coming down the line, such as increase in RVOs that can help, find continuous research that's going on, finding new uses.

Caleb Ragland: 21:10

We have this soy based foam they're using, I think, for firefighting, used 12,000,000 bushel last year. All these little things take time. Our other export customers, which are wonderful, they're very small compared to China. So they're they're the elephant in the room. We must find a way to work with them, to avoid economic disaster in soybean country.

Todd Gleason: 21:34

And then Steve Censke as CEO, as you think about the marketplace, and you've been at this long enough to understand, I think, the difference between a a internal or domestic marketplace without an export market, and one that is only internal. I mean, it it just doesn't work all that well, and it and it sort of spirals down. It certainly does.

Steve Censky: 22:01

And, you know, today, we're exporting over 50% of our crop is exported overseas. And while we want to grow the domestic market, and there is great opportunity for growth here, whether it's through our livestock industry to produce meat, to, either consume domestically, but that means exports as well to export to the rest of the world, or through biofuels, which is a great opportunity. The fact of the matter is that 96% of the world's population lives outside of The United States. And if we want to have growing demand, we have to be able to serve that out that market that's outside of The United States.

Todd Gleason: 22:43

Caleb Ragland is the president of the Soybean Association. Vice president is Scott Metzger, and the CEO of the American Soybean Association is Steve Cinsky. We appreciate you all joining us for the day.

Caleb Ragland: 22:57

Thank you very much. Thank you. Enjoyed it.