1 00:00:13,760 --> 00:00:17,360 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:17,440 --> 00:00:19,880 Speaker 1: My name is Mike Reagan. I'm a senior editor at 3 00:00:19,880 --> 00:00:22,880 Speaker 1: Bloomberg and on the Data High Across Acid Reporter with 4 00:00:22,880 --> 00:00:27,600 Speaker 1: Bloomberg and this week, well, as the name implies, on 5 00:00:27,680 --> 00:00:30,680 Speaker 1: this show, we like to discuss what's going up in markets. 6 00:00:31,360 --> 00:00:33,640 Speaker 1: And while the stock and bond markets haven't given us 7 00:00:33,680 --> 00:00:37,480 Speaker 1: much to talk about, here's one thing that has lean hogs. 8 00:00:38,120 --> 00:00:40,080 Speaker 1: If you want to buy a futures contract on the 9 00:00:40,159 --> 00:00:44,280 Speaker 1: Chicago Mercantile Exchange that represents forty thou pounds of cork, 10 00:00:44,760 --> 00:00:47,959 Speaker 1: it'll set you back about thirty six thousand dollars seven 11 00:00:48,159 --> 00:00:51,120 Speaker 1: and forty dollars at the moment. That's up about twelve 12 00:00:51,640 --> 00:00:54,680 Speaker 1: this year, and it's hardly the only farm product that's 13 00:00:54,800 --> 00:00:58,440 Speaker 1: rallying this year. Futures on corn and soybeans are up 14 00:00:58,480 --> 00:01:01,680 Speaker 1: about the same and well, it's a fascinating market story. 15 00:01:01,840 --> 00:01:05,360 Speaker 1: It also speaks to how those lingering supply chain problems 16 00:01:05,400 --> 00:01:08,119 Speaker 1: and the were in Ukraine are coming home to roost 17 00:01:08,200 --> 00:01:11,679 Speaker 1: on the farm and posing risks to the global food supply. 18 00:01:12,319 --> 00:01:14,560 Speaker 1: We'll get into it with someone who is an expert 19 00:01:14,640 --> 00:01:17,479 Speaker 1: on how these markets work. After all, he is a 20 00:01:17,520 --> 00:01:20,920 Speaker 1: farmer vill Donna. He is. Indeed, he grows all these 21 00:01:21,000 --> 00:01:25,640 Speaker 1: things I believe, hogs, corn and Swimming's very excited I'm 22 00:01:25,640 --> 00:01:28,440 Speaker 1: on the show, But Philpana, I'm also very excited to 23 00:01:28,480 --> 00:01:33,080 Speaker 1: hear about yet another glamorous vacation of yours coming up. 24 00:01:34,160 --> 00:01:36,440 Speaker 1: You love to call me out. I don't know how 25 00:01:36,480 --> 00:01:38,760 Speaker 1: you do it. How where are you jetting off to 26 00:01:38,840 --> 00:01:41,880 Speaker 1: this time? I'm going to Spain? So so next week 27 00:01:41,920 --> 00:01:45,039 Speaker 1: I believe you're flying solo. I won't be around next week. 28 00:01:45,920 --> 00:01:49,160 Speaker 1: Uh to help you with the podcasts. How you'll survive? 29 00:01:49,280 --> 00:01:52,360 Speaker 1: But who is going to roast me mercilessly? I'll have 30 00:01:52,440 --> 00:01:54,240 Speaker 1: to find somebody who can do it as well as 31 00:01:54,760 --> 00:01:57,240 Speaker 1: as well as I do it. Called in. But I'm 32 00:01:57,240 --> 00:02:01,040 Speaker 1: also excited for your trip because this guest this week 33 00:02:01,240 --> 00:02:03,680 Speaker 1: has really got me in the mood for some puork. 34 00:02:03,720 --> 00:02:06,800 Speaker 1: I'm very hungry for some some quork products. You can 35 00:02:06,840 --> 00:02:09,760 Speaker 1: have that in Spain. Well, I know, believe me, I know, 36 00:02:09,880 --> 00:02:13,560 Speaker 1: I know you're gonna be eating nothing but coliflower. Don't 37 00:02:13,560 --> 00:02:18,639 Speaker 1: tell I guess I'm vegetarian and complete colliflower flower diet. 38 00:02:18,840 --> 00:02:21,120 Speaker 1: I think I just heard him tell him, Yes, let 39 00:02:21,120 --> 00:02:22,760 Speaker 1: me let me introduce him. I want to bring him in. 40 00:02:22,840 --> 00:02:25,000 Speaker 1: It's it's Brian Duncan. He's the vice president of the 41 00:02:25,040 --> 00:02:28,800 Speaker 1: Illinois Farm Bureau. He's a farmer in northwest Illinois, and 42 00:02:28,840 --> 00:02:31,560 Speaker 1: he also actually is a podcast host. So Brian, thank 43 00:02:31,560 --> 00:02:33,960 Speaker 1: you so much for joining us on the show this week. 44 00:02:34,480 --> 00:02:36,760 Speaker 1: Thanks for having me here Villdonna. And also, I am 45 00:02:36,800 --> 00:02:40,760 Speaker 1: not a vegetarian. I figured I just didn't want you 46 00:02:40,800 --> 00:02:43,560 Speaker 1: to know that. I am all I want fill Donna. 47 00:02:43,720 --> 00:02:47,120 Speaker 1: It's it's called Iberico ham. They sell it like a 48 00:02:47,160 --> 00:02:50,840 Speaker 1: full hogs leg at a time. It's it's cured, it's delicious. 49 00:02:51,160 --> 00:02:54,919 Speaker 1: I'm not asking for a full forty pound futures contract 50 00:02:54,919 --> 00:02:58,120 Speaker 1: of hand, just pounds, just one leg. You could fit 51 00:02:58,200 --> 00:03:02,120 Speaker 1: it into your carry on on the plane trying. Uh no, 52 00:03:02,400 --> 00:03:05,040 Speaker 1: I'm sorry, but we are not allowing pork products in 53 00:03:05,080 --> 00:03:09,080 Speaker 1: from other countries because of the risk of of a 54 00:03:09,080 --> 00:03:12,600 Speaker 1: foot and mouth disease and so an African swine fever. 55 00:03:12,720 --> 00:03:15,800 Speaker 1: So I'm sorry, Mike. You would have to travel to 56 00:03:16,040 --> 00:03:20,799 Speaker 1: Europe to enjoy that that premium product, even the cured, cured, 57 00:03:21,160 --> 00:03:24,120 Speaker 1: cured and cooked either one. You will not get past 58 00:03:24,160 --> 00:03:28,000 Speaker 1: the Beagle brigade at the airport. That's good to know. 59 00:03:28,800 --> 00:03:31,679 Speaker 1: That's what it's called. That's what it's called. What that 60 00:03:31,880 --> 00:03:35,840 Speaker 1: that the dogs that sniff customs, that's that's what's keeping. 61 00:03:35,920 --> 00:03:39,960 Speaker 1: That's what's keeping our domestic pork production healthy and African 62 00:03:40,000 --> 00:03:43,920 Speaker 1: swine fever free. Well, Dottie, you're gonna have you're gonna 63 00:03:43,920 --> 00:03:46,920 Speaker 1: have to smuggle my hamleg. Then it's gonna be dangerous. 64 00:03:46,960 --> 00:03:50,680 Speaker 1: Are you all smuggle? I'll smuggle, are you yes? But 65 00:03:50,760 --> 00:03:53,480 Speaker 1: so so, Brian, speaking of all of this, I want 66 00:03:53,480 --> 00:03:56,240 Speaker 1: to ask you about exactly this. So you and your 67 00:03:56,240 --> 00:04:00,200 Speaker 1: wife you raise corn, soybeans, sweet pigs, and cattle on 68 00:04:00,240 --> 00:04:03,880 Speaker 1: your farm near Polo, Illinois. So maybe we just start 69 00:04:03,960 --> 00:04:06,240 Speaker 1: out with you telling us about yourself and how things 70 00:04:06,280 --> 00:04:09,880 Speaker 1: are going on the farm today. Sure. Well, again, glad 71 00:04:09,920 --> 00:04:12,280 Speaker 1: to be here and thank you for this opportunity. Yeah. 72 00:04:12,280 --> 00:04:16,159 Speaker 1: I grew up on our family farm. I was fortunate 73 00:04:16,279 --> 00:04:18,680 Speaker 1: enough to marry my high school sweetheart. So we were 74 00:04:18,680 --> 00:04:21,680 Speaker 1: celebrating actually forty years together in thirty three years of 75 00:04:21,720 --> 00:04:25,200 Speaker 1: marriage this year. And uh, we have four children, and 76 00:04:25,279 --> 00:04:28,800 Speaker 1: three of which are also actively involved on our family farm. 77 00:04:28,880 --> 00:04:32,280 Speaker 1: And so it's uh, it's a great lifestyle. It's a 78 00:04:32,560 --> 00:04:34,919 Speaker 1: it's a you know, the hate to sound cliche like 79 00:04:34,920 --> 00:04:37,919 Speaker 1: the movie, but it is a wonderful life and uh 80 00:04:37,960 --> 00:04:41,240 Speaker 1: it's a pretty high calling. I think growing food and 81 00:04:41,480 --> 00:04:45,040 Speaker 1: fuel and fiber for America and for the world, and 82 00:04:45,080 --> 00:04:47,120 Speaker 1: so we take a lot of pride in what we do, 83 00:04:47,200 --> 00:04:49,680 Speaker 1: like all farmers. Uh, yet at the end of the day, 84 00:04:49,680 --> 00:04:53,599 Speaker 1: we're a family business. That's fantastic. I gotta say I 85 00:04:53,640 --> 00:04:56,360 Speaker 1: often had day dreamed about being a farmer. I grew 86 00:04:56,440 --> 00:04:59,040 Speaker 1: up in Pennsylvania, not on our farm, but near farms. 87 00:04:59,440 --> 00:05:01,800 Speaker 1: I'd often day dreamed about being a farmer. But I 88 00:05:01,839 --> 00:05:04,640 Speaker 1: don't know if I can, if I have the fortitude 89 00:05:04,680 --> 00:05:08,120 Speaker 1: of the getting up in the I think I'm meant 90 00:05:08,120 --> 00:05:10,440 Speaker 1: to be an office guy. My features in school would 91 00:05:10,440 --> 00:05:11,960 Speaker 1: a test that I spent an awful lot of time 92 00:05:12,040 --> 00:05:14,320 Speaker 1: daydreaming about being a farmer as well when I was 93 00:05:16,000 --> 00:05:20,159 Speaker 1: living the dream, Mike living the dream Bright, I wanted 94 00:05:20,200 --> 00:05:23,720 Speaker 1: to you know, the listeners of this podcast are very 95 00:05:23,800 --> 00:05:28,159 Speaker 1: much of a financial orientation, investors and traders and that 96 00:05:28,240 --> 00:05:30,600 Speaker 1: sort of thing, so I wanted to tap in a 97 00:05:30,600 --> 00:05:34,280 Speaker 1: little bit into your expertise on the futures market. You know, 98 00:05:34,320 --> 00:05:38,600 Speaker 1: as I said that the futures prices uh on lean, hoggs, corn, 99 00:05:38,680 --> 00:05:42,359 Speaker 1: soybeans all all up tremendously this year. That tremendously, but 100 00:05:42,400 --> 00:05:45,000 Speaker 1: up up a decent amount tremendously when compared to all 101 00:05:45,040 --> 00:05:49,320 Speaker 1: other assets. I'm just kind of curious how a farmer 102 00:05:49,960 --> 00:05:53,400 Speaker 1: like yourself approaches the futures market. You know, we always 103 00:05:53,400 --> 00:05:55,880 Speaker 1: hear that it's a way to sort of hedge what 104 00:05:56,000 --> 00:05:58,160 Speaker 1: your crops are going to do in the coming year, 105 00:05:58,200 --> 00:06:00,440 Speaker 1: But sort of what is your relation ship with the 106 00:06:00,480 --> 00:06:02,880 Speaker 1: futures market? Um? You know, do you deal with a 107 00:06:02,960 --> 00:06:05,720 Speaker 1: broker that sort of thing, and and how does it 108 00:06:05,760 --> 00:06:08,359 Speaker 1: work in your favor or not? Well, I'd say you 109 00:06:08,360 --> 00:06:12,719 Speaker 1: can describe my relationship as solidly love hate and it 110 00:06:12,760 --> 00:06:16,000 Speaker 1: depends on which way the market's going. So yeah, like 111 00:06:16,160 --> 00:06:18,400 Speaker 1: a lot of our most farmers, I employ a bunch 112 00:06:18,440 --> 00:06:21,680 Speaker 1: of different risk management strategies on our farm, and they 113 00:06:21,720 --> 00:06:25,280 Speaker 1: involve hedging with a broker, They involve cash based futures 114 00:06:25,320 --> 00:06:30,320 Speaker 1: contracts with a a packer or a grain merchant. Um. 115 00:06:30,560 --> 00:06:33,920 Speaker 1: We also use some of the government risk management tools, 116 00:06:34,040 --> 00:06:37,760 Speaker 1: the crop insurance or livestock insurance tools that are also 117 00:06:37,839 --> 00:06:42,360 Speaker 1: based off futures markets. So I'm usually using the futures 118 00:06:42,400 --> 00:06:46,520 Speaker 1: markets to manage the risk on my on my crop 119 00:06:46,520 --> 00:06:49,800 Speaker 1: production and on my hogs. Uh as far as I so, 120 00:06:49,960 --> 00:06:54,320 Speaker 1: I do forward selling, forward contracting, and and what I'm 121 00:06:54,360 --> 00:06:57,480 Speaker 1: looking at, Mike is is uh the ability to cover 122 00:06:57,560 --> 00:07:00,960 Speaker 1: costs and allow ourselves a reasonable return. And when we 123 00:07:01,000 --> 00:07:03,800 Speaker 1: see those opportunities, we we certainly do a portion of 124 00:07:03,839 --> 00:07:08,080 Speaker 1: them using using a combination of those risk management tools. 125 00:07:08,600 --> 00:07:11,280 Speaker 1: You know, when you mentioned that that prices are up, 126 00:07:11,400 --> 00:07:14,360 Speaker 1: and they are for agricultural commodities, but that just doesn't 127 00:07:14,400 --> 00:07:17,120 Speaker 1: necessarily mean the profits are up because our costs are 128 00:07:17,200 --> 00:07:18,680 Speaker 1: up as well. You know when you say corn and 129 00:07:18,680 --> 00:07:21,720 Speaker 1: soybeans are are higher, Well, that makes the cost of 130 00:07:21,760 --> 00:07:25,160 Speaker 1: production on the hogs higher. And so we're looking at 131 00:07:25,200 --> 00:07:27,760 Speaker 1: margin and and we're looking at how we can best 132 00:07:27,800 --> 00:07:31,120 Speaker 1: manage that margin and then and then protect that margin 133 00:07:31,440 --> 00:07:35,280 Speaker 1: um out into the future. Yeah right, So I'm I'm 134 00:07:35,320 --> 00:07:37,360 Speaker 1: trying to wrap my head around if I see a 135 00:07:37,440 --> 00:07:39,960 Speaker 1: futures market like this where there are you know, pretty 136 00:07:39,960 --> 00:07:44,720 Speaker 1: good gains in agricultural commodities, who's benefiting from that? Is 137 00:07:44,720 --> 00:07:47,800 Speaker 1: it some farmers, if if they made the right trade, 138 00:07:47,880 --> 00:07:50,840 Speaker 1: or is it mostly speculators hedge funds in the middle 139 00:07:50,920 --> 00:07:53,240 Speaker 1: you know, who are sort of the players in the market, 140 00:07:53,800 --> 00:07:57,000 Speaker 1: uh that that you know, we're are winning are losing 141 00:07:57,000 --> 00:07:59,720 Speaker 1: in an environment like well, the funds have certainly become 142 00:08:00,200 --> 00:08:03,160 Speaker 1: a big driver in these markets, and you certainly want 143 00:08:03,200 --> 00:08:05,160 Speaker 1: to keep an eye on what they're doing if they 144 00:08:05,160 --> 00:08:07,640 Speaker 1: are net long or net short of commodity, and when 145 00:08:07,640 --> 00:08:11,400 Speaker 1: they exit or enter, they can have a pretty dramatic 146 00:08:11,720 --> 00:08:14,920 Speaker 1: impact on the markets because there's not a lot, there's 147 00:08:14,920 --> 00:08:18,840 Speaker 1: not enough money to take the opposite position oftentimes, so 148 00:08:18,920 --> 00:08:21,880 Speaker 1: you'll see them run the market up or down. Hence 149 00:08:21,920 --> 00:08:24,640 Speaker 1: the love or hate relationship that I have with the marketplace. 150 00:08:25,280 --> 00:08:28,880 Speaker 1: Um so yes, it's really Mike, It's it's a combination. 151 00:08:29,120 --> 00:08:31,920 Speaker 1: It could be end users. So when prices go up, 152 00:08:32,000 --> 00:08:35,240 Speaker 1: end users who have locked in their supply benefit because 153 00:08:35,280 --> 00:08:39,439 Speaker 1: they've hedged their risk. Um speculators who have looked at 154 00:08:40,040 --> 00:08:46,400 Speaker 1: geopolitical uh things like weather or war and decided commodities 155 00:08:46,400 --> 00:08:48,360 Speaker 1: were a good investment in the market goes up, and 156 00:08:48,400 --> 00:08:53,280 Speaker 1: certainly producers if they if they've got to handle and 157 00:08:53,320 --> 00:08:54,920 Speaker 1: if they can grow a crop. You know, if you've 158 00:08:54,920 --> 00:08:57,240 Speaker 1: got a drought, it doesn't matter how high the prices 159 00:08:57,280 --> 00:09:00,520 Speaker 1: go if you don't have anything to sell. So in 160 00:09:00,559 --> 00:09:04,439 Speaker 1: generally now, prices going up is a benefit to rural 161 00:09:04,480 --> 00:09:08,280 Speaker 1: America and to farmers. You know, it's just also got 162 00:09:08,320 --> 00:09:11,240 Speaker 1: to be it's more about margin, you know. It's it's 163 00:09:11,280 --> 00:09:15,240 Speaker 1: it's the difference between our cost of production per unit 164 00:09:15,280 --> 00:09:17,120 Speaker 1: and then what that unit is priced at and so 165 00:09:17,400 --> 00:09:21,360 Speaker 1: and so good margins are better than high prices. High 166 00:09:21,360 --> 00:09:23,880 Speaker 1: prices don't necessarily mean good margins, but a lot of 167 00:09:23,920 --> 00:09:27,120 Speaker 1: times they surely do. Does that make any sense to you, Yeah, 168 00:09:27,440 --> 00:09:30,199 Speaker 1: absolutely absolutely. I mean I think that's the same conundrum 169 00:09:30,240 --> 00:09:32,960 Speaker 1: that corporate America is facing, right, you know, uh, sure 170 00:09:32,960 --> 00:09:35,640 Speaker 1: they're selling prices are higher, but their costs are higher too. 171 00:09:35,840 --> 00:09:39,000 Speaker 1: And you know, do you have the pricing power to 172 00:09:39,000 --> 00:09:41,559 Speaker 1: to raise your prices more than your costs? And uh, 173 00:09:41,600 --> 00:09:43,959 Speaker 1: you know not everyone does. So it's it's a that's 174 00:09:43,960 --> 00:09:47,400 Speaker 1: an important point, Mike. Farmers are price takers. We do 175 00:09:47,480 --> 00:09:50,880 Speaker 1: not have pricing power. We are subject to the whims 176 00:09:50,920 --> 00:09:52,679 Speaker 1: of the Board of Trade. The Board of Trade does 177 00:09:52,720 --> 00:09:55,480 Speaker 1: not care what our cost of production is. The futures 178 00:09:55,600 --> 00:09:58,000 Speaker 1: the Mercantel Exchange does not care how much it costs 179 00:09:58,040 --> 00:10:00,480 Speaker 1: me to produce a pound of pork. We are at 180 00:10:00,480 --> 00:10:02,440 Speaker 1: the mercy of the market place, and that's what puts 181 00:10:02,440 --> 00:10:06,439 Speaker 1: farmers in a uniquely disadvantaged position as far as inflation goes. 182 00:10:07,120 --> 00:10:11,040 Speaker 1: We are price takers on both sides. We are subject 183 00:10:11,120 --> 00:10:14,040 Speaker 1: to global fertilizer prices. We do not, as individuals have 184 00:10:14,200 --> 00:10:17,400 Speaker 1: enough market clout to drive a price. So we pay 185 00:10:17,520 --> 00:10:21,120 Speaker 1: what the market offers us on inputs and we take 186 00:10:21,160 --> 00:10:23,200 Speaker 1: what the market gives us on outputs, and so that 187 00:10:23,240 --> 00:10:26,920 Speaker 1: puts us in a very challenging position at times. Yeah, 188 00:10:27,000 --> 00:10:29,720 Speaker 1: So how do you think the average hog farmers doing 189 00:10:29,720 --> 00:10:33,400 Speaker 1: this year? They are they able to protect those margins 190 00:10:33,440 --> 00:10:34,720 Speaker 1: or is it a is it a tough you know? 191 00:10:34,840 --> 00:10:36,560 Speaker 1: I think I think for the most part the hogs, 192 00:10:36,720 --> 00:10:38,320 Speaker 1: hogs have made enough money this year to pay the 193 00:10:38,320 --> 00:10:40,439 Speaker 1: feed bill, which when you look at the price of 194 00:10:40,480 --> 00:10:44,400 Speaker 1: corn and swabians, Um, that's that's really saying something. Now myself, 195 00:10:44,920 --> 00:10:47,319 Speaker 1: I'm in a in a different position than a lot 196 00:10:47,320 --> 00:10:49,960 Speaker 1: of hog producers in which I grow all my corn 197 00:10:50,760 --> 00:10:53,360 Speaker 1: h that I need to feed my hog operation. So 198 00:10:53,559 --> 00:10:57,599 Speaker 1: I'm in essence buying it from myself. Um, and so 199 00:10:57,600 --> 00:10:59,760 Speaker 1: so that there's a benefit to that, that's kind of 200 00:10:59,800 --> 00:11:03,800 Speaker 1: heading a risk. But I would say in general, um, 201 00:11:03,840 --> 00:11:07,640 Speaker 1: a lot of hog producers, I know, implement risk management strategies, 202 00:11:07,679 --> 00:11:11,040 Speaker 1: and when they can see a margin that allows them 203 00:11:11,080 --> 00:11:13,960 Speaker 1: to buy corn and soybean meal and hedgehogs at a 204 00:11:14,000 --> 00:11:17,600 Speaker 1: price that allows them margins, they will take all three positions. 205 00:11:17,679 --> 00:11:21,000 Speaker 1: And so the market has offered those opportunities this year, 206 00:11:21,000 --> 00:11:24,560 Speaker 1: and I think in general, it has been a pretty 207 00:11:24,559 --> 00:11:27,440 Speaker 1: good year, uh for the hog for the hog side 208 00:11:27,440 --> 00:11:30,520 Speaker 1: of the of the business. So, Brian, just to go 209 00:11:30,559 --> 00:11:33,160 Speaker 1: back to the point you were just making about passing 210 00:11:33,200 --> 00:11:35,360 Speaker 1: on prices, because I wanted to ask you about this, 211 00:11:35,480 --> 00:11:37,760 Speaker 1: that it is much more difficult for farmers to do this. 212 00:11:37,840 --> 00:11:40,679 Speaker 1: So can you just for me to better better understand 213 00:11:40,840 --> 00:11:43,000 Speaker 1: the dynamics, can you just talk a little bit more 214 00:11:43,040 --> 00:11:47,840 Speaker 1: about how rising prices, what the how it directly translates 215 00:11:48,040 --> 00:11:51,000 Speaker 1: to you, what the what the relationship actually looks like. 216 00:11:51,240 --> 00:11:54,240 Speaker 1: Surevill Nana. That's and and it's impossible for farmers to 217 00:11:54,320 --> 00:11:57,200 Speaker 1: set their price, at least in a commodity type market. Now, 218 00:11:57,240 --> 00:12:01,360 Speaker 1: if you're a specialty grower or have uh you know, 219 00:12:01,640 --> 00:12:04,800 Speaker 1: a direct to consumer market, then you've got some options. 220 00:12:04,800 --> 00:12:10,040 Speaker 1: But most of us grow bolt commodities and and we, uh, 221 00:12:10,080 --> 00:12:12,160 Speaker 1: we are at the whim of the marketplace, and that 222 00:12:12,240 --> 00:12:15,680 Speaker 1: marketplace has two aspects to it. So it's got the 223 00:12:15,720 --> 00:12:18,160 Speaker 1: futures price that Mike you talked about. You can look 224 00:12:18,160 --> 00:12:20,600 Speaker 1: on the board of Trade and see the prices that 225 00:12:20,600 --> 00:12:24,040 Speaker 1: that the board is offering on different commodities. But then 226 00:12:24,320 --> 00:12:27,480 Speaker 1: the next part of that is the local price, which 227 00:12:27,520 --> 00:12:34,760 Speaker 1: involves basis, and basis is the discount or plus the 228 00:12:34,800 --> 00:12:37,080 Speaker 1: futures price that the local market is willing to pay. 229 00:12:37,600 --> 00:12:42,239 Speaker 1: And usually it's a discount because usually there's transportation involved, 230 00:12:42,840 --> 00:12:46,880 Speaker 1: but in times of shortage, some local markets will actually 231 00:12:46,920 --> 00:12:51,120 Speaker 1: pay over the board of trade. So so farmers usually 232 00:12:51,160 --> 00:12:54,480 Speaker 1: marketing is a two step process. I will do a 233 00:12:54,559 --> 00:12:57,640 Speaker 1: hedge on the board and then I will look for 234 00:12:57,679 --> 00:13:01,439 Speaker 1: opportunities to capture a good basis as well. And so 235 00:13:01,559 --> 00:13:05,000 Speaker 1: it's all a matter of timing, knowing market dynamics, and 236 00:13:05,160 --> 00:13:08,240 Speaker 1: UH looking for those opportunities. So selling for a farmer 237 00:13:08,320 --> 00:13:10,959 Speaker 1: is generally a two step process. On the grain side, 238 00:13:10,960 --> 00:13:14,800 Speaker 1: at least hoggs, there is a basis element to it. 239 00:13:15,440 --> 00:13:21,080 Speaker 1: Um and hogs get really complicated. Hogs, UH do not 240 00:13:21,200 --> 00:13:24,000 Speaker 1: have a way to deliver. If I sold a contract 241 00:13:24,000 --> 00:13:26,319 Speaker 1: on the Mercantile Exchange, there's no way I can deliver 242 00:13:26,400 --> 00:13:29,640 Speaker 1: that contract of Hoggs anywhere. So it does what's called 243 00:13:29,679 --> 00:13:32,040 Speaker 1: cash settled, and it means it has to settle out 244 00:13:32,040 --> 00:13:35,040 Speaker 1: with the cash market and Bildana. This is getting incredibly complicated, 245 00:13:35,480 --> 00:13:38,520 Speaker 1: but the basis is still very real in that aspect 246 00:13:38,880 --> 00:13:43,199 Speaker 1: as well. Now we like we like complicated. It's it's 247 00:13:43,240 --> 00:13:52,959 Speaker 1: fascinating to untackle it, you know, Brad, I was looking 248 00:13:53,080 --> 00:13:57,640 Speaker 1: at the futures curve for hog prices and for listeners 249 00:13:57,679 --> 00:13:59,240 Speaker 1: who don't know what I mean by that. You know, 250 00:13:59,280 --> 00:14:02,160 Speaker 1: there's futures going all the way out to what at 251 00:14:02,200 --> 00:14:04,079 Speaker 1: the end of next year. I think maybe even further. 252 00:14:04,240 --> 00:14:07,400 Speaker 1: I'm gonna pulled up right now. Three is what I show, 253 00:14:07,440 --> 00:14:10,080 Speaker 1: but there might be some there might be further than that. 254 00:14:10,920 --> 00:14:14,920 Speaker 1: And it's a very unusual shape of the curve. In 255 00:14:14,960 --> 00:14:18,240 Speaker 1: other words, it's it's lower. You know, it goes lower 256 00:14:18,720 --> 00:14:20,920 Speaker 1: in the first month, I believe, and then it goes 257 00:14:21,040 --> 00:14:24,440 Speaker 1: really high into like the spring and summer of next month, 258 00:14:24,840 --> 00:14:28,680 Speaker 1: then it comes back down. Um is that simple? Something 259 00:14:28,720 --> 00:14:33,160 Speaker 1: as simple as just a seasonality people you know, doing 260 00:14:33,160 --> 00:14:35,280 Speaker 1: more barbecuing in the summer, that that sort of thing, 261 00:14:35,600 --> 00:14:38,680 Speaker 1: and that you are very observant and that's an excellent question, 262 00:14:39,200 --> 00:14:42,480 Speaker 1: and you have part of the answer correct. But it 263 00:14:42,560 --> 00:14:48,000 Speaker 1: also has to do with the genetic UH and the 264 00:14:48,040 --> 00:14:52,600 Speaker 1: biological reality of pork production. And and I'll put it bluntly, 265 00:14:53,280 --> 00:14:57,880 Speaker 1: salves breed easier, and you have more successful breeding in 266 00:14:57,920 --> 00:15:01,760 Speaker 1: the spring and in the fall. All that's the seasonality 267 00:15:01,840 --> 00:15:05,080 Speaker 1: for a hog. We breed hogs and raise them all year. 268 00:15:05,800 --> 00:15:08,960 Speaker 1: The hogs that you breed in the summer, in the heat, 269 00:15:09,200 --> 00:15:13,080 Speaker 1: your conception isn't as good. And so when you're farrowing 270 00:15:13,320 --> 00:15:15,800 Speaker 1: those pigs in November and December that we'll go to 271 00:15:15,840 --> 00:15:18,400 Speaker 1: market in May, June, and July, your numbers are down. 272 00:15:19,000 --> 00:15:22,400 Speaker 1: And so there are fewer numbers available for the marketplace 273 00:15:22,840 --> 00:15:26,560 Speaker 1: over the summer months due to the seasonality, the biological 274 00:15:27,600 --> 00:15:31,160 Speaker 1: realities of pork production. And we and and Mike, we 275 00:15:31,160 --> 00:15:35,640 Speaker 1: we have these these hogs and in wonderful facilities UH 276 00:15:35,840 --> 00:15:39,640 Speaker 1: air conditioned in in in a certain aspect we use 277 00:15:39,680 --> 00:15:42,680 Speaker 1: engraperative cooling. A lot of fans move a lot of air. 278 00:15:42,720 --> 00:15:46,200 Speaker 1: But that biological reality that there's just gonna be fewer 279 00:15:46,240 --> 00:15:49,080 Speaker 1: market hogs available in the summer is something that we 280 00:15:49,120 --> 00:15:51,120 Speaker 1: have not figured out a way to a work around. 281 00:15:51,200 --> 00:15:54,680 Speaker 1: Yet that is fascinating. So you know, you've got the 282 00:15:55,120 --> 00:15:58,040 Speaker 1: hog honeymoon suite there with the air cushing and the 283 00:15:58,120 --> 00:16:02,720 Speaker 1: mood lighting, I guess, and that ow candle you can't. 284 00:16:02,520 --> 00:16:06,880 Speaker 1: And it's but it's just something in their DNA that 285 00:16:06,880 --> 00:16:10,960 Speaker 1: that regulates that pite very much so and and uh, 286 00:16:11,080 --> 00:16:15,040 Speaker 1: you know the heat. Yeah, it's it's just a seasonal issue. 287 00:16:15,280 --> 00:16:18,040 Speaker 1: And so the numbers will always if you would go 288 00:16:18,080 --> 00:16:20,800 Speaker 1: back and look at a bell curve mike of of 289 00:16:20,800 --> 00:16:24,680 Speaker 1: of hog harvest week by week, the highest, the largest 290 00:16:24,680 --> 00:16:29,360 Speaker 1: harvests are always in October, November, December, and and so 291 00:16:29,440 --> 00:16:32,280 Speaker 1: that results in the lower prices that you're looking at now. Now, 292 00:16:32,320 --> 00:16:34,920 Speaker 1: if you we'd have had this discussion in May, and 293 00:16:34,960 --> 00:16:37,640 Speaker 1: you'd have been looking at at June, July, and August 294 00:16:37,640 --> 00:16:39,880 Speaker 1: hog futures as the leaden months, you'd have seen them 295 00:16:39,920 --> 00:16:44,440 Speaker 1: the highest because there's there's just fewer hogs. And then 296 00:16:44,520 --> 00:16:48,720 Speaker 1: we also experience a bump with grilling season certainly, and 297 00:16:48,720 --> 00:16:52,360 Speaker 1: and and that all helps, but the pure seasonality of 298 00:16:52,680 --> 00:16:55,360 Speaker 1: pork production is very much at play when you look 299 00:16:55,360 --> 00:16:59,640 Speaker 1: at that futures curve. And Brad, we've mentioned a couple 300 00:16:59,680 --> 00:17:03,040 Speaker 1: of differ issues so far So you have inflation, you 301 00:17:03,080 --> 00:17:06,360 Speaker 1: have supply chain issues, you have droughts, and all kinds 302 00:17:06,400 --> 00:17:09,119 Speaker 1: of other other problems that you're dealing with. I'm hoping 303 00:17:09,119 --> 00:17:11,199 Speaker 1: maybe you can just break down one or two of 304 00:17:11,240 --> 00:17:14,960 Speaker 1: them for us and how it directly impacts you. And 305 00:17:15,640 --> 00:17:19,600 Speaker 1: I'm wondering what the most difficult issue or problem has 306 00:17:19,680 --> 00:17:25,000 Speaker 1: been to deal with. Well, I think inflation on inputs 307 00:17:25,000 --> 00:17:27,080 Speaker 1: on the crop side and some of the hog side 308 00:17:27,119 --> 00:17:30,360 Speaker 1: would be would be number one. And I think supply 309 00:17:30,480 --> 00:17:33,000 Speaker 1: chain issues are number two. And on any given day, 310 00:17:33,000 --> 00:17:37,280 Speaker 1: I would trade those back and forth. And uh and 311 00:17:37,520 --> 00:17:40,280 Speaker 1: and I think I think they are, you know, certainly connected. 312 00:17:40,840 --> 00:17:45,440 Speaker 1: I think, uh, inflation. We you guys, you're the experts. 313 00:17:45,440 --> 00:17:46,960 Speaker 1: Why I'm not sure why I you should be telling 314 00:17:47,000 --> 00:17:49,680 Speaker 1: me about this, but but you know, we still see 315 00:17:49,760 --> 00:17:55,160 Speaker 1: some some disruption due to COVID so manufacturing that wasn't done. 316 00:17:55,600 --> 00:17:57,359 Speaker 1: A lot of our inputs come from China, and we 317 00:17:57,400 --> 00:18:00,439 Speaker 1: still see a zero COVID tolerance policy and China that 318 00:18:00,480 --> 00:18:03,320 Speaker 1: impacts that impacts their ability to export some of the 319 00:18:03,359 --> 00:18:06,879 Speaker 1: base materials we need, whether for livestock feed or crop 320 00:18:06,880 --> 00:18:12,000 Speaker 1: production products. UM, we see geopolitical unrest, a lot of 321 00:18:12,440 --> 00:18:15,879 Speaker 1: disruption caused by the war in Ukraine. Russia was a 322 00:18:15,960 --> 00:18:19,440 Speaker 1: large exporter of fertilizer and as you know, a large 323 00:18:19,480 --> 00:18:22,960 Speaker 1: exporter of natural gas to Europe, and and now on 324 00:18:23,000 --> 00:18:25,840 Speaker 1: the nord Stream with the disruption in the Nord Stream pipeline, 325 00:18:25,880 --> 00:18:29,080 Speaker 1: Europe comes shopping here for natural gas, and natural gas 326 00:18:29,119 --> 00:18:32,960 Speaker 1: is a base ingredient for fertilizer, for nitrogen fertilizer, So 327 00:18:33,320 --> 00:18:37,800 Speaker 1: that has definitely been a disruption supply chain, whatever whatever 328 00:18:37,840 --> 00:18:40,719 Speaker 1: you want to call it. And then I think another 329 00:18:40,760 --> 00:18:44,400 Speaker 1: closely related issue with inflation and supply chain is availability 330 00:18:44,400 --> 00:18:48,359 Speaker 1: of labor. And and we see that anywhere from the 331 00:18:48,400 --> 00:18:53,040 Speaker 1: farms to the suppliers to the manufacturers that uh, labor 332 00:18:53,320 --> 00:18:56,119 Speaker 1: is is a very limiting factor. And even in the 333 00:18:56,160 --> 00:18:59,399 Speaker 1: harvest facilities of live stock harvest facilities, the availability of 334 00:18:59,520 --> 00:19:04,200 Speaker 1: labor to to maximize outputs and to maximize the availability 335 00:19:04,200 --> 00:19:08,000 Speaker 1: about inputs is very real for American agriculture right now. 336 00:19:09,840 --> 00:19:13,360 Speaker 1: Is there, Brian, any sense that any of these issues 337 00:19:13,400 --> 00:19:16,919 Speaker 1: are are improving, Is there any sort of white at 338 00:19:16,920 --> 00:19:20,959 Speaker 1: the end of the tunnel for all these problems. I 339 00:19:20,880 --> 00:19:25,199 Speaker 1: I would have said yes, prior to the invasion of Ukraine, 340 00:19:25,400 --> 00:19:28,119 Speaker 1: um that I think I've been saying, And I was 341 00:19:29,160 --> 00:19:32,120 Speaker 1: on a on a farm bureau trip in Europe eight 342 00:19:32,200 --> 00:19:35,760 Speaker 1: days after the invasion happened, been meeting with farmers and 343 00:19:35,760 --> 00:19:38,840 Speaker 1: farm suppliers over there, and I came away saying, this 344 00:19:38,880 --> 00:19:43,440 Speaker 1: has changed American agriculture for a generation. That the redirection 345 00:19:43,800 --> 00:19:47,920 Speaker 1: of raw materials and then of commodity flows I think 346 00:19:48,040 --> 00:19:49,679 Speaker 1: is very real and something we are going to be 347 00:19:49,720 --> 00:19:51,960 Speaker 1: dealing with for a long time. I mean, as Russia 348 00:19:52,000 --> 00:19:56,080 Speaker 1: was a major exporter of fertilizer and natural gas, and 349 00:19:56,240 --> 00:19:59,320 Speaker 1: you also see some tensions with China. They're holding their 350 00:19:59,359 --> 00:20:02,919 Speaker 1: fertilizer within their own country, and yet you see a 351 00:20:02,960 --> 00:20:08,119 Speaker 1: growing demand for fertilizer, be it in Brazil, Africa here. Uh, 352 00:20:08,160 --> 00:20:10,919 Speaker 1: it's just led to it was. It's just a huge disruption. 353 00:20:11,400 --> 00:20:16,200 Speaker 1: So you don't you don't flip a switch and start 354 00:20:16,440 --> 00:20:21,119 Speaker 1: a major fertilizer production plant overnight. It takes years to cite, 355 00:20:21,160 --> 00:20:24,240 Speaker 1: one years to put one in place, and a huge 356 00:20:24,280 --> 00:20:27,639 Speaker 1: investment that that any investor would want to know that 357 00:20:27,680 --> 00:20:31,119 Speaker 1: the returns are not just short term, that there's going 358 00:20:31,160 --> 00:20:34,480 Speaker 1: to be long term demand here. And so I think 359 00:20:34,520 --> 00:20:38,840 Speaker 1: the fertilizer disruption is very real and is uh, something 360 00:20:38,880 --> 00:20:41,359 Speaker 1: we're going to be dealing with going forward for a while. 361 00:20:42,520 --> 00:20:45,399 Speaker 1: The labor issue. Again, you are the experts. I'm a 362 00:20:45,560 --> 00:20:48,960 Speaker 1: I'm a hog farmer from Polo, Illinois. But my sense 363 00:20:49,000 --> 00:20:52,280 Speaker 1: on labor is there needs to be a collective political 364 00:20:52,400 --> 00:20:55,719 Speaker 1: will amongst the leadership in this country to find a 365 00:20:55,760 --> 00:21:01,200 Speaker 1: solution and come forward with some legal immigration reform. When 366 00:21:01,240 --> 00:21:03,360 Speaker 1: we have people willing to work in some of these 367 00:21:03,440 --> 00:21:06,680 Speaker 1: key supply chain jobs, we need to find a way 368 00:21:06,960 --> 00:21:10,040 Speaker 1: to allow them into this country and to fill those tasks. Now, 369 00:21:10,080 --> 00:21:13,520 Speaker 1: the H two A program certainly helps in agriculture, and 370 00:21:13,560 --> 00:21:17,400 Speaker 1: there's some different visa programs that help, but I think 371 00:21:17,480 --> 00:21:21,720 Speaker 1: that is probably more doable than than solving this global 372 00:21:21,760 --> 00:21:24,960 Speaker 1: redirection of fertilizer and energy. I mean, and that's the 373 00:21:25,000 --> 00:21:28,960 Speaker 1: other thing. Agriculture is very fossil fuel dependent. We are 374 00:21:29,080 --> 00:21:32,240 Speaker 1: it's a base product and in making some of the 375 00:21:32,359 --> 00:21:35,040 Speaker 1: some of the chemicals that we use, the plant protection products. 376 00:21:35,080 --> 00:21:39,040 Speaker 1: But our machinery runs on diesel, and when diesel goes up, 377 00:21:39,200 --> 00:21:42,000 Speaker 1: our life gets a lot more expensive. And everything we 378 00:21:42,119 --> 00:21:44,680 Speaker 1: have on the farm or sell on the farm comes 379 00:21:44,720 --> 00:21:46,919 Speaker 1: on a semi or leaves on a semi on a 380 00:21:46,920 --> 00:21:50,880 Speaker 1: big truck and uh, the cost of transportation has gone 381 00:21:50,920 --> 00:21:54,520 Speaker 1: through the roof as well, and so uh, I think 382 00:21:54,560 --> 00:21:59,800 Speaker 1: we need to aggressively continue to to look for solutions 383 00:21:59,800 --> 00:22:05,400 Speaker 1: in the hostile fuel space and uh that would also help, Brian. 384 00:22:05,480 --> 00:22:06,800 Speaker 1: Do you see, just to go back to the point 385 00:22:06,800 --> 00:22:09,760 Speaker 1: about Russia and Ukraine and the fertilizer shortages, do you 386 00:22:09,800 --> 00:22:13,840 Speaker 1: see American farmers stepping into help fill the void, even 387 00:22:14,000 --> 00:22:17,080 Speaker 1: if it's not a quick turnaround. You mean as far 388 00:22:17,160 --> 00:22:20,439 Speaker 1: as like our co ops investing in fertilizer production and 389 00:22:20,520 --> 00:22:24,600 Speaker 1: things like that. Is that what you're talking about, Panana, Yeah, exactly, Yeah, 390 00:22:24,880 --> 00:22:28,080 Speaker 1: maybe so some of our co ops used to own 391 00:22:28,400 --> 00:22:35,240 Speaker 1: fertilizer production facilities, um, and they weren't profitable, and so 392 00:22:35,320 --> 00:22:39,199 Speaker 1: they invested of them and and so we've seen you 393 00:22:39,240 --> 00:22:41,760 Speaker 1: can Yeah, I would call it an old agopoly. A 394 00:22:41,840 --> 00:22:45,200 Speaker 1: very small number of fertilizer companies that control a large 395 00:22:45,200 --> 00:22:47,800 Speaker 1: amount of the supply and farmer and co ops used 396 00:22:47,800 --> 00:22:51,080 Speaker 1: to be in that space, but they're not now. I 397 00:22:51,200 --> 00:22:54,560 Speaker 1: don't know if there is the will or the capital 398 00:22:54,640 --> 00:22:57,439 Speaker 1: to make a long term commitment to re enter that space. 399 00:22:57,520 --> 00:23:03,720 Speaker 1: My sense would be once burnt twice shy, Yeah, you know, Brian. 400 00:23:03,760 --> 00:23:06,640 Speaker 1: The other issue that comes up in pretty much every 401 00:23:06,680 --> 00:23:10,359 Speaker 1: discussion like this, uh, you know about macro issues around 402 00:23:10,359 --> 00:23:12,880 Speaker 1: the world, is is China and the sort of state 403 00:23:12,920 --> 00:23:16,119 Speaker 1: of the economy in China the state of trade relations 404 00:23:16,119 --> 00:23:19,760 Speaker 1: with the US. UM. China from everything I've read, is 405 00:23:19,760 --> 00:23:24,960 Speaker 1: is a major consumer of of US pork products. Um. 406 00:23:25,000 --> 00:23:28,159 Speaker 1: How do you see this decoupling of the US and 407 00:23:28,359 --> 00:23:31,639 Speaker 1: China playing out sort of in the in the longer term? 408 00:23:31,680 --> 00:23:34,240 Speaker 1: Is that a Is that sort of a risk that 409 00:23:34,280 --> 00:23:37,800 Speaker 1: maybe they'll start turning elsewhere for hogs? Uh? Is that 410 00:23:37,880 --> 00:23:40,800 Speaker 1: a danger to to your business at all? Do you think? Yeah? 411 00:23:40,880 --> 00:23:45,040 Speaker 1: I'm I'm very worried about what what I would call 412 00:23:45,240 --> 00:23:50,240 Speaker 1: the relationship that I've read and understood as bricks b 413 00:23:50,480 --> 00:23:55,080 Speaker 1: R I c S Brazil, Russia, Indian China, and how 414 00:23:55,119 --> 00:24:00,159 Speaker 1: they could become a galvanized interdependent force that would have 415 00:24:00,400 --> 00:24:03,919 Speaker 1: that would have tremendous geopolitical consequences and it would definitely 416 00:24:03,920 --> 00:24:07,640 Speaker 1: impact American agriculture. I mean, we see Brazil, so Brazil 417 00:24:08,240 --> 00:24:10,520 Speaker 1: was a main grower of soybeans, okay, and so we 418 00:24:10,560 --> 00:24:13,120 Speaker 1: know they're a lead export competitor on soybeans, but they've 419 00:24:13,200 --> 00:24:16,600 Speaker 1: also advanced in the technologies to grow to crops. And 420 00:24:16,600 --> 00:24:18,480 Speaker 1: when you're in Brazil, they grow corn. It's called the 421 00:24:18,560 --> 00:24:22,359 Speaker 1: safarina crop after they grow soybeans and now the sapharina crop. 422 00:24:22,800 --> 00:24:25,000 Speaker 1: Their average yield is half or less than half of 423 00:24:25,040 --> 00:24:28,320 Speaker 1: what American crops yield, but still that many acres, that's 424 00:24:28,359 --> 00:24:31,879 Speaker 1: a lot of bushels. And and China has made moves 425 00:24:31,920 --> 00:24:38,040 Speaker 1: to accept corn imports from Brazil, which as as we 426 00:24:38,119 --> 00:24:42,040 Speaker 1: look at the redirection of trade, if if there's an 427 00:24:42,040 --> 00:24:47,600 Speaker 1: alliance there, um, that could be very problematic for American 428 00:24:47,640 --> 00:24:51,880 Speaker 1: agriculture and our ability to export. And but I think 429 00:24:51,920 --> 00:24:54,720 Speaker 1: there's other opportunities as well. We don't want to just 430 00:24:55,000 --> 00:24:58,920 Speaker 1: export based commodities. We like to export value added commodities 431 00:24:58,960 --> 00:25:02,240 Speaker 1: like ethanol and and I think there's room there but 432 00:25:03,119 --> 00:25:07,879 Speaker 1: to do exports around the world. But China is is 433 00:25:08,240 --> 00:25:11,760 Speaker 1: uh challenging. How's that for a trading partner. They just 434 00:25:11,840 --> 00:25:18,040 Speaker 1: delisted a pork plant in uh Indiana, um and and 435 00:25:18,040 --> 00:25:19,919 Speaker 1: and I won't accept it for exports. And I'm not 436 00:25:19,960 --> 00:25:22,959 Speaker 1: sure why. I'm not sure anybody knows why. And and 437 00:25:23,040 --> 00:25:26,320 Speaker 1: so these nine tariff trade barriers that we see. China's 438 00:25:26,480 --> 00:25:30,840 Speaker 1: is pretty expert at deploying at times, which makes which 439 00:25:30,880 --> 00:25:33,960 Speaker 1: makes a long term relationship with them very challenging. But 440 00:25:34,040 --> 00:25:36,120 Speaker 1: at the end, when you look at those consumers there, 441 00:25:36,560 --> 00:25:39,880 Speaker 1: American business isn't American farmers time after time have decided 442 00:25:40,200 --> 00:25:43,520 Speaker 1: the juice is worth the squeeze, and so we put 443 00:25:43,600 --> 00:25:46,080 Speaker 1: up with it and and continue to try and move 444 00:25:46,080 --> 00:25:50,760 Speaker 1: into that market. I imagine none of that actually helps 445 00:25:50,800 --> 00:25:55,160 Speaker 1: with rising meat prices, right, And I'm wondering if you 446 00:25:55,320 --> 00:26:00,440 Speaker 1: have seen dwindling consumer demand at all with the right 447 00:26:00,560 --> 00:26:03,439 Speaker 1: with the rise and meat prices that we've seen, I 448 00:26:03,480 --> 00:26:05,919 Speaker 1: have not heard of any The consumer demand remained strong 449 00:26:06,240 --> 00:26:08,760 Speaker 1: and I and and some of the rise and meat 450 00:26:08,760 --> 00:26:11,000 Speaker 1: prices that you're seeing is a fall out of COVID. 451 00:26:12,240 --> 00:26:14,959 Speaker 1: So those of us in production agriculture when COVID hit, 452 00:26:15,040 --> 00:26:18,280 Speaker 1: especially in the livestock business, and I'm sure you you 453 00:26:18,400 --> 00:26:23,080 Speaker 1: covered this, uh back in when we had harvest facilities 454 00:26:23,119 --> 00:26:25,399 Speaker 1: going closed and we had animals with no place to 455 00:26:25,480 --> 00:26:30,120 Speaker 1: sell them. It was a very bleak time in livestock production, 456 00:26:30,200 --> 00:26:32,439 Speaker 1: and there were some decisions made then, and remember the 457 00:26:32,440 --> 00:26:35,479 Speaker 1: biology of the animal. There were some decisions made at 458 00:26:35,520 --> 00:26:38,960 Speaker 1: that time to cull breeding herds, to to exit businesses 459 00:26:39,720 --> 00:26:42,600 Speaker 1: and and in production agriculture, we just can't flip a 460 00:26:42,640 --> 00:26:45,120 Speaker 1: switch and turn a light back on. If I want 461 00:26:45,160 --> 00:26:47,320 Speaker 1: to raise more pigs, I need to and have those 462 00:26:47,320 --> 00:26:50,639 Speaker 1: pigs ready for market. It is an eighteen month process 463 00:26:50,720 --> 00:26:53,479 Speaker 1: till I have marketable livestock. By the time I select 464 00:26:53,520 --> 00:26:57,440 Speaker 1: the breeding animals, raised them, breed them, raise their offspring, 465 00:26:57,480 --> 00:27:02,080 Speaker 1: it's eighteen months. And so you're you're seeing the result 466 00:27:02,160 --> 00:27:06,760 Speaker 1: with higher prices here of very real struggles and very 467 00:27:06,840 --> 00:27:10,800 Speaker 1: challenging times that farmers had during COVID and the reduction 468 00:27:10,840 --> 00:27:13,960 Speaker 1: in the herds. And then you're also seeing a result 469 00:27:14,080 --> 00:27:16,919 Speaker 1: of adonna of lack of available labor on some of 470 00:27:16,960 --> 00:27:21,320 Speaker 1: these farms to rant production back up. But I it's 471 00:27:21,480 --> 00:27:24,640 Speaker 1: consumers and and the rising middle class around the world 472 00:27:24,680 --> 00:27:27,959 Speaker 1: will continue to have a demand for protein. That's just 473 00:27:28,000 --> 00:27:31,440 Speaker 1: a fact. When consumers raise their standard of living, they 474 00:27:31,440 --> 00:27:34,359 Speaker 1: want to eat better. And we've seen that time after time, 475 00:27:34,960 --> 00:27:37,960 Speaker 1: And so I think there is solid underpinning of demands 476 00:27:37,960 --> 00:27:42,560 Speaker 1: for protein. And I sure hope that consumers understand that 477 00:27:43,080 --> 00:27:45,560 Speaker 1: farmers were doing all we can to supply the protein 478 00:27:45,640 --> 00:27:48,400 Speaker 1: to them. Uh, there's just an awful lot of mitigating 479 00:27:48,440 --> 00:27:54,360 Speaker 1: factors these days. Yeah, Brian I. As I said earlier, 480 00:27:54,720 --> 00:27:57,080 Speaker 1: I grew up in Pennsylvania, in the suburbs of Philadelphia, 481 00:27:57,080 --> 00:28:00,399 Speaker 1: and there were family farms all around me. But you know, 482 00:28:00,640 --> 00:28:03,520 Speaker 1: one by one, the value of that real estate started 483 00:28:03,640 --> 00:28:07,080 Speaker 1: to become so valuable. Uh. You know, as the suburban 484 00:28:07,119 --> 00:28:11,200 Speaker 1: sprawl sort of spread out throughout the suburbs of Philadelphia, 485 00:28:11,720 --> 00:28:17,360 Speaker 1: You're I think, what about two hours outside of Chicago. 486 00:28:17,720 --> 00:28:21,960 Speaker 1: So I'm just curious. We've had this hot real estate 487 00:28:22,000 --> 00:28:24,240 Speaker 1: market at least, you know, until a few months ago. 488 00:28:24,320 --> 00:28:26,040 Speaker 1: The interest rates are kind of cooling it off. And 489 00:28:26,600 --> 00:28:29,320 Speaker 1: you know that my senses, there's this very much a 490 00:28:29,359 --> 00:28:33,040 Speaker 1: migration out of the cities into the suburbs and the exerbs. 491 00:28:33,720 --> 00:28:39,520 Speaker 1: Is there any pressure market pressure on any your your 492 00:28:39,760 --> 00:28:43,480 Speaker 1: fellow farmers, or at least the temptation to say, look, 493 00:28:43,480 --> 00:28:46,360 Speaker 1: this is a hot time to sell this land, uh 494 00:28:46,400 --> 00:28:49,080 Speaker 1: and and just retire and cash in on the value 495 00:28:49,080 --> 00:28:51,600 Speaker 1: of that real state. Imagine that's always kind of attention 496 00:28:51,760 --> 00:28:54,640 Speaker 1: for a farmer. Is you know, is this has my 497 00:28:54,680 --> 00:28:58,720 Speaker 1: real estate, my farmland appreciated enough that you know makes 498 00:28:58,760 --> 00:29:01,520 Speaker 1: sense to to to bail on it, on this farm 499 00:29:01,560 --> 00:29:04,560 Speaker 1: and sell a developer. Is that an issue now? Or 500 00:29:04,600 --> 00:29:07,160 Speaker 1: am I just imagining that? Like, is that is that 501 00:29:07,200 --> 00:29:09,720 Speaker 1: getting to be a bigger issue for farmers that temptations 502 00:29:09,760 --> 00:29:13,400 Speaker 1: to to offload their real estates. Again, very good question, Mike. 503 00:29:13,480 --> 00:29:16,440 Speaker 1: And so first of all, you need to realize remember 504 00:29:16,480 --> 00:29:20,520 Speaker 1: what state I live in? Yeah, Illinois, Illinois. Not a 505 00:29:20,520 --> 00:29:23,600 Speaker 1: lot of people looking to move to Illinois. So well, 506 00:29:23,640 --> 00:29:25,520 Speaker 1: it's it's it's reality. You know, if we were talking 507 00:29:25,560 --> 00:29:27,920 Speaker 1: to a farmer in Texas or in Florida or some 508 00:29:27,960 --> 00:29:31,320 Speaker 1: of the other hot growth states, that could be a 509 00:29:31,360 --> 00:29:34,800 Speaker 1: bigger tension. So what we have seen, yes, there is 510 00:29:34,840 --> 00:29:38,080 Speaker 1: some there is some development pressure around certain cities, but 511 00:29:38,160 --> 00:29:42,280 Speaker 1: we have seen an overall rise in real estate values uh, 512 00:29:42,480 --> 00:29:45,920 Speaker 1: tied to the value of commodities and low interest rates 513 00:29:46,040 --> 00:29:51,000 Speaker 1: and the interest of people to invest in solid assets. 514 00:29:51,840 --> 00:29:54,400 Speaker 1: You know, Bill Donna, you said earlier you you you 515 00:29:54,600 --> 00:29:58,840 Speaker 1: specialize in cryptocurrencies. Well, farmland is about the opposite as 516 00:29:58,920 --> 00:30:02,280 Speaker 1: much of an opposite in investment as cryptocurrent and cryptocurrency 517 00:30:02,760 --> 00:30:04,600 Speaker 1: as there is. Because people like to be able to 518 00:30:04,680 --> 00:30:06,480 Speaker 1: drive by and see their farm land, and so we 519 00:30:06,560 --> 00:30:10,520 Speaker 1: have seen arise in interest from investors and so yes, 520 00:30:10,600 --> 00:30:15,520 Speaker 1: it has caused farmland values to rise, uh. The capitalization 521 00:30:15,560 --> 00:30:20,720 Speaker 1: required to farm is extraordinary, and uh arising interest rates 522 00:30:21,000 --> 00:30:24,800 Speaker 1: also makes our costs higher. But but Mike your second question, 523 00:30:25,560 --> 00:30:28,920 Speaker 1: the other side of that coin is when a farmer sell, 524 00:30:29,000 --> 00:30:31,560 Speaker 1: If he would sell that land and cash out, then 525 00:30:31,880 --> 00:30:35,520 Speaker 1: he's going to realize some pretty significant capital gains taxes. 526 00:30:36,200 --> 00:30:38,760 Speaker 1: And so most farmers that I know, at least in 527 00:30:38,840 --> 00:30:43,400 Speaker 1: my area, were not development pressured. We have investment pressure. Um, 528 00:30:43,960 --> 00:30:47,280 Speaker 1: hold the land, try to hold it for generations, hopefully, 529 00:30:47,400 --> 00:30:49,480 Speaker 1: you know they all we all hope our kids want 530 00:30:49,480 --> 00:30:51,760 Speaker 1: to farm, and I'm fortunate I got three maybe four 531 00:30:51,840 --> 00:30:53,880 Speaker 1: that that want to be a part of it. And 532 00:30:53,920 --> 00:30:57,480 Speaker 1: so we see this as a long term play. Uh 533 00:30:57,680 --> 00:31:01,240 Speaker 1: like generations. I've got a grand that was born last August. 534 00:31:01,280 --> 00:31:03,320 Speaker 1: I'm already figuring out which tractor he's gonna drive in 535 00:31:03,360 --> 00:31:06,040 Speaker 1: a few years. So we we tend to look at 536 00:31:06,040 --> 00:31:09,360 Speaker 1: it generationally. Might not not that short term, but I 537 00:31:09,400 --> 00:31:12,240 Speaker 1: know if a farmer is nearing retirement and doesn't have 538 00:31:12,280 --> 00:31:16,400 Speaker 1: any kids coming on, um, yeah, I think that's probably 539 00:31:16,440 --> 00:31:18,360 Speaker 1: a very real temptation. But then they're always going to 540 00:31:18,400 --> 00:31:22,120 Speaker 1: look at the tax consequences and make the decision. Well, 541 00:31:22,120 --> 00:31:25,000 Speaker 1: that's interesting that the value of it as farmland. It 542 00:31:25,080 --> 00:31:28,480 Speaker 1: sounds like that that demand for the farmland is just 543 00:31:28,560 --> 00:31:32,640 Speaker 1: as strong, uh, maybe stronger in your area than the 544 00:31:32,720 --> 00:31:35,120 Speaker 1: value of development. Yeah, and it's not just the price 545 00:31:35,160 --> 00:31:40,320 Speaker 1: of commodities. We see. We see some very interesting um 546 00:31:40,360 --> 00:31:42,240 Speaker 1: I don't know if they're anomalies or if they're real, 547 00:31:42,280 --> 00:31:46,320 Speaker 1: but there's interest in carbon sequestration and value of farmland 548 00:31:46,360 --> 00:31:48,920 Speaker 1: in the whole climate battle and what what that might 549 00:31:49,040 --> 00:31:52,880 Speaker 1: look like, um companies that may be buying farmland to 550 00:31:52,960 --> 00:31:56,200 Speaker 1: offset their E S E S G scores. There's all 551 00:31:56,280 --> 00:31:59,400 Speaker 1: sorts of dynamics here at play right now that it's 552 00:31:59,480 --> 00:32:02,760 Speaker 1: kind of hard to get a handle on, right right, Well, 553 00:32:02,840 --> 00:32:06,120 Speaker 1: let's unpack that a little bit. The carbon idea, that's uh, 554 00:32:06,160 --> 00:32:08,239 Speaker 1: you know, for lack of a better word, of manure, right, 555 00:32:08,560 --> 00:32:11,800 Speaker 1: you collect the gases coming off the manure. Well, it's 556 00:32:11,880 --> 00:32:16,560 Speaker 1: it's the sequester the plants. Again, I was daydreaming about 557 00:32:16,560 --> 00:32:20,400 Speaker 1: farming and high school temistry biology. That the plants capture 558 00:32:20,440 --> 00:32:24,160 Speaker 1: the carbon and and and hold the carbon and then 559 00:32:24,240 --> 00:32:26,800 Speaker 1: if they go into the soil and the carbon stays 560 00:32:26,800 --> 00:32:30,440 Speaker 1: in the soil. That's that's that's about my third grade 561 00:32:30,560 --> 00:32:33,480 Speaker 1: level of education. And so farmers can see quester or 562 00:32:33,600 --> 00:32:36,200 Speaker 1: capture carbon from the air and hold it in the soil, 563 00:32:36,960 --> 00:32:40,880 Speaker 1: and there is some there is some interest in that 564 00:32:41,040 --> 00:32:44,520 Speaker 1: ability that companies would pay farmers, companies who are big 565 00:32:44,560 --> 00:32:51,360 Speaker 1: carbon emitters would pay farmers for sequestering carbon. But there's 566 00:32:51,040 --> 00:32:54,080 Speaker 1: a world of unknown's yet about that, Mike. We don't 567 00:32:54,080 --> 00:32:56,760 Speaker 1: even know if you can accurately measure carbon in soil, 568 00:32:57,160 --> 00:33:00,360 Speaker 1: and some of the techniques used to hold that carbon 569 00:33:00,440 --> 00:33:04,200 Speaker 1: in the soil are really challenging, UH not conducive to 570 00:33:04,200 --> 00:33:08,120 Speaker 1: growing crops, at least in more northern parts of colder climates. 571 00:33:08,640 --> 00:33:11,120 Speaker 1: And so there's a lot of there's a lot of questions, 572 00:33:11,160 --> 00:33:14,680 Speaker 1: but let's just say there's interest there about could that 573 00:33:14,760 --> 00:33:18,600 Speaker 1: be another potential revenue stream for farmers and see farmers 574 00:33:18,600 --> 00:33:37,440 Speaker 1: as part of the solution UH climate change. Brian and 575 00:33:37,720 --> 00:33:39,840 Speaker 1: I have so many questions for you, and I apologize 576 00:33:40,000 --> 00:33:42,200 Speaker 1: for jumping from topic to topic, but I do want 577 00:33:42,240 --> 00:33:44,040 Speaker 1: to ask you about your crop this year because I 578 00:33:44,560 --> 00:33:47,920 Speaker 1: read an interview or heard an interview of yours, a 579 00:33:47,960 --> 00:33:49,880 Speaker 1: recent one where you had said you felt good about 580 00:33:49,880 --> 00:33:51,720 Speaker 1: your crop this year. So can you maybe give us 581 00:33:51,760 --> 00:33:55,040 Speaker 1: an update on this and in particular maybe focused on 582 00:33:55,080 --> 00:33:57,640 Speaker 1: corn because we had a Bloomberg story a couple of 583 00:33:57,680 --> 00:33:59,840 Speaker 1: days ago that said the US is set to have 584 00:33:59,880 --> 00:34:03,520 Speaker 1: a smallest corn crop in something like three years. So, uh, 585 00:34:03,880 --> 00:34:06,320 Speaker 1: maybe just give us an update in an overview of 586 00:34:06,320 --> 00:34:08,600 Speaker 1: of how that's going. Yeah, sure, build, and I feel 587 00:34:08,680 --> 00:34:12,400 Speaker 1: very fortunate this year we have been the benefits. Beneficiary 588 00:34:12,480 --> 00:34:16,200 Speaker 1: is a very timely rainfall in northwest Illinois. We have 589 00:34:16,320 --> 00:34:22,320 Speaker 1: been very dry the last two years. Yeah, but this year, Uh, 590 00:34:22,480 --> 00:34:25,800 Speaker 1: we've the Good Lord smiled on us. We were horrible 591 00:34:25,880 --> 00:34:28,760 Speaker 1: dry in June and I thought our crop was deteriorating 592 00:34:28,800 --> 00:34:31,880 Speaker 1: before my eyes. And then the last Saturday in June, 593 00:34:31,880 --> 00:34:34,439 Speaker 1: out of nowhere, we got an inch rain and then 594 00:34:34,560 --> 00:34:37,759 Speaker 1: it's just been raining pretty regularly since then. And then 595 00:34:37,800 --> 00:34:39,400 Speaker 1: like three weeks ago we had two three and a 596 00:34:39,440 --> 00:34:41,759 Speaker 1: half inch rains in two days, and then last week 597 00:34:41,760 --> 00:34:44,360 Speaker 1: of five inch rain, which that's getting a little silly, 598 00:34:45,360 --> 00:34:49,040 Speaker 1: but the point being we have had plenty of moisture 599 00:34:49,360 --> 00:34:51,920 Speaker 1: and our good soils. Part of the world that I'm 600 00:34:51,920 --> 00:34:55,680 Speaker 1: from a northwest Illinois, Um, we don't irrigate, we rely, 601 00:34:56,040 --> 00:35:00,520 Speaker 1: we rely on Mother Nature for rain and U we've 602 00:35:00,520 --> 00:35:02,840 Speaker 1: been very blessed this year. I think we in my 603 00:35:03,000 --> 00:35:05,839 Speaker 1: part of the world are going to have a phenomenal crop. Uh. 604 00:35:06,080 --> 00:35:08,239 Speaker 1: Now there's other parts of the state. I don't have 605 00:35:08,280 --> 00:35:11,560 Speaker 1: to drive very far that the rains have been fickle. Um, 606 00:35:12,120 --> 00:35:14,520 Speaker 1: they may drop three quarters of an inch in one area, 607 00:35:14,560 --> 00:35:16,640 Speaker 1: then go two miles away and they didn't get anything. 608 00:35:16,680 --> 00:35:18,560 Speaker 1: And so there are parts and then especially as you 609 00:35:18,600 --> 00:35:24,200 Speaker 1: go west in Iowa, Nebraska, they've been dry plain and 610 00:35:24,280 --> 00:35:29,239 Speaker 1: simple dry and that's where the reduction and yielded um 611 00:35:29,520 --> 00:35:33,279 Speaker 1: is that you're seeing in the news. Well, I'm glad 612 00:35:33,320 --> 00:35:35,040 Speaker 1: to hear that the years is going well. But then 613 00:35:35,040 --> 00:35:37,600 Speaker 1: maybe can you talk about next year and how how 614 00:35:37,640 --> 00:35:42,000 Speaker 1: you're planning for and how supply chain issues hinder or 615 00:35:42,200 --> 00:35:47,520 Speaker 1: or or make planning for the next year more difficult. Yeah, again, 616 00:35:47,600 --> 00:35:51,120 Speaker 1: that's a that's a great question. Um, we need to 617 00:35:51,320 --> 00:35:53,880 Speaker 1: Now we've got a decision point with our local suppliers 618 00:35:54,840 --> 00:35:59,360 Speaker 1: of crop input products. We to get the best prices 619 00:35:59,440 --> 00:36:01,520 Speaker 1: or to lock in so we know we have availability. 620 00:36:01,560 --> 00:36:04,000 Speaker 1: We need to pay cash for them by the mid 621 00:36:04,040 --> 00:36:08,320 Speaker 1: September for next year's inputs. And I was just running 622 00:36:08,320 --> 00:36:11,319 Speaker 1: the numbers today before I before I came here. Um, 623 00:36:11,400 --> 00:36:13,520 Speaker 1: what that would look like with the cash flow needs 624 00:36:13,560 --> 00:36:16,480 Speaker 1: would be And if I think that these prices are 625 00:36:16,480 --> 00:36:19,520 Speaker 1: worth locking in now, so they're significantly higher than what 626 00:36:19,560 --> 00:36:22,799 Speaker 1: we locked in at this time last year, but they're 627 00:36:22,840 --> 00:36:25,640 Speaker 1: down a little. Then the fertilizer prices are down a 628 00:36:25,640 --> 00:36:28,719 Speaker 1: little from the spring high UM, so I think we 629 00:36:28,760 --> 00:36:32,080 Speaker 1: will go ahead and plan the same basic prop rotation. 630 00:36:32,239 --> 00:36:35,759 Speaker 1: I tend to plan eighty percent corn soybeans about five 631 00:36:35,800 --> 00:36:39,080 Speaker 1: percent weeks. So I say, I'm from the land of corn. 632 00:36:39,200 --> 00:36:41,040 Speaker 1: We grow a lot of corn in my area, and 633 00:36:41,680 --> 00:36:45,080 Speaker 1: that's what that's still the economics look favorable for that. 634 00:36:45,120 --> 00:36:47,000 Speaker 1: As I was looking at next year's prices, they're not 635 00:36:47,080 --> 00:36:50,080 Speaker 1: as good as this year. But there's a lot of 636 00:36:50,120 --> 00:36:53,280 Speaker 1: time yet to take advantage of maybe some marketing opportunities 637 00:36:53,640 --> 00:36:57,759 Speaker 1: between now and then. But what I have been told is, uh, 638 00:36:57,880 --> 00:37:01,480 Speaker 1: if we pay for it now, there's availability that if 639 00:37:01,520 --> 00:37:05,200 Speaker 1: you don't want to pay for it, um, you're taking 640 00:37:05,680 --> 00:37:09,359 Speaker 1: you're taking a risk um. And so those are those 641 00:37:09,400 --> 00:37:12,520 Speaker 1: are the realities we're facing right now. And how does 642 00:37:12,520 --> 00:37:16,120 Speaker 1: the rising dollar affect you? Well, it makes our exploit 643 00:37:16,200 --> 00:37:19,040 Speaker 1: makes our products more expensive in the world market. Right, 644 00:37:19,680 --> 00:37:23,919 Speaker 1: you know that when we're looking at exporting corn or soybeans, 645 00:37:24,080 --> 00:37:27,360 Speaker 1: or pork. There's all of a sudden cheaper places to 646 00:37:27,360 --> 00:37:30,800 Speaker 1: get it in the world. There's, uh, if you're China, 647 00:37:30,920 --> 00:37:34,080 Speaker 1: you can you can import corn from Brazil. Um. But 648 00:37:34,080 --> 00:37:36,759 Speaker 1: but I believe the reality has had some strength lately too. 649 00:37:36,840 --> 00:37:40,799 Speaker 1: So rising dollar makes any puts, any export or not 650 00:37:40,840 --> 00:37:45,120 Speaker 1: just agriculture at a disadvantage, you know, Brian. So I'm 651 00:37:45,160 --> 00:37:47,480 Speaker 1: trying to think, you know, if if I had a uh, 652 00:37:49,000 --> 00:37:52,239 Speaker 1: create a a version of the consumer Price Index the 653 00:37:52,239 --> 00:37:55,880 Speaker 1: CPI and call the farmer's price index for all the 654 00:37:55,880 --> 00:37:58,840 Speaker 1: input costs and all your and and you're selling costs, 655 00:37:59,320 --> 00:38:02,320 Speaker 1: it strikes is it? Uh, it doesn't sound like you 656 00:38:02,360 --> 00:38:05,040 Speaker 1: would expect that to be coming down anytime soon. Um. 657 00:38:05,360 --> 00:38:09,440 Speaker 1: You know you're talking about locking in prices for delivery 658 00:38:09,440 --> 00:38:13,759 Speaker 1: for goods next year, presumably fertilizer being the biggest. Uh. 659 00:38:14,239 --> 00:38:16,160 Speaker 1: Sort of thrown in your side at the moment. But 660 00:38:16,280 --> 00:38:19,200 Speaker 1: is that is that safe to say that? It doesn't 661 00:38:19,280 --> 00:38:22,719 Speaker 1: quite seem like inflation is cracking or cooling off from 662 00:38:22,760 --> 00:38:26,080 Speaker 1: from your perspective, given all the inputs that you have 663 00:38:26,160 --> 00:38:31,120 Speaker 1: to acquire. Yeah, that's that's correct. I do not see 664 00:38:31,239 --> 00:38:33,640 Speaker 1: I do not see our prices coming down anytime soon. 665 00:38:33,680 --> 00:38:38,000 Speaker 1: And I know farmers are concerned that again being priced takers, 666 00:38:38,800 --> 00:38:43,040 Speaker 1: that we do worry. We know that commodities tend to cycle, 667 00:38:43,880 --> 00:38:47,799 Speaker 1: and and uh, we have see a good crop worldwide. 668 00:38:47,880 --> 00:38:50,680 Speaker 1: The commodities that we sell, the corn, the soybeans, the pork, 669 00:38:50,800 --> 00:38:54,960 Speaker 1: the beef, the milk could could go down because of 670 00:38:54,960 --> 00:39:00,480 Speaker 1: of global supply, whereas I don't see an immediate allusion 671 00:39:00,560 --> 00:39:04,320 Speaker 1: to some of the Remember how base fossil fuel dependent 672 00:39:04,360 --> 00:39:07,719 Speaker 1: agriculture is both on the on the fuel side and 673 00:39:07,760 --> 00:39:13,319 Speaker 1: on the fertilizer side. I don't see a solution. So 674 00:39:13,480 --> 00:39:17,920 Speaker 1: let's just say natural gas. I do not see Europe 675 00:39:18,960 --> 00:39:22,080 Speaker 1: not coming here and buying a lot of natural gas. Now, 676 00:39:24,440 --> 00:39:26,960 Speaker 1: you tell me you watch the global markets more than 677 00:39:27,000 --> 00:39:29,880 Speaker 1: I do. I don't see anything short of regime regime 678 00:39:30,040 --> 00:39:34,200 Speaker 1: change in Russia changing the realities of the gas supply 679 00:39:34,320 --> 00:39:37,719 Speaker 1: for Europe. And if Europe needs to shop for gas here, 680 00:39:38,200 --> 00:39:40,440 Speaker 1: that is going to drive the cost of fertilizer up 681 00:39:40,600 --> 00:39:46,279 Speaker 1: period and and I don't see that changing anytime soon. Yeah, 682 00:39:46,520 --> 00:39:50,920 Speaker 1: I think that's a very student analysis of the situation. 683 00:39:50,960 --> 00:39:56,000 Speaker 1: I don't either, you know, uh, some major change of 684 00:39:56,000 --> 00:39:59,160 Speaker 1: of heart of Vladimir Putin. I think you're absolutely yeah, 685 00:39:59,200 --> 00:40:01,719 Speaker 1: I don't. I just I just see that continuing to 686 00:40:01,760 --> 00:40:06,600 Speaker 1: be difficult. We've got tariffs on right now with I mean, 687 00:40:07,040 --> 00:40:08,960 Speaker 1: so Russia could be a big supplier fertilizer too, But 688 00:40:09,000 --> 00:40:11,560 Speaker 1: who's doing business with Russia. Maybe the Brazilians will, maybe 689 00:40:11,560 --> 00:40:13,840 Speaker 1: the Chinese will, but I don't think we will. And 690 00:40:13,920 --> 00:40:16,080 Speaker 1: we've got three on one and two thirty two tariffs 691 00:40:16,080 --> 00:40:17,919 Speaker 1: on with China as well on some of the base 692 00:40:18,000 --> 00:40:22,040 Speaker 1: petrochemical UH products that we need on our on our 693 00:40:22,239 --> 00:40:25,680 Speaker 1: plant protection products. I don't see those going away. I 694 00:40:25,680 --> 00:40:28,640 Speaker 1: don't see trade with China. I mean, I think it's 695 00:40:28,640 --> 00:40:32,640 Speaker 1: always gonna be tenuous, but I sure don't see a 696 00:40:32,680 --> 00:40:35,879 Speaker 1: big breakthrough on trade there either. So that would lead 697 00:40:36,239 --> 00:40:41,839 Speaker 1: to my pessimism on input costs for American agriculture. And 698 00:40:41,920 --> 00:40:44,279 Speaker 1: like I said, Mike, if we're gonna we need more 699 00:40:44,320 --> 00:40:47,839 Speaker 1: fertilizer production in this country, if you wanted to, if 700 00:40:47,840 --> 00:40:50,279 Speaker 1: you could get the investors and you could find a 701 00:40:50,360 --> 00:40:52,200 Speaker 1: site that would allow you to do it, and you 702 00:40:52,239 --> 00:40:54,600 Speaker 1: wanted to build a plant your three or four years 703 00:40:54,600 --> 00:40:57,520 Speaker 1: before you've got product to sell, that's just the realities 704 00:40:57,520 --> 00:41:01,200 Speaker 1: of construction today. And so that's why I'm I'm I'm 705 00:41:01,239 --> 00:41:05,839 Speaker 1: I just think we're in a higher cost baseline for agriculture, 706 00:41:05,880 --> 00:41:08,560 Speaker 1: for productive especially for crop agriculture as we go forward. 707 00:41:10,400 --> 00:41:12,839 Speaker 1: Fascinating stuff, Brian. I gotta say, if someone can come 708 00:41:12,920 --> 00:41:17,200 Speaker 1: up with an Illinois version of that Iberico pork, leg 709 00:41:17,360 --> 00:41:20,279 Speaker 1: i'm a I'm a buyer. Well, you've got to let 710 00:41:20,360 --> 00:41:23,359 Speaker 1: him graze under the nut trees in Spain, I think, 711 00:41:23,440 --> 00:41:25,680 Speaker 1: is why get that taste and then mike those pigs. 712 00:41:25,680 --> 00:41:28,680 Speaker 1: Remember I told you eighteen months on a on a 713 00:41:28,680 --> 00:41:31,640 Speaker 1: commercial production facility in the United States. I think you 714 00:41:31,680 --> 00:41:34,480 Speaker 1: already stretched that out to about three years in Spain. 715 00:41:34,719 --> 00:41:38,520 Speaker 1: So their production, Yeah, it may be delicious, but it's 716 00:41:38,600 --> 00:41:42,520 Speaker 1: it's limited. Um, that's that's that's the real. Fair enough, 717 00:41:42,840 --> 00:41:45,200 Speaker 1: I will say, I I ate enough of the domestically 718 00:41:45,239 --> 00:41:48,600 Speaker 1: ground pork as well that I'm doing my my part 719 00:41:48,640 --> 00:41:50,920 Speaker 1: for the for the market. Here, bacon makes everything better, 720 00:41:51,880 --> 00:41:59,399 Speaker 1: even salad Bilda excellent stuff, right, I think. Um, we've 721 00:41:59,440 --> 00:42:02,280 Speaker 1: got just a few minutes left, so hopefully they warned 722 00:42:02,320 --> 00:42:05,200 Speaker 1: you about our little gimmick. Here. The craziest thing we 723 00:42:05,239 --> 00:42:07,799 Speaker 1: saw in markets this week. I'm dying to hear what 724 00:42:07,920 --> 00:42:10,160 Speaker 1: yours is. But let's get started with yours, what's the 725 00:42:10,160 --> 00:42:12,279 Speaker 1: craziest thing you've seen this week? So I know you 726 00:42:12,360 --> 00:42:15,160 Speaker 1: love to make fun of me for living in New York. 727 00:42:15,440 --> 00:42:18,080 Speaker 1: So my craziest thing actually is about living in New York. 728 00:42:18,120 --> 00:42:21,279 Speaker 1: So New York City, the Sublima story continues to be 729 00:42:21,360 --> 00:42:25,000 Speaker 1: the priceiest place to be a tenant and the media, 730 00:42:25,000 --> 00:42:28,480 Speaker 1: and one bedroom rent is up forty percent year over year. 731 00:42:28,600 --> 00:42:35,120 Speaker 1: Two bedroom apartments are up forty seven and Manhattan is 732 00:42:35,160 --> 00:42:39,080 Speaker 1: the worst. Monthly rent has climbed to four thousand, two 733 00:42:39,239 --> 00:42:45,399 Speaker 1: hundred and twelve dollars, up from last year. That's the average. Yes, 734 00:42:46,480 --> 00:42:50,000 Speaker 1: that is tremendous. I wonder if it it uh maybe 735 00:42:50,000 --> 00:42:52,200 Speaker 1: it dips during COVID and it's catching back up. I 736 00:42:52,200 --> 00:42:54,080 Speaker 1: don't know, I wonder if that's I think it dipped 737 00:42:54,080 --> 00:42:56,880 Speaker 1: in the beginning, and now everything is just surging. And 738 00:42:56,920 --> 00:43:00,279 Speaker 1: you hear these stories of people waiting like two or 739 00:43:00,280 --> 00:43:04,080 Speaker 1: three hours just to go and see an apartment before 740 00:43:04,120 --> 00:43:08,680 Speaker 1: they can even try to sign up for one. Everyone 741 00:43:08,680 --> 00:43:10,560 Speaker 1: bailed out on the city and now they're getting called 742 00:43:10,560 --> 00:43:12,799 Speaker 1: back to work and they have to find a place. Yeah, 743 00:43:12,840 --> 00:43:17,320 Speaker 1: but that's crazy. That is nuts, and that rent component 744 00:43:17,360 --> 00:43:19,000 Speaker 1: and you know, if you want to talk about CPI. 745 00:43:19,160 --> 00:43:21,080 Speaker 1: That rent component is one of the one of the 746 00:43:21,080 --> 00:43:23,560 Speaker 1: biggest components. Well, Brian, how about you. Have you seen 747 00:43:23,600 --> 00:43:26,520 Speaker 1: anything crazy in your world last week or so on? 748 00:43:26,640 --> 00:43:31,120 Speaker 1: Price my nitrogen for next year, next year's corn crop, 749 00:43:31,480 --> 00:43:36,200 Speaker 1: and it is up sixty five what I priced it 750 00:43:36,239 --> 00:43:40,600 Speaker 1: at for this year's crop, so six price increase. And 751 00:43:41,280 --> 00:43:43,120 Speaker 1: and Mike, if you want to pull up your Chicago 752 00:43:43,160 --> 00:43:46,120 Speaker 1: Board of Trade prices and lookout into next December, corn 753 00:43:46,239 --> 00:43:49,480 Speaker 1: is worth less than it is right now. But yet 754 00:43:49,520 --> 00:43:53,600 Speaker 1: we're dealing with price increase for the base fertilizer we 755 00:43:53,640 --> 00:43:57,480 Speaker 1: need to grow corn. Wow, and that is Does that 756 00:43:57,560 --> 00:43:59,880 Speaker 1: all sort of relate back to the natural gas per 757 00:44:00,160 --> 00:44:03,000 Speaker 1: that's a that's a big world world demand, natural gas 758 00:44:02,960 --> 00:44:07,839 Speaker 1: supply chain, transportation. Uh, all sorts of disruptions, Yes, yes, 759 00:44:07,880 --> 00:44:10,719 Speaker 1: and yes it's all the headlines are hitting you at once. 760 00:44:10,760 --> 00:44:15,720 Speaker 1: It sounds like that. Well, we wish you the best luck, Brian. 761 00:44:16,000 --> 00:44:21,120 Speaker 1: Uh and fascinating conversation. Um, you really sew yourself sure, 762 00:44:21,160 --> 00:44:24,160 Speaker 1: you're you're you could be teaching an economics class, not 763 00:44:24,239 --> 00:44:26,799 Speaker 1: just a finance class. So we really appreciate your time. 764 00:44:27,600 --> 00:44:29,719 Speaker 1: Let me hit you with my crazy thing before we leave. 765 00:44:30,239 --> 00:44:36,000 Speaker 1: Uh we do A one thing that caused inflation, uh, 766 00:44:36,320 --> 00:44:38,160 Speaker 1: or one of the issues causing inflation that a lot 767 00:44:38,200 --> 00:44:42,000 Speaker 1: of people were focused on was used car prices. I've 768 00:44:42,040 --> 00:44:45,839 Speaker 1: got a ridiculous price for a used car. Here. It's 769 00:44:45,960 --> 00:44:54,720 Speaker 1: a nineteen five ford Escort Uh. Recently went up for auction. Uh. 770 00:44:54,920 --> 00:44:57,400 Speaker 1: The trick here is that it was owned by Princess Diana. 771 00:44:58,080 --> 00:45:03,400 Speaker 1: That's that's a small ash tricks small So it was that. 772 00:45:03,600 --> 00:45:07,160 Speaker 1: I'm amazing to think that the Princess of England was 773 00:45:07,239 --> 00:45:09,879 Speaker 1: driving around in a ford Escort back in the day, 774 00:45:09,920 --> 00:45:11,279 Speaker 1: but that that's what they had her and I guess 775 00:45:11,320 --> 00:45:13,319 Speaker 1: they wanted her to look like you can be incognito 776 00:45:13,400 --> 00:45:18,480 Speaker 1: in it. Yeah, yeah, So in nineteen five ford Escort 777 00:45:18,800 --> 00:45:22,000 Speaker 1: RS turbo. Um. And I don't know if you remember 778 00:45:22,000 --> 00:45:24,640 Speaker 1: the eighties enough to remember the ford Escort not exactly 779 00:45:24,640 --> 00:45:28,200 Speaker 1: a luxury car. Let's just say this, uh sold new 780 00:45:29,080 --> 00:45:33,680 Speaker 1: in for eight hundred pounds, so about ten less than 781 00:45:33,760 --> 00:45:37,920 Speaker 1: ten thousand that today's exchange rate. So it's not a 782 00:45:38,160 --> 00:45:43,600 Speaker 1: time to play the prices precise is what do you 783 00:45:43,680 --> 00:45:50,160 Speaker 1: think Princess Diana's five ford Escort RS turbo sold for 784 00:45:50,440 --> 00:45:55,279 Speaker 1: at auction? Okay? You always, I do so poorly with 785 00:45:55,320 --> 00:45:59,200 Speaker 1: the with the car once, I'm gonna go with two 786 00:45:59,280 --> 00:46:05,000 Speaker 1: hundred and fifty thousand pounds two d and fifty thousand pounds, okay, 787 00:46:05,000 --> 00:46:08,560 Speaker 1: so that would be was a little less than three 788 00:46:08,600 --> 00:46:11,200 Speaker 1: hundred thousand US something like that. All right, Brian, time 789 00:46:11,960 --> 00:46:14,279 Speaker 1: time for you to claim victory over Vildanna here in 790 00:46:14,280 --> 00:46:15,880 Speaker 1: our little game show. What do you what do you 791 00:46:15,880 --> 00:46:19,920 Speaker 1: think the price was at auction for Princess Diana's ford Escort? 792 00:46:21,719 --> 00:46:25,080 Speaker 1: Three quarters of a million? Oh my god, this guy 793 00:46:25,120 --> 00:46:28,080 Speaker 1: is good. Well what did what did a stand musual 794 00:46:28,160 --> 00:46:30,319 Speaker 1: rookie card sew for the other day? Well? North of 795 00:46:30,320 --> 00:46:33,440 Speaker 1: a million til the car is gonna be Yeah, the 796 00:46:33,680 --> 00:46:37,080 Speaker 1: the mickey Mickey man, it was like ten million or 797 00:46:37,120 --> 00:46:41,160 Speaker 1: something like that. Seven hundred and sixty four thousand dollars. 798 00:46:42,560 --> 00:46:46,400 Speaker 1: Brian was basically a rounding error off in his guests. 799 00:46:46,719 --> 00:46:49,920 Speaker 1: That's very very that's really good. Well, I was I 800 00:46:49,960 --> 00:46:51,879 Speaker 1: was gonna guess two millions, so I guess. I'm glad 801 00:46:51,880 --> 00:46:57,240 Speaker 1: I didn't go with my first guess. Still, three quarters 802 00:46:57,239 --> 00:47:00,399 Speaker 1: of a million dollars for eighty five ford escort. It's 803 00:47:00,480 --> 00:47:02,320 Speaker 1: it's a crazy world out there. I don't know, but 804 00:47:03,600 --> 00:47:06,440 Speaker 1: is a car still functioning? You know, I believe it is. 805 00:47:06,480 --> 00:47:07,680 Speaker 1: I'd have to read the whole story. And this is 806 00:47:07,719 --> 00:47:09,960 Speaker 1: courtesy the Washington Post. And and if it was a sport, 807 00:47:10,120 --> 00:47:11,840 Speaker 1: it had a four speed, you know, it had a 808 00:47:11,880 --> 00:47:14,279 Speaker 1: manual transmission had to be so that makes it worth 809 00:47:14,280 --> 00:47:17,120 Speaker 1: more too, just on the fun factor. That fun failure, Well, 810 00:47:17,120 --> 00:47:19,000 Speaker 1: good luck finding someone who knows how to drive one 811 00:47:19,040 --> 00:47:20,520 Speaker 1: of those. These days. I think you and me might 812 00:47:20,560 --> 00:47:23,440 Speaker 1: be among the only ones left who uh, you can 813 00:47:23,520 --> 00:47:25,520 Speaker 1: drive a stick. I haven't driven a stick, I don't 814 00:47:25,520 --> 00:47:27,520 Speaker 1: think in this century. So i'd probably burn out a 815 00:47:27,520 --> 00:47:29,239 Speaker 1: clutch or two on that trying to remember how to 816 00:47:29,360 --> 00:47:32,640 Speaker 1: drive drive a manual. But Brian, good stuff. If you 817 00:47:32,680 --> 00:47:35,960 Speaker 1: ever give up the farming career, I think you could 818 00:47:35,960 --> 00:47:40,440 Speaker 1: get a job as an appraiser of crazy collectibles because 819 00:47:40,440 --> 00:47:43,720 Speaker 1: you now that. Well it's been it's been nice getting 820 00:47:43,760 --> 00:47:46,080 Speaker 1: to know both of you. Thank you for this opportunity. 821 00:47:46,160 --> 00:47:49,040 Speaker 1: I've certainly enjoyed it, and maybe we can do it 822 00:47:49,080 --> 00:47:51,879 Speaker 1: again sometime. I would love that. Brian, thank you, thank 823 00:47:51,920 --> 00:48:02,200 Speaker 1: you for joining us. What goes up, we'll be back 824 00:48:02,200 --> 00:48:03,960 Speaker 1: next week and so then you can find us on 825 00:48:03,960 --> 00:48:07,200 Speaker 1: the Bloomberg terminal website and app, or wherever you get 826 00:48:07,239 --> 00:48:09,839 Speaker 1: your podcasts. We love it if you took the time 827 00:48:09,880 --> 00:48:12,640 Speaker 1: to rate and review the show on Apple Podcasts so 828 00:48:12,680 --> 00:48:15,120 Speaker 1: more listeners can find us. And you can find us 829 00:48:15,160 --> 00:48:19,000 Speaker 1: on Twitter. Follow me at reag Anonymous. Bill Donna Hirich 830 00:48:19,120 --> 00:48:23,040 Speaker 1: is at Bildonna Hirach. You can also follow Bloomberg Podcasts 831 00:48:23,080 --> 00:48:27,120 Speaker 1: at podcasts. What Goes Up is produced by Stacy Wong. 832 00:48:27,480 --> 00:48:30,720 Speaker 1: The head of Bloomberg podcast is francesco Leavie. Thanks for listening. 833 00:48:30,719 --> 00:48:31,520 Speaker 1: To see you next time.