Placeholder Image

Subtitles section Play video

  • Coming up on Market to Market -- Merger mania

  • prompts a summons from Washington.

  • The Secretary spends a little time in the hot

  • seat.

  • And heavy rain stops harvest in its tracks.

  • Those stories and market analysis with Sue Martin,

  • next.

  • Funding for Market to Market is provided by

  • Grinnell Mutual.

  • You think differently about a customer when you

  • stand in the middle of his dreams.

  • We work to make sure you get covered right.

  • Grinnell Mutual -- a policy of working

  • together.

  • Information on finding an agent near you is

  • available at grinnellmutual.com.

  • This is the Friday, September 23 edition of

  • Market to Market, the Weekly Journal of Rural

  • America.

  • Hello, I'm Mike Pearson.

  • Harvest machinery has been temporarily sidelined in

  • some parts of the grain belt but financial

  • planning for next season has already begun.

  • Like predictions of record crops, rural America waits

  • for economic answers in a money lending season of

  • uncertainty.

  • -- With housing starts down 5.8 percent in August

  • - and the inflation rate languishing below 2

  • percent - the Federal Reserve Board declined to

  • raise lending rates.

  • The result leaves many speculating what the near

  • future holds.

  • No change was seen as good news by Wall Street as the

  • Dow Jones Industrial Average finished the week

  • on an up-tick.

  • Placing the anticipated shake-up over lending

  • rates on hold shifted attention to fallout from

  • agricultural mergers.

  • Recently, the Canadian companies Potash

  • Corporation and Agrium announced they were

  • combining forces to create the largest fertilizer

  • company in the world.

  • That marriage only amplified concerns over

  • consolidation and was among the reasons several

  • Titans of Agriculture were requested to appear before

  • the Senate Judiciary Committee.

  • Paul Yeager reports.

  • Representatives from five of the six biggest

  • agriculture companies appeared together on

  • Capitol Hill this week.

  • The leaders were asked about the big topics of

  • competition, jobs, and innovation.

  • The "Big Six" of biotech seed would become the "Big

  • 4" if regulators approve Bayer's $66 billion buyout

  • of Monsanto, China National Chemical or Chem

  • China's $43 billion purchase of Syngenta and a

  • $59 billion deal between Dow and DuPont Pioneer.

  • James C.

  • Collins: "Bringing together the innovative

  • engines of DuPont and Dow into one company, fully

  • focused on agriculture, allows us to expand the

  • choices and the competitive price values

  • that farmers demand."

  • Robb Fraley: "We're witnessing a new era in

  • agriculture that's a result of the advances in

  • biology and data science.

  • Silicon Valley is digitizing farming around

  • the world, and breakthroughs like gene

  • editing are opening up a whole new world of

  • possibilities in plant biology."

  • Tim Hassinger: "Combing our R and D capabilities

  • will enhance our ability to innovate and create

  • values for farmers.

  • An innovation driven company creates

  • competition."

  • Jim Blome: "We expect to advance our digital

  • farming capabilities and strengthen our focus on

  • new product development across seeds, traits and

  • crop protection."

  • Critics contend the biggest three remaining

  • companies would control 80 percent of the corn seed

  • sales and 70 percent of the global pesticide

  • market.

  • Roger Johnson: "The damaging consolidation is

  • occurring at a time when farmers are struggling

  • with depressed profitability after seeing

  • an approximate 50% decline in most commodity prices

  • over the past three years.

  • Clearly the nation's anti-trust enforcement has

  • failed farmers and consumers."

  • Diana Moss: "Any claims that the deal will simply

  • package complimentary assets should be viewed

  • with some skepticism.

  • The companies own documents indicate their

  • own R and D pipelines compete head to head with

  • overlaps in R and D for traits, seeds and crop

  • protection.

  • Much like in pharmaceuticals,

  • maintaining competition in standalone parallel R and

  • D ensures strong incentives to continue to

  • innovate."

  • Sen.

  • Grassley: "To me, it looks like this consolidation

  • wave has become a tsunami."

  • Iowa Senator and committee chair Charles Grassley

  • cited data from Iowa State University revealing

  • collective cost of seed, chemicals and fertilizer

  • for an acre of soybeans has gone up 94 percent

  • over the last 20 years.

  • Grassley, also a farmer, said the collective

  • industry has produced greater innovations and

  • yields, but questioned the cost.

  • Sen.

  • Charles Grassley: "However, when does the

  • size of companies and concentration in the

  • market reach the tipping point, so much that a

  • market becomes anti-competitive?"

  • Cotton farmers also could be faced with steep price

  • increases on seed if a recent Texas A&M study

  • holds true.

  • The research revealed a possible 18 percent hike

  • if the mergers move forward while corn and

  • soybean seed prices would increase around 2 percent.

  • For Market to Market, I'm Paul Yeager.

  • Secretary of Agriculture Tom Vilsack met with the

  • Senate Agriculture Committee this week for an

  • annual checkup of sorts.

  • The topics discussed ranged from budgets to

  • water quality.

  • Colleen Bradford Krantz explains.

  • Secretary of Agriculture Tom Vilsack, wrapping up

  • what is expected to be his final months of an 8-year

  • stretch on the Obama administration cabinet,

  • urged Senate leaders this week to do a better job of

  • studying the needs of the nation's shrinking pool of

  • farmers before fixating on budget cuts.

  • Tom Vilsack: "If you look at every hot spot in the

  • world today, I think most, if not all of them, do not

  • have a functioning agricultural economy and

  • have a lot of hungry people.

  • So if we are serious about protecting our own people,

  • if we are serious about making sure the world is a

  • safer and better place for our kids and grandkids,

  • then we have to understand the role agriculture in

  • this country and agriculture around the

  • world will play in providing that level of

  • security."

  • Several senators, while praising Vilsack's tenure,

  • said the nation's farmers are growing increasingly

  • leery of governmental involvement in their

  • lives, particularly when it comes to the

  • Environmental Protection Agency.

  • Sen.

  • Thom Tillis: "The issue that comes up every single

  • time I meet with these farmers is the uncertainty

  • created by regulation - either the burden by

  • existing regulations or the threat of other

  • regulations that could be very harmful to the

  • industry."

  • Senator Pat Roberts, the chair of the Senate

  • Agriculture Committee, said new EPA rules

  • defining the "waters of the U.S."

  • under the Clean Water Act had an exemption for

  • "common farming practices" but the sentence was

  • followed by 88 pages of exceptions, explanations

  • and definitions.

  • Sen.

  • Pat Roberts: "That's why a lot of folks that I

  • represent feel ruled not governed.

  • And they get really upset."

  • While Vilsack said he won't speak on behalf of

  • the EPA, he has encouraged the agency to meet the

  • farmers whose livelihoods may be affected by their

  • rules.

  • Tom Vilsack: "We don't define the problem before

  • we define the solution, and we don't educate

  • people about what we are trying to do before we do

  • it.

  • So there is a natural reaction."

  • For Market to Market, I'm Colleen Bradford Krantz.

  • Harvest is underway in earnest across the

  • Midwest.

  • Most states are on track to bring-in the projected

  • record 15.1 billion bushels of corn and 4.2

  • billion bushels of soybeans.

  • However, field work in some regions of the upper

  • Midwest was stopped in its tracks.

  • It's a soggy start to fall for several Midwestern

  • states, where heavy rain has flooded homes, closed

  • major highways and stranded motorists in

  • Minnesota, Wisconsin and Iowa after nearly a foot

  • of rain fell in several location of the Tri-State

  • area.

  • The rains couldn't have come at a more inopportune

  • time.

  • Combines will be delayed in several dozen upper

  • grain belt counties as farmers had just begun

  • what is expected to be a record large crop.

  • A state of emergency was declared by Gov.

  • Scott Walker for 13 western Wisconsin counties

  • that have been drenched by torrential rains since

  • Wednesday.

  • The Wisconsin National Guard is providing

  • assistance to those affected by the disaster

  • which has caused widespread flooding and

  • mudslides in the region, including one death.

  • Volunteer crews in several southern Minnesota towns

  • were building sandbag walls to hold back rising

  • floodwaters.

  • Residents in Saint Clair received 14 inches of rain

  • in 48 hours.

  • Sections of several area roads were washed away in

  • the deluge.

  • And some of the residents in the northeast Iowa town

  • of Greene were ordered to leave as the nearby Shell

  • Rock River roared out of its banks.

  • About 60 homes in the northeast Iowa town took

  • on waist-deep flood waters.

  • Interview: The weekend forecast is for more rain

  • in the region, so fields that escaped the first

  • round of moisture may find themselves moist by

  • Monday.

  • For Market to Market, I'm Peter Tubbs Next, the

  • Market to Market report.

  • Inclement weather across all of the Americas and a

  • weaker dollar laid the groundwork for volatility

  • in the commodity markets.

  • For the week, December wheat was flat and the

  • nearby corn contract, despite a midweek move

  • higher, also finished flat.

  • Strong soybean sales, strong export sales were

  • not enough to outweigh higher yields as the

  • October soybean contract lost 11 cents.

  • October meal declined $10.40 per ton.

  • In the softs, December cotton added $2.79 per

  • hundredweight.

  • Over in the dairy parlor, October Class III milk

  • futures lost 50 cents.

  • The livestock sector was under pressure as the

  • October cattle contract fell 60 cents.

  • October feeders lost 57 cents.

  • And the October lean hog contract dropped $1.48.

  • In the currency markets, the U.S.

  • Dollar Index lost 66 cents.

  • Crude oil advanced 86 cents per barrel.

  • Gold rose $31.50 per ounce.

  • And the Goldman Sachs Commodity Index gained

  • more than 2 points to finish the week at 351.20.

  • Pearson: Here now to lend us her insight on these

  • and other trends is one of our regular market

  • analysts, Sue Martin.

  • Sue, welcome back.

  • Martin: Thank you, Mike.

  • Pearson: This has been a week of stability in the

  • wheat markets.

  • We saw some export news come out.

  • Can you talk about where you see this wheat market

  • headed?

  • Martin: Well, I think the wheat market is very

  • oversold, very cheap, it may still move sideways

  • for a little bit longer but all in all the funds

  • are heavy short, near record short and so what I

  • find is when a market moves sideways for a long