From Our Side of the Fence

EMCC Owner/Partner

Hard to imagine for me that June is almost over and Fourth of July is right around the corner. Last several weeks for me have been consumed with moving. For those of you that don’t know and who are familiar with Centralia, I have moved into the family home place. The big red house with the big red barn on the east edge of Centralia has been renovated and modernized.

The last 2 1/2 years, Kelly and I’ve lived in the first farm house south of Centralia that I purchased in 1987. Of all the places I’ve lived, it is truly the most serene and has the most beautiful sunsets of any place I’ve ever been in the world. Interestingly that farm is one of the highest points in Boone County and rain that falls on the south half of the farm flows to the Missouri River and the rain from the north half eventually flows to the Mississippi.

The only drawback to living there is the house is only 960 square feet. You can only use words like quaint and cozy for so long before you start using words like cramped and cluttered. Rather than building a home in this inflationary environment, my last few weeks have been consumed with moving from that first 960 square-foot home, like my father and grandfather before me, to what l believe will be my last home.

Comically, the last thing I wanted to do was move into a construction site, but as I left the house last Thursday there were six Hispanic roofers, four carpet layers, one contractor, a plumber and electrician in or on the house and there was another half dozen people in the back pouring concrete. I’m very much looking forward to finally being settled.

As I write this, thunderstorms are running across the Midwest. Here in Centralia we’ve had over 7 inches of rain last week and it looks like we are getting two or three more tonight. The corn fields will have water standing in them from here to Bowling Green as I drive to the sale today. Now all we need is a little bit of heat to make that corn pop. With the improving crop growing, corn futures have plunged, but as of yesterday’s local cash market I haven’t found anyone willing to sell corn for less than seven dollars per bushel. Even though things look great today, it is a long time till harvest.

I am still of the belief that the Chinese are in the process of buying a substantial amount of American grain either to rebuild their depleted reserves or because they having trouble in their crop growing region again this year.

I’ve heard it said that secrecy is the weapon of people with ill intent. This may be the case with the Chinese communist party once again because their crop reporting agencies, both private and government, have all been shut down so there is no information flowing out of China as to the progress of their agriculture production this year. One would think that if it was a booming positive situation, they would not be shutting off that information.

Speaking of China, secrecy and ill intent each week that goes by Dr. Fauci becomes a bigger fraud and our government becomes complicit in an epic coverup that put politics above people. The truth will eventually find the light of day but I’ve grown skeptical that anyone will ever face prosecution.

BTW if you remember early in the pandemic, Australian researchers advocated the use of ivermectin as a cheap effective drug. Recent studies reported in a Zero Hedge article says that ivermectin reduced the dangerous symptoms and death by 68%. I think I’d rather take my chances with apple flavored horse paste than an experimental vaccine. Of course, if I was in a higher risk category or interacted with high-risk individuals, I think it would be prudent to be vaccinated.

This month’s patriotic word of encouragement happens to be from a Republican. The “word” comes from a 3-minute speech given by the Lieutenant Governor of North Carolina at the NC GOP State Convention in June 2021. Please look it up and listen to it, twice. The first time alone, the second time with your kids and grandkids. It is a great speech…
Here’s a link:

This month’s courageous patriot award goes to West Virginian Democratic Senator Joe Manchin. He courageously broke ranks with the Pelosi radicals and stood up to stop changes to Senate rules that would have allowed the minority party to be steamrolled by whichever party is the majority. Joe Manchin put his country and his people in his state above Washington politics and his personal gain. With millions of people like these two men, we’ve still got a chance.

Can the Hispanic community save America? As we know, the current administration has opened the floodgates of illegal immigration from predominantly Central and South America. All things being political, I believe the reason this massive immigration is being encouraged is because historically first-generation Hispanic immigrants vote overwhelmingly for Democratic candidates. There was however an interesting mayoral election in McAllen, Texas this month. McAllen is a city of 143,000 that is 85% Hispanic, which Hillary Clinton carried by 40 percentage points. The reason I find this interesting is because apparently there is a realignment of Hispanic voters moving away from liberal radical Democrats to more conservative Democrat and Republican candidates. Notably many immigrants are escaping socialist hellholes, so ironically this large influx of immigrants being allowed and encouraged by the Democratic party may actually be importing conservative Republican voters. What a hoot if that proves to be true.

The buzz in the cattle auction circle is the sky-high prices from western markets, especially Bassett, Nebraska.

Interestingly, I overheard the explanation of these prices. A side effect of our government’s money printing has caused the American dollar to lose value compared to foreign currencies – in this case the Canadian dollar. Because the Canadian dollar is “stronger”, the Basset cattle can be purchased by Canadians effectively at a 20-25% discount. This month, 80% of the Bassett offering was purchased and hauled to Canada to be fed and either processed and consumed or exported from Canada or sent back to the USA.

Alarmingly if a foreign group can come here and buy our cattle with a 20 to 25% discount, what else could foreign entities buy here at a discounted rate? Also, interestingly, this is exactly the opposite scenario when foreign cattle flooded from Canada and Mexico into the border states due to an exchange rate that favored the buying power of the U.S. dollar in the 1970s.

In this month’s cattle business, the biggest story is of course the Senate ag committee hearing which I think will be covered in other areas of this month’s paper adequately. Our industry is now filled with hope again, which translates into optimism and higher prices. I am often scolded for waiting till the last minute to write my article, but this month is a good example of why writing early would not have worked. It is truly amazing how much a little time, a little rain and a lot of optimism can make a difference in the cattle market over less than a two-week period. Generally speaking, cattle are worth $100 a head more than 2-3 weeks ago.

I’ve received some good-natured ribbing for my opinion that corn is at the lows for the year right now, but let me explain what brought me to that conclusion. The USDA March 31 planting intentions report concludes that there will be 91.14 million acres planted in the United States this year and the average yield is expected to be 179.5 bushels per acre so the total will be a whopping 16.63 billion bushels. This would surpass the 2017 record yield of 176.6 by essentially 3 bushels per acre.

So, here’s the problem. Iowa is the number one corn growing state and Nebraska and Minnesota come in third and fourth respectively. There’s never been a national record corn production ever set without the state of Iowa also setting a state record. Currently those three states are experiencing some very dry conditions over large portions of the states. So at least one of two things will have to happen to achieve a 16,630,000,000 bushel national yield. The USDA June 30 acreage report could come in with many more acres planted or the drought could subside across the entire corn belt and at this point I think catching up would be possible. Time will tell.

Not trying to be pessimistic, but many times in the last three years, I’ve seen optimism lead to some financial wrecks in the cattle feeding business. If science really wanted to do something for the cattlemen, we should come up with a vaccine to prevent optimism. In the past, I too have been infected with optimism, but I think repeated infections have led me to be partially immunized and completely cynical.

That’s it for now… see you at the auction.