Pearson: This is the Friday, June 7th, 2013 version of the Market Plus segment.  Joining us now is Don Roose.  Don, welcome back.

Roose: Thank you.

Pearson: We've got a lot of questions and not surprisingly a lot of them are concerned with the effects this wet weather is going to have on acres planted.  To begin with Martin in Carroll, Iowa is asking, is there a possibility we could see a larger than 2.5 million acre shift from corn to beans?  And what effect would that have on Dec corn prices as well on November bean prices?

Roose: Yeah, and those are good questions.  But I think when you look at it right now the trade is trying to dial in that we're going to have about a 2 to 3 million acre loss and those are very much a big question mark because you have a lot of things that you have to think about.  One was the 97.3 million acres that the government used in March.  We've seen other years where that hasn't been and so consequently what is your real starting number?  And then this is a year where producers are really going to want to plant for insurance or they're going to want to plant if possible.  But I think realistically probably the corn acres are going to be down 2 2.5 million.  Historically 50 of those acres go to soybeans, the rest go to then plant.  We did have 2011 where actually, we actually only went down 300,000 in that year.  But as far as the price effect you can go all, with that type of 2.5 million acres down and even a yield that goes from 158 to 150 you still have about a 1.2 billion carryover so we've got a big cushion this year like we haven't had for a long time with world competition.

Pearson: Alright.  Now as a follow up here, we're talking prices, Lee is asking, we've heard for the past six months as we've anticipated record crop, $4.00 corn is in the cards.  Looking at this spring's weather, is $4.00 corn still in the cards? Or have we bypassed that with the troubles we've had so far this spring?

Roose: I think what it really means is at one time I think that was the downside potential, you know, if we would really get a negative situation.  It still could be, very much is going to be dependent on the weather.  But you've got a number of issue now.  One, we don't have the acres.  We've got, you know, the yield is very much in doubt.  We're going to have to look at the heat this summer.  41 of the corn was planted in one week this year so it's going to be bunched up on pollination then you're going to have to worry about the cold weather in the fall here.  So I think realistically take it a step at a time.  I think you're going to hold about $5.00 to $5.20 going into the June 28th acres report, stocks in all positions report and then after that we'll see what the yield does and watch the crop conditions very close each week.

Pearson: Now as we get close to that June 28th report, since there is so much variability, we talked on the show about using those relatively new short dated options on the board.  Now those were created to help us negotiate massive reports like that.  Another good time to use them?  Can you elaborate a little bit on the advantage of a short-term futures contract?

Roose: Yep, it's a short dated option and then come on the board on corn in January and what you're really doing is you're trading new crop but you're trading them like there's only a May, July and September so they go off the board during those timeframes as a normal option would.  But what it is, it protects your new crop corn and beans at the same time the cost because you don't have as much time involved is a lot less. So they're a new product and I think they're a good product and they're to be used in risk management just like a year like this year.

Pearson: Alright.  Now, speaking of risk management, as we take a look at livestock producers, would this be a good time for -- Denise is asking, should producers be locking in feed needs now?

Roose: I always tell producers what we really do is look at the crush and if it is a profitable crush I certainly would.  But there's always a good time to lock in feed needs, it's just a matter of what kind of management to use.  But if you're uncertain I think this is still an ideal time to lock in next year's supply.  For example, like buying a call and then maybe selling a call above a window contract and then selling the put below it.  You can do a lot of those things where it gives you a dollar up, a dollar down for ten cents.  So I would use -- I do think with the uncertainty that we have as soon as you see some caution I think you should be looking to lock in.  It's just a matter how tight.

Pearson: How tight and how far out in the future you would be prudent to go depending on your operation.

Roose: Yeah, I think all of those things, you know, make sense.

Pearson: Alright.  Now, another question we've got and you touched on it briefly, maybe we can go into a little more detail, as we look at, again like you mentioned, 41 of the crop planted in a week, after the June 28th report, as we get into the meat of summer, when will the market start to really add the weather premium to the corn market regarding that pollination?  What should producers be planning for as we get into the heat of summer?

Roose: Well, we're going to have -- this is going to be a really uncertain year because I think we probably have risk premium in the market right now for a lot of that stuff, Mike, to be honest with you.  I think, you know, we're probably trading realistically today, even though we're sitting here close to $5.60, we're really probably trading historically a $4.80 to $5.00 board eventually in the fall.  But it's really probably going to be the August crop report, it's going to be our first surveyed crop report and that's probably going to be the first time you're going to have a better handle on what your production and your acres are going to be.  That's a long time out there, it's a lot of uncertainty, you're going to have to go through the pollination in July but I would say that will be the report that will key us.  But we're going to have a lot of volatility this year.

Pearson: Alright.  Now, looking back to livestock, particularly in the hog market, with that bump we saw this week, Tim in Crookston, Minnesota is wondering if we could talk a little bit more about Smithfield, the Chinese company buying Smithfield.  Would that have had an impact on pork prices this week?  Or is that going to have long-term price impacts do you think on the U.S. pork market?

Roose: Well, I think one thing we know we're not certain but we do know that the head people of Smithfield did say that this isn't anything that has been just came out in a week.  They said they've been working on it for seven years and that's why they probably have pushed over to ractopamine and some of the things that are friendly to exports to China.  But I think it could go both ways.  I do say one thing even though a Chinese company buys a United States company, we still are in control of all the regulations and all of the tariffs.  So we're really still in control.  But there's no doubt about it, right now you'd have to say it's positive from an export standpoint.  So I would view it as a positive.

Pearson: Certainly, providing a tunnel into China basically for U.S. meat potentially.

Roose: Yeah, most definitely.  So I think it's a good thing and ownership of it, I mean, is another question but I think, I don't think that hurts anything either.

Pearson: Alright, Don, before we let you go, as we get ready to close out the weekend what should producers be most concerned about or prepared for as we head into next week?  What are your thoughts?

Roose: As far as a grain producer?

Pearson: Yes.

Roose: I think a grain producer we're going to keep your eye on the sky and then I think the other thing is even if we go into this last week it was a cool, wet week, we were down 8 cents on new crop corn, so it's more important to see how you react than the news that you see.  So that is another thing so I think it tells you the maturity of a market.  Watch corn spreads, new crop corn spreads razor close because if they start to come in, last year the Dec-July corn spreads, Dec '13, July '14 inverted 25 cents so that is going to tell you, that's going to be your real key.

Pearson: King of an indication of what to expect.

Roose: Yep.

Pearson: Well thank you so much, Don, really appreciate you being here with us today.  And thanks to all of you for sending in your questions via Facebook and Twitter.  We really appreciate it.  Please continue to do so.  Thanks for watching and have a great week.

While dry conditions reduce winter wheat production this year, multiple years of drought have forced many cattle producers to cull their herds.  Nationally, the U.S. cattle herd currently stands at 96 million head, making it the smallest since 1952.

Now that seems like a textbook case for higher prices, but there’s a limit to how much consumers will pay and plenty of competition from other sources of protein.  Per capita beef consumption has declined for at least two decades. And slumping demand has resulted in a 10 percent decline in futures prices this year – despite historically tight supplies.

Colorado has the seventh-largest cattle herd in America and with annual cash receipts of more than $3 billion, the industry accounts for nearly 50 percent of the state’s agricultural sales.  But, as David Miller discovered this spring, persistent drought is weighing heavily on Rocky Mountain Ranchers.   

Tim Canterbury runs a cow/calf operation in the high country near Howard, Colorado. Canterbury, along with his son Ryan, run about 300 cows and their calves on the family ranch situated along the Sangre de Christo Mountain range.

Normally, the cattle would be eating meadow grasses, but the drought gripping Colorado for the past two years has reduced new growth. As the arid conditions drag into a third year, Canterbury is digging into his reserve of hay that his son and brother Bill harvested last season. In a good year, the trio would roll-up nearly 1,500 bales but the extreme lack of moisture cut that number to just 300.

Tim Canterbury, Canterbury Ranch: “Everybody else is in the same boat and trying to figure out how to survive. So we’ve had to make some really, really drastic management choices, not that we wanted to, but because of necessity we just had too. So I guess the trigger point was last fall. We didn’t have the hay, had to purchase hay.”

While the 5th generation rancher and his son each manage separate herds they were faced with the same problem of high feed costs and lack of moisture. The issue forced the Canterbury’s to sell off nearly half of their stock, culling at least 280 head between both ranchers.

While an easy fix might be waiting for things to pencil-out and buy back animals there is a catch. The cattle the Canterbury’s need for replacements must be bred for high altitude. Animals without the right genetic makeup run the risk of suffering from bovine high mountain disease, more commonly known as “brisket disease.” At heights of over 3,000 feet, fluid can form around a cow’s heart, potentially killing the animal. That concern is foremost in their minds when they select replacement cattle because a good share of the 35,000 acres of pasture the Canterburys either rent or own is at 7,500 feet above sea level.

Tim Canterbury, Canterbury Ranch: “We can’t just go down to the market and buy cows and replace cows. It’s a little tougher out here, and you have to have that, be able to find those high altitude cattle or hold back heifers and come back. When you’ve sold, 45 percent or 50 percent of your cow herd it’s going to to hurt and it is definitely going to take us time to get back.”

Last year, Canterbury realized he might be forced to sell-off some cattle. Insufficient meadow grass, a smaller than normal hay crop and reduced grazing days on Bureau of Land Management meadows made it clear changes would have to be made. The issue has forced family members to think about taking off-ranch jobs for the first time in many years.

Ryan Canterbury, Canterbury Ranch: “Due to the drought I had to get a second job and some days a third.  I work in the construction business now.  Bought a building, a lot of excavation work, things of that nature because I just don't have the amount of cows, I've had to sell a lot of cows in this drought.”

Last fall, the Canterbury’s sold some of their cattle. They received $70 per hundredweight for the best animals but many sold for $60 per hundred, a price lower than what the senior Canterbury felt the animals were worth. Either way, the decision was clear cut.

Tim Canterbury, Canterbury Ranch: “I guess we’ve got to start looking at the balance sheet. Obviously, as you know, my son has had to take an outside job and I’ll tell you what, I’m right on the brink of it. You know, you get under 100 head of mother cows and it gets really tough to pay the bills. The bills for this ranch that normally has 300 mother cows on it are the same, it doesn’t matter whether there’s 300 mother cows or 100 mother cows, the bills are the same.”

The slump in the cattle market has impacted ranchers in all phases of beef production, including those who breed top genetics in to replacement cattle. Mitch Rohr is the Chief Operating Officer for the Spruce Mountain Ranch in Larkspur, Colorado.

Mitch Rohr, Spruce Mountain Ranch: “We’re not experiencing a drop in price. In fact, in 2012, our average price per animal sold was higher than we’ve ever had. However, we didn’t sell as many. So people are very limited, the cow calf ranchers, farmers, they’re limited on their production because of the cost, the high hay cost, the high grain cost and no pasture. And it’s hard to look a year down the road or two years down the road and say, ‘ We need to survive this, we really need to work through how we do this so we can capitalize on this market down the road.”

Spruce Mountain’s primary business is selling registered Black Angus replacement cattle to cow-calf operations. Along with choosing blue-ribbon traits, Rohr keeps a close eye on the habits of beef consumers.

Mitch Rohr, Spruce Mountain Ranch: “What I'm seeing being around a metro area is we're seeing a lot of families still go out to eat, still order steak, beef, hamburgers, what have you.  We're just not seeing them quite as often.  Maybe they used to go out two or three times a week, now they're going out once a week.  They will spend a little more that ‘one-time’, based upon our surveys, and the data that we've been able to compile.  However, when you go back to the beginning of the beef chain, what I'd consider the seed stock producer, that affects us indirectly so we have to kind of watch those forecasted markets and say, okay, how do we improve what we do, less input costs but still achieve that output and create that revenue for our operation.”

Spruce Mountain started its Angus operations six years ago. Much of the herd is raised at the East Ranch, near Kiowa, Colorado about 45 minutes from the home office. For several years, forage needs for the 1,000 head of cattle were handled within an hour of the 16,000 acre operation. Now Rohr is forced to travel more than 10 times that distance to find hay.

 Mitch Rohr, Spruce Mountain Ranch: “The past couple of years we've seen the prices go up, not so much that you can't find the hay and not so much that the price of the hay is so high tat you can't afford it, it's the fuel cost, it's the trucking.  We have to reach farther out.  Instead of going 50 or 60 miles to help bring in some supplemental hay resources we have to go out 500, 600 miles.”

Rohr is concerned about the future and is working hard to avoid reducing numbers in a herd that he has invested time, hard work and tons of feed.

Mitch Rohr, Spruce Mountain Ranch: “...nobody likes a quitter.  So I'd say right now we're not even looking down that road.  We've got to stay positive.  There's a lot of people that look from the outside in whether it be from a metro area, whether it be from a rural area, they look in and they want leaders and we're trying to step up to that point and also help equip others with our genetics to be in the forefront of that.

Rohr and Canterbury remain optimistic and both men are conscious of the legacy they will leave behind.

Tim Canterbury, Canterbury Ranch: “You know, this ranch has always been my life.  Born and raised here.  It's what I love to do.  It was opportunity, you know, for me and I want to pass that opportunity to my sons. I have two sons  ... And I'm not saying that they have to stay on this ranch but I'm saying I want to give them the opportunity to make their own decision whether this is what they want to do or not.”

For Market to Market, I’m David Miller.

The government released its latest jobs report Friday and the numbers boosted prospects of continued economic recovery. 

According to the Labor Department, U.S. employers added 175,000 positions to their payrolls in May, indicating that businesses continue to hire at a modest but steady pace despite government spending cuts and tax increases.

The unemployment rate, however, ticked up one-tenth of a point to 7.6 percent.  But, that was because more people began looking for work and the numbers suggest about 75 percent of them actually landed jobs. 

The labor report was cheered on Wall Street where the Dow gained more than 200 points on the news. 

The week began on a bullish note Monday, when the automobile industry reported U.S. consumers bought 1.4 million vehicles last month -- up 8 percent from last May.  Much of the move was powered by trucks.  And sales of full-size pickups increased 26 percent over last year. 

Many of those trucks, of course, are working hard in rural America, where weeks of cool and wet weather have complicated life for growers.  And -- in what’s beginning to sound like a broken record -- the big story in farm country yet again this week is Mother Nature.

Heavy rains in the Corn Belt are starting to cause major problems downstream. Areas still recovering from earlier spring flooding are back in the trenches again, hoping for drier conditions.

In the Missouri town of West Alton, a makeshift levee was breached early this week and now residents of the town of 570 are on high alert. West Alton was nearly swept away 20 years ago in the great flood of 1993.

Those who live in the community close to the confluence of the Missouri and Mississippi River are preparing for the worst.

James Dickerson / West Alton Resident: "There's a culvert over here that's breached and it's coming in through the culvert, and they said don't be alarmed right now, but definitely be on standby.”

The community’s make-shift levee has officials with the U.S. Army Corps of Engineers monitoring the area north of St. Louis closely.

Matt Cosby / U.S. Army Corps of Engineers: "The entire levee system has water on it from the Mississippi side and the Missouri side, both of those areas are concerning. We never want water on a levee. That's why they're there.”

At least four locks were closed this week because of the high water, but recent rains have offered some relief from the most arid conditions in half a century.

The latest Drought Monitor from the University of Nebraska reveals nearly 55 percent of the contiguous United States is in one of five stages of drought. That’s the lowest level in almost 17 months.

As the rain falls in portions of the Grain Belt, crop progress continues to lag.

USDA’s weekly report indicates corn planting is 91 percent complete, trailing the 5-year average by four percentage points. The condition of the emerged corn is 93 percent in the fair to excellent categories.

Soybeans are significantly further behind schedule. USDA pegs 57 percent of the crop is planted, well off the average pace of 74 percent.

Spring wheat planting also is behind schedule. 80 percent of the fields have been sown, 12 percentage points below the 5-year average. Winter wheat, however, is showing the effects of previously dry conditions, and 68 percent of the U.S. crop is rated fair to very poor.

Grain prices were mixed this week as wheat prices trended lower while old crop corn futures eeked out a modest gain.  For the week, July wheat lost nearly 10 cents, while the nearby corn contract moved about a nickel higher.  Old crop soybeans also rallied as the July contract gained 19 cents. Nearby meal prices followed suit with an upward move of $5.25 per ton.  In the softs, cotton broke out of its slump as the December contract posted a weekly gain of $3.12 per hundredweight.  In the dairy market, June Class III milk advanced by nearly 30 cents while July contract gained 27 cents.  Over in livestock, the August cattle contract lost $1.17. August feeders were off nearly 60 cents. But the July lean hog contract gained $2.70.  In the financials, the Euro gained 252 basis points against the dollar. Crude oil advanced by more than $4 per barrel. Comex Gold declined by 10 per ounce. And the Goldman Sachs Commodity Index moved nearly 20 points higher to settle at 632.80.

Pearson: Here now to lend us his insight on these and other trends is one of our regular market analysts, Don Roose.  Don, welcome back.

Roose: Thank you.

Pearson: We mentioned there in the lead up we saw the dollar come under pressure this week.  Can you talk to us a little bit about what is driving that?  What did we see in the currency market that caused that to happen this week?

Roose: Well, one thing, the dollar had a lot of strength for a long time and I think a lot of it goes back to the interest rates.  It seems like, you know, when we think the interest rates are going to start to move higher the dollar comes under some pressure and vice versa when it happens the other way.  So I think it's that but still the dollar, although it's at a low level, still the best of the worst currency.

Pearson: Okay.  Alright.  Now let's take a look at wheat.  We've seen the U.S. wheat market, U.S. wheat producers under a lot of pressure with frosts and floods and all these negative things.  Talk to me a little bit about new crop wheat production.  What do you expect there?  Where are prices going to head?

Roose: Well, the big problem that you have with the wheat market is not in the U.S. market.  U.S. market, you know, our supplies are going to be down, our production is going to be down but it's more about the world production.  We've got Canada, we've got Australia, Argentina, the EU, the Black Sea area all are going to have increased production so that's the issue that we have and consequently, for example, hard red winter wheat, you know, a few months back was $9.50 a bushel, now it's $7.50.  It's harvest time, we've had a lot of problems but we're still under some pressure.

Pearson: Advice to producers out there looking at this situation?

Roose: Well, unfortunately, I mean, when you look at the wheat market from a global standpoint while we've got tighter supplies here we've got excess in the world.  And so our advice actually is to go to work and take advantage of some of the carries in the market and at these areas I would look at selling March '14 wheat in Chicago and Kansas City and see if we can come under pressure and maybe move down somewhere in the 50 cent a bushel area from here.

Pearson: Okay, start planning ahead for next year and be proactive.

Roose: Yeah, and I think it's really we're coming into harvest, you know, regardless of the size we're still going to have a harvest here and around the world we're going to have a harvest.  So I think it's more that time of year than anything else.

Pearson: Alright, well let's take a look at corn.  We've seen continued inverse relationship there, old crop versus new crop.  We saw new crop up a little bit this week, excuse me, old crop.  Talk to us a little bit about the old crop corn situation and then your predictions on new crop.

Roose: Yeah, that's right.  I mean, the old crop has been tight here for a long time and supplies are still razor tight.  The basis levels are historically tight and we're trying to just walk along, get to the new crop where we thought we were going to have adequate supplies.  Well now we're not so certain.  But we do know that the end of July we're going to have a bigger wheat harvest and that is going to help to buffer some of it.  We do know we're going to have some imports of corn from Brazil into the United States so that has given us a buffer.   But, you know, the market as we know it is all about the weather this time of year and the weather we thought a month ago it was going to be conducive to a large crop and now we've got probably about 6 million acres of corn at risk.  We were -- and they're in some key areas, Mike.  They're in Iowa, northern Iowa, northeast Iowa, Minnesota, Wisconsin, Illinois, that area about 5.5 million acres and then North Dakota about a half million acres.  So it's going to be all about weather.  But what the market is trying to say is the good areas are making up for the bad areas and we're gong to find out, we're going to look at the crop ratings from here going forward and see if that is true.  Remember a year ago we had the same type of thing.  We took December corn all the way down to $4.99 and it was the middle of June, June 17th the market took off to the up side.

Pearson: That's right.  So it's all going to be weather dependent.  Advise to producers looking at their fields as they stand now?  What is the best way to handle this upcoming year, new crop corn?

Roose: Well, unfortunately what producers are doing right now in a lot of areas, you know, it's late on corn and just starting to plant for the insurance period.  From a marketing standpoint I think this is another good year to look at some of these alternative strategies.  You know, rather than having tight sales you can do some of these window contracts that give you a lot of the flexibility.  It's also a good time to look at some of these short dated new crop options which, you know, have just come into the marketplace here recently.  So there's some things you can do to protect yourself but, you know, it's going to be a key -- I think the one thing we have going forward so far here, Mike, and that is really what the market is about, the crop so far is not getting bigger, it's getting smaller.  So look for signs of the crop stabilizing and start to go the other way.

Pearson: Alright.  Well now let's take a look at soybeans.  As we talk about all these acres at risk are we going to see increased soybean plantings for new crop?

Roose: I think that's what the trade thought for a long time.  I think as you went home on Friday new crop soybeans were actually up 16 cents on the week where new crop corn was down 8 cents.  So while we're pretty mature on the plantings in corn we're not so sure on the soybeans.  We still have about 20 million acres of soybeans to plant.  And so I think that's going to be the big issue, you know, do they get planted in a timely fashion?  And then remember it's all about August weather on soybeans and you could have a carryover of 300, 350 million but if the yield dips, remember, each bushel is about 78 million bushels on your total production so you lose four bushels you're back to 260 million bushels pretty fast on loss so it's all going to be about August weather.

Pearson: So this would be another good example to perhaps take advantage of those short dated contracts or something that is going to give you a little bit more flexibility this year?

Roose: Oh, I think most definitely.  And if you look at it just from a fundamental standpoint but the soybean market is overvalued at $13 a bushel there's no doubt about it.  But when you look at the carries in the market the structure in the market is much better on soybeans.  There's only a 3 cent carry from November to July '14.  That is eight months.  Where you look in corn there's seven months and we have a 24 cent carry.  So the market is much more comfortable with the supply on corn than it is on soybeans.

Pearson: Alright, well now let's take a look at livestock.  As you look at the live cattle market the way it stands what are your thoughts?  It's been a rough year.  Any brightness on the horizon for cattle feeders?

Roose: The cattle market I think it just got way ahead of itself.  You know, last December you could have sold April cattle at $138.  You know, then obviously the trade was thinking it was going a lot higher.  Now people are beat down where you actually have discounts in the market.  We're on a typical seasonal break where we usually drop 11 from the spring high to the summer low.  So we should take the cash market down to about we'll say $116 to $119.  We traded on Friday at $122.  I think when you look forward we probably have a chance for a counter seasonal because we're going to have our lowest -- actually we're going to have a decrease in beef production going into the third quarter.  That's the first time that has happened in 17 years.  So there are some big positives here and then the production next year is obviously, you know, positive.  And cattle across the board are undervalued out in those deferred months but we have to look and wait our turn for the market to stabilize.

Pearson: Alright, and in feeders, cost of feed has been the overriding concern for so many people.  Any bright spots there on the feeder market?

Roose: Well, you're right.  The feeder cattle market this week again was about the corn market and the corn market goes up on Friday, the feeder cattle market goes down a dollar.  But the feeder cattle supplies are pretty tight, they're going to be tight going forward.  But the whole beef situation boils down to what is the consumer going to bear and do we lose market share going forward?  And all of that is going to be something that we're going to sort out in the marketplace going forward.  I think what we're going to find is that beef is still going to be very much in big demand.

Pearson: Okay.  Now as we look at our export sales, particularly of protein, how does the future look there?  We know we've got issues with Russia and China importing our meat, our meat.  Any chance that's going to change in the near term?

Roose: I think when you look at it I think, you know, with the dollar down at these levels I think there's optimism that the export pace is going to pick up and moving forward I know our industry is working very hard to keep the exports strong.  Our pork exports are about 25, 24 of our production, the beef is about 9.  So, you know, on the pork it's a big item, it's a key item and we've got confidence that going forward that our exports will expand.  You know, we have had a lot of news of Chinese exports and exports going forward this last two weeks and so we think that there's underlying strength in the export market.

Pearson: Alright, looking at the hog market we did see a big run up this week in prices, about a $2.70 move.  What can we attribute that to?

Roose: When you look at the hog market they're an overachiever, the cattle are an underachiever but the hog market really we have a marketing hole.  We just don't have the numbers right now, the packers chasing the cash market higher and he's been the driving force.  The cut out has been moving up at the same time.  But what that has really done is it has pushed some of these back months, I would say October, maybe even August, but probably October forward you're probably over economic values, you know, realistically our pork supplies in the fourth quarter are going to increase the most that they have since 2007.  So we're going to have a to of pork coming at us at the fourth quarter going forward and realistically cash hog values probably $70 to $74 in the fourth quarter is not out of line.  And going forward for the year, you know, you could have values, you know, $70 to $85.

Pearson: Alright, well thank you so much, Don.  Before we let you go there was a brief breaking story about anthrax in Minnesota.  Quick take, any effect on Monday market opening, Sunday market opening?

Roose: You know, I don't think so.  I think it was an isolated case.  It was one cow so I think that we're going to walk right through that.

Pearson: Alright, thank you so much, Don, really appreciate your insight.  That wraps up this edition of Market to Market.  But if you'd like more information from Don on where these markets just may be headed visit the Market Plus page at our website.  You'll find expanded market analysis, audio podcasts and streaming video of our program as well as links to our Twitter feed and Facebook account all free at the Market to Market website.  Be sure to join us again next week when we'll examine the market impact of the Agriculture Department's latest estimates on global supply and demand.  So until next time, thanks for watching.  I'm Mike Pearson.  Have a great week.

Market to Market is a production of Iowa Public Television which is solely responsible for its content.  Funding for Market to Market is provided by DuPont Pioneer, working with growers to match the right product to the right acre.  Science with service, delivering success.

The Board of Animal Health said Friday that tests confirm a 4-year-cow found dead Monday on a farm in Pennington County of northwestern Minnesota died of anthrax. The beef herd had not been vaccinated against the disease.

Board spokeswoman Bethany Hahn says a veterinarian will lift the quarantine on the herd 30 days after the cow's death if there are no further cases.

Anthrax is caused by spores in the soil. Grazing animals are most likely to be infected after periods of heavy rain, flooding or excavation.

Since 2000, all reported cases of anthrax in cattle have been in northwestern Minnesota. Unlike bovine tuberculosis, Hahn says, past anthrax cases have not led to restrictions on moving cattle.

The federal civil lawsuit, filed Monday by Ernest Barnes, who farms 1,000 acres near Elkhart in southwest Kansas, seeks unspecified damages to be determined at trial.

U.S. Agriculture Department officials said last Wednesday that the modified wheat was the same strain as one designed by Monsanto to be herbicide-resistance that was tested in Oregon and several other states through 2005 but never approved. The USDA has said the Oregon wheat is safe to eat and there is no evidence that modified wheat entered the marketplace.

It's believed to be the first lawsuit stemming from the discovery. Similar lawsuits are in the works, Barnes' attorney said, and the cases will likely be consolidated for the purposes of discovery, a process where evidence is investigated and shared among parties.

No genetically engineered wheat has been approved for U.S. farming. Many countries will not accept imports of genetically modified foods, and the United States exports about half of its wheat crop. Since the announcement, Japan - one of the largest export markets for U.S. wheat growers - suspended some imports. South Korea said it would increase its inspections of U.S. wheat imports.

Barnes referred all calls to his attorneys. One of them, Warren Burns, said that the scope of the damage is potentially in the hundreds of millions of dollars. He said the lawsuit seeks to make sure their client is compensated for his losses.

"These types of suits serve the purpose of helping police the agricultural system we have in place and make sure farmers are protected," Burns said in a phone interview Tuesday from Dallas.

In a written statement Tuesday, St. Louis-based Monsanto said the report of a few volunteer plants in one Oregon field is the ostensible basis for the lawsuit.

"Tractor-chasing lawyers have prematurely filed suit without any evidence of fault and in advance of the crop's harvest," said David Snively, Monsanto executive vice president and general counsel.

The company said its process for closing out its original wheat development program was rigorous, government-directed, well-documented and audited. It noted wheat seed, on average, is viable for only one or two years in the soil.

Monsanto also contended that, given the care undertaken to prevent contamination, no legal liability exists and it will present a vigorous defense.

Roger McEowen, director of the Center for Agricultural Law and Taxation at Iowa State University, said the price of wheat on the futures market has stabilized since news about the contamination in Oregon surfaced, contrary to claims in the lawsuit.

He said the lawsuit isn't viable and questioned its timing, coming on the heels of legislation the president signed into law that said activists cannot use national environmental policy to tie up genetically modified crops unless they can show some harm.

"To put together a big complaint like this within five days after the news broke sounds to me like it was in the works before the news story broke out in Oregon," McEowen said.

He said he would be shocked if Monsanto had anything to do with the contamination in Oregon since it pulled out eight years ago and destroyed all the test plots.

The modified wheat was discovered when field workers at an eastern Oregon wheat farm were clearing acres and came across a patch of wheat that didn't belong. The workers sprayed it, but the wheat wouldn't die. It was then sent to a university lab in early May.

Tests at Oregon State University confirmed the plants were a strain developed by Monsanto to resist its Roundup Ready herbicides that were tested between 1998 and 2005. At the time, Monsanto had applied to the USDA for permission to develop the engineered wheat, but the company later withdrew that.

The Agriculture Department has said that during that seven-year period, it authorized more than 100 field tests for the herbicide-resistant seed. Tests were conducted in Arizona, California, Colorado, Florida, Hawaii, Idaho, Illinois, Kansas, Minnesota, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington and Wyoming.

Burns said the case "looks and smells" like the litigation that arose from the contamination of the U.S. rice crop from genetically modified rice. Bayer CropScience, a German conglomerate, announced in 2011 that it would pay up to $750 million to settle claims, including those from farmers who say they had to plant different crops and made less money from them.

Burns anticipated Barnes' lawsuit would remain in U.S. District Court in Kansas, because "a tremendous amount of harm has fallen on Kansas and Kansas farms." It has been assigned to U.S. District Judge Monti Belot in Wichita.

Burns said lawyers see a challenge that affects farmers' ability to make a living and may deny them both the markets and the ability to sell their wheat.

"We view it as very important to maintaining farmers and maintaining the way of life they lead which is very important not only to this country but countries around the world to which we export," he said. "It is hard to underestimate the importance of the American wheat crop in sustaining people around the globe."

Shuanghui International's $4.7 billion bid for Smithfield Foods Ltd. has the endorsement of the American company's board. But facing anxiety over food safety scandals in China and complaints about Chinese cyber spying, 72-year-old chairman Wan Long has launched a charm offensive to reassure Americans they have nothing to fear and possibly much to gain from the tie-up.

"We want to be vigilant that Smithfield's brand doesn't change, its team doesn't change, its production sites don't change, it doesn't cut jobs," said Wan in an interview at Shuanghui's 15-story headquarters in this eastern Chinese city.

As for reassuring American consumers about quality, Smithfield "already has a very good food safety control system," Wan said. "With our support, they will do better in quality and safety controls."

Wan's strategy of talking to reporters and inviting them to visit Shuanghui's packing plants is an unusual approach in China, where companies are secretive and corporate bosses rarely speak in public.

As Chinese companies expand abroad, those habits have hurt some when the United States, Australia and other countries balked at acquisitions by unfamiliar buyers in oil, mining and technology industries. Shuanghui's approach appears to reflect an understanding that success requires not just money but winning over politicians and consumers.

"There are plenty of examples of Chinese companies that made the largest offer but were not ultimately accepted," said Kenneth Jarrett, an expert on government relations for consulting firm APCO Worldwide in Shanghai. "For any Chinese company looking at any investment in the United States, they want to be aware of the political dynamic."

Shuanghui's bid for Smithfield represents a big step up on the global stage for Chinese entrepreneurs who are emerging from the shadow of state-owned corporate giants. Foreign acquisitions often are aimed at obtaining brands and skills to help cash-rich but inexperienced Chinese buyers set themselves apart from rivals and speed their development.

In an effort to defuse American concern, Shuanghui took the unusual step for a food company of announcing in advance it would submit the proposed acquisition for a U.S. government security review.

The Chinese acquisition of the biggest U.S. pork processor "is a bit concerning," said U.S. Sen. Chuck Grassley in a statement last week. He said regulators should look closely at the deal.

Wan, dubbed "China's Chief Butcher" by his country's press, stressed that selling pork loin and sausage is very different from the oil and high-tech companies that have run afoul of U.S. security objections.

"Ours is a food industry. It shouldn't be subject to controls," he said, sitting at a desk decorated with porcelain pig figurines. "I believe this will go through without a hitch."

Most Chinese acquisitions in the United States are completed uneventfully, but the few that have failed and the disclosures required to obtain regulatory approval have made companies skittish.

The Chinese state press frequently invokes the memory of state-owned oil company CNOOC Ltd.'s failed attempt in 2005 to buy American oil and gas producer Unocal Corp. CNOOC offered more money than rival Chevron Corp. and promised to retain Unocal's workforce but withdrew after some American lawmakers objected the deal might jeopardize national security.

Business consultants said CNOOC, little known abroad until then, stumbled by launching a surprise bid for Unocal without spending time to explain itself to American legislators and the public.

Technology giant Huawei Ltd., a major producer of telecom equipment, has faced business setbacks abroad due to concern it might be a security risk and the lack of public information about who controls the company. It is trying to dispel its image of secrecy and its founder, Ren Zhengfei, talked to reporters for the first time last month in New Zealand.

Acting as a high-profile spokesman is a new role late in life for Shuanghui's Wan, who might be the oldest full-time corporate boss in China, where some executives retire as early as their 50s. Last month, the founder of e-commerce giant Alibaba Group, Jack Ma, stepped down as CEO at age 48, saying he was "a bit too old for the Internet."

Born in 1940, Wan exemplifies the first generation of entrepreneurs who scrambled to seize opportunities after then-supreme leader Deng Xiaoping launched market-style economic reforms in 1979.

A former soldier, he already was in his 40s when his coworkers elected him manager of a struggling slaughterhouse in 1985. He is credited with turning around the facility with such radical innovations for the time as operating three shifts around the clock, every day of the year.

The government's share in the company dwindled as Wan brought in other investors. It became fully private in 2006 after the remaining state stake was bought by foreign investors including Goldman Sachs and Singapore government investment company Temasek Holdings Ltd.

Today, Shuanghui has 70,000 employees and annual sales in excess of 50 billion yuan ($8 billion). A sign on its headquarters proclaims it, "The Biggest Meat Processing Base in China."

The company dominates Luohe, an agricultural city of 300,000 people on the broad central China plain where traffic on major thoroughfares pauses to let farmers herd goats across the street. The city is dotted with the company's sprawling meat-packing plants, truck depots and other facilities.

At its flagship slaughterhouse, a long, two-story white building surrounded by neat lawns, up to 10,000 pigs a day pass through what Shuanghui says is China's biggest meat cutting operation.

In a cavernous hall chilled to 10 degrees centigrade (50 degrees Fahrenheit), dozens of employees in hooded white overalls and face masks working assembly line-style at six automated conveyor belts slice and pack slabs of fresh pork. In an adjacent room, employees operate machines the size of cars that stuff ground pork into sausage casings.

Shuanghui's reputation was battered in 2011 when state television revealed its pork contained clenbuterol, a banned chemical that makes pork leaner but can be harmful to humans. The company promised to tighten quality enforcement.

Smithfield, with about 46,000 employees, reported revenue of $13 billion in its latest fiscal year.

The American company has said the acquisition isn't about importing Chinese pork into the U.S. Instead, it says this is a chance to export into new markets with its brands, such as Smithfield, Armour and Farmland.

"Our acquisition of Smithfield should be a win-win' development," said Wan.

"We want to support it to continue to become bigger and stronger, and to realize its expansion abroad," he said. "Smithfields has a good (management) team, good brands and good technology. Regardless of whether it is directed at the Chinese market or at the world market, all of that is very attractive."

A key market will be China, where pork is the staple meat. This country consumes half the world's pork and demand growth is strong at a time when consumption is leveling off or falling in the United States and other Western markets.

For Smithfield, the deal "provides an enhanced platform for future growth," said Fitch Ratings analysts in a report.

According to his aides, Wan keeps up a grueling schedule that includes visiting supermarkets and Shuanghai packing plants each day on his way to the office. They say he makes the 14-hour flight to the United States at least once a year to meet with equipment suppliers and business contacts.

Wan told the Chinese business magazine Caixin in 2010 he might consider retiring in 2015, the year he turns 75.

"To make this enterprise bigger contributes to society. This is the responsibility of entrepreneurs like us," Wan said.

"Smithfield also needs to make contributions to the American people," he said. "I hope this acquisition can help improve Chinese-U.S. relations and broaden trade between the two countries and bring more benefits to their people."