Later today, January 10, 2025, USDA will release its annual data dump that includes monthly grain supply and demand guesses, annual crop production (the “final” numbers until changed again), quarterly grain stocks estimates (as of December 1, 2024), and winter wheat seedings. We know the time for this annual silliness because the usual posts talking about the high anticipation of the event is already starting to float to the top of the cesspool we know as social media. Some are running daily countdowns, others are boasting about how busy their brokerage office is with customer phone calls on report days, this one in particular. Over the decades of my career, I’ve likened myself to Don Quixote and his quest to vanquish the windmills he knows to be giants. But before I retire to my bed to die of exhaustion, both physical and mental, I will once again shout into the wind in hopes someone will hear. This time, I’ll be using words borrowed from other philosophers and poets. Will it make a difference? I doubt it.
As a market commentator, I was long ago taught the age-old lesson, “Don’t talk about politics or religion”. It should come as no surprise to anyone who knows me that today I will ignore that lesson as I get this discussion rolling with a quote from Karl Marx, “Religion is the opium of the people”. Marx wrote this as part of his introduction to “A Contribution to the Critique of Hegel’s Philosophy of Right”. I’ve read a number of analyses of Marx, keeping in mind that in another life I graduated from Fort Hays State University with a degree in Political Science, with one interpretation of this quote being, “religion’s role is as a metaphysical balm for the real suffering in the universe and in society”. My interpretation of this interpretation is religion, in all its forms, makes people feel better in that it removes personal responsibility from decisions made.
Without getting into a drawn-out discussion of religion, I’ll save that for the next family get-together, let’s use this definition of the word pulled from the dictionary I’ve had on my desk for more than 40 years: “Religion 3. An objective pursued with zeal or conscientious devotion.”
For the sake of this discussion, let’s say the reverence held by the majority of the grain industry for any and all USDA reports fits the definition of “religion”. Most people do not care that USDA’s numbers are completely fabricated, for they find comfort in their belief of the omnipotence of a government entity. I’ve heard the same arguments for nearly forty years: Government reports are the best source of data we have. They may be guesses but at least they are educated guesses. Everyone trades the reports. And so on. I’ve disproved each and every argument for these reports over the decades, but just as my counter points to ardent religious family members have largely fallen on deaf ears, so to have my arguments for free markets. In other words, the market knows what real supply and demand is, all we have to do is take some personal responsibility and pay attention.
But for all its chest thumping bravado about independence, freedom, and conservatism, US agricultural is one of the most socialistic industries in the world. In the United States there are numerous government programs designed to make payments to grain and oilseed producers, what in actuality is nothing more than one of the largest and most expensive welfare programs in existence. Then when foolish trade policy is put in place by any US administration, with US agriculture viewed as an expendable pawn, hardship checks from the US Treasury and signed by the president himself are eagerly anticipated and accepted. Last February, while speaking at a customer meeting for a large grain company based out of Omaha, I was asked by an attendee if the Biden administration would be sending out checks to try to buy his vote, similar to what the previous US president did after his social media driven trade war with China collapsed US markets. He had no intention of voting for Joe Biden, but did want the check.
If we look back at the history of US agriculture, it’s understandable to see why it leans so heavily toward socialism. After all, Franklin Delano Roosevelt saved the industry back in the 1930s with his countless government programs. In fact, US farmers used to vote Democrat until the Kennedys rose to power, bringing with them a firm belief in the Civil Rights Movement. But that’s a larger topic for another day. For now, let me conclude this segment with a warning against the charlatans preaching the importance of USDA reports. Think of them as the weasel-like television preachers wanting nothing more than get their hands on your wallet.
While at University, I also took a poetry class and one piece from Ralph Waldo Emerson has stuck with me across the decades, “A foolish consistency is the hobgoblin of little minds”. It doesn’t matter how many different ways I show people the market is its own entity; they are scared of that idea as if it were a demon from the depths of hell. They are comforted by the idea USDA is looking out for them, that they have no control over their very livelihoods, that anything bad that happens to them is obviously the fault of the demon market driven by the evil Watson.
It’s hard to argue with someone whose little mind is clouded by opium.
Until next time.
Darin Newsom
