📊 Like a stubborn weed...

We just couldn't stay away.

February 14, 2025

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We really appreciate all the support you've given, and we're excited to share the very first edition of The Daily Yield with you! If you have any feedback or suggestions for future letters, we'd love to hear from you—and we’d love it even more if you shared it with a friend or colleague!

— TDY Team
MARKETS

Steel & aluminum tariffs shake markets

Commodity futures

  • Corn: May 2025 corn futures closed at $490.00 per bushel, reflecting a decrease of $13.25 or approximately 2.63% from the previous close.

  • Wheat: May 2025 wheat futures settled at $650.75 per bushel, down $8.50 or 1.29%.

  • Soybeans: May 2025 soybean futures ended at $1,350.25 per bushel, declining by $10.75 or 0.79%.

  • Crude Oil: March 2025 crude oil futures decreased by $0.63 or 0.89%, closing at $70.73 per barrel on Wednesday.

  • Gold: April 2025 gold futures rose, closing at $2,946.90 per ounce on Wednesday.

Major financial indices

  • S&P 500: The S&P 500 index (^GSPC) closed Wednesday at 6,063.28, up 11.31 points or 0.19% and continued to rise on Thursday.

  • Nasdaq Composite: The Nasdaq Composite was up by 0.73% at 12pm Thursday, driven by gains in technology stocks.

  • Dow Jones Industrial Average: The Dow Jones Industrial Average increased by 0.2%, buoyed by a positive earnings reports.

  • Bitcoin: Bitcoin futures for February 2025 (BTC=F) are trading at approximately $96,919.00, remaining below the $100,000 mark.

Peering into the crystal ball

The markets are currently tiptoeing through a minefield of tariff tantrums and economic data drama. So, don’t forget to subscribe if you aren’t already and stay on top of all the action!

Data is provided by: finance.yahoo.com 
Note: Market conditions are subject to rapid change. It's advisable to consult with a financial advisor or conduct thorough research before making investment decisions.
POLITICS

Back at it again

The famous Trump x Wall meme reimagined.

U.S. President Donald Trump raised tariffs on steel and aluminium imports on Monday to 25% without exemptions, aiming to revive the flagging sector but risking a broader trade war.

These tariffs, effective March 12, apply globally without exceptions, targeting perceived unfair trade practices, particularly from China. Domestic steel companies may benefit, but U.S. manufacturers using these metals could face higher input costs.

In response, Canadian Prime Minister Justin Trudeau condemned the U.S. tariffs as "unacceptable" and indicated that Canada would respond strongly and firmly if necessary.

These developments have heightened trade tensions between the two nations, with potential implications for various industries and the broader economy.

The newly imposed 25% U.S. tariffs on steel and aluminum have a ripple effect on farmers in both Canada and the United States, impacting costs, equipment availability, and trade relationships.

What’s the impact on farm businesses?

  1. With tariffs driving up metal prices, farm machinery manufacturers like John Deere, Case IH, and CLAAS will likely pass on the costs to farmers.

  2. New equipment and repairs will become more expensive, putting pressure on already tight farm budgets.

  3. Metal-dependent farm infrastructure, including barns, fences, and grain storage bins, will see cost hikes, making expansion projects and maintenance more costly.

  4. The construction of new livestock facilities and greenhouses could slow down due to higher material expenses.

  5. In response to U.S. tariffs, Canada (and other affected countries) may retaliate by imposing tariffs on American agriculture products, such as wheat, beef, pork, and dairy.

  6. This could reduce export demand for U.S. farmers, particularly those selling to Canadian processors and markets.

  7. The increased cost of steel and aluminum affects transportation, including trucks, railcars, and grain hoppers, which are crucial for moving commodities.

  8. Higher freight costs could reduce farmers’ margins on grain and livestock sales.

  9. If tariffs slow down equipment purchases, manufacturers may cut back on production or limit inventory. This could lead to delays in getting new machinery or replacement parts during critical planting and harvest seasons.

The Bottom Line:

Although these tariffs aren't giving farmers the stink eye directly, they're sneaking up like a raccoon in a cornfield. With already slim profit margins, any added cost pressure could push farmers to delay investments in machinery, storage, and expansion. It's like telling a kid they can't have dessert until they finish their broccoli—except the broccoli is a mountain of bills! If Canada retaliates with tariffs on U.S. farm goods, commodity prices could take a hit, especially in crops like soybeans, wheat, and beef, where Canada is a key buyer.

Tiny turnout for Ag!

Trudeau addresses leaders at the Canada-US economic summit.

The agriculture sector had some representation at Prime Minister Justin Trudeau’s tariff summit in Toronto on February 7, though some industry voices felt that more involvement was needed. Trudeau convened the summit to discuss the ongoing risk of U.S. tariffs, which President Donald Trump has postponed until at least March 1.

While the lineup did feature a few agriculture-related names, like Martin Caron, President of l’Union des Producteurs Agricoles in Quebec, and Steve Verheul, a former Chief Agricultural Negotiator, the presence of primary producers was kind of slim.

Keith Currie, President of the Canadian Federation of Agriculture (CFA), noted that Executive Director Scott Ross was at the summit to represent the CFA. However, the invitation was sent directly to Ross rather than through the organization—almost like getting a dinner invite but realizing your name wasn’t actually on the guest list.

“Hopefully the Prime Minister gets a lot of good input so that we make the right decisions going forward, that’s the most important thing.”

— Keith Currie, President of the Canadian Federation of Agriculture

Massimo Bergamini, Executive Director of the Fruit and Vegetable Growers of Canada (FVGC), attended the summit, where he emphasized the potential threats that proposed U.S. tariffs could pose to Canadian agricultural exports.

MACHINERY

AGCO x SDF

AGCO and SDF are collaborating and have entered a supply agreement to enhance their positions in the low to mid-horsepower tractor segment. Their partnership aims to offer farmers a streamlined tractor portfolio under AGCO's Massey Ferguson brand.

"We are pleased to have reached this agreement, which highlights the efficiency of SDF's vertically integrated production system in all our facilities,"

— Alessandro Maritano, SDF Chief Commercial Officer.

The partnership between Massey Ferguson and SDF aims to achieve two key objectives:

  1. Enhancing Customer Satisfaction & Loyalty: Combining expertise and resources while delivering solutions that meet their evolving needs.

  2. Driving Profitable Growth: The collaboration focuses on optimizing manufacturing efficiency, maintaining high production quality, and capitalizing on economies of scale to improve cost-effectiveness and overall profitability.

Deere & Co. Reports Decline in Earnings

A significant drop for the biggest name in farm equipment in fiscal first-quarter earnings, with net income decreasing to $869 million from $1.751 billion the previous year. The company attributes this decline to weak demand, higher-than-desired inventories, and increased costs due to U.S. steel and aluminum tariffs, as well as retaliatory tariffs from China.

But don’t worry, they’re still raking in cash at $3.19 per share, slightly beating Wall Street’s expectations of $3.11.

Sales also tumbled 30% year-over-year to $8.51 billion, but that’s still ahead of projections at $7.7 billion—which just proves that even in a “bad” quarter, Deere is still plowing through.

China Imposes Tariffs on U.S. Farm Machinery:

Here’s the rundown on China’s latest counterpunch in the tariff boxing match with the U.S.

After President Trump slapped a 10% tariff on Chinese imports, China wasted no time firing back—hitting over 50 U.S. agricultural and gardening products with a matching 10% tariff. And guess what? That includes some key farm machinery like mowers, egg sorting machines (because eggs need organization too), sugarcane harvesters, combines, tractors, sprayers, and planters.

For big-name manufacturers like Deere & Co. and CNH Industrial, this is about as welcome as a hailstorm at harvest. With farm incomes already down and commodity prices dragging, these new tariffs only add to the headache. The uncertainty could force U.S. equipment makers to pivot, whether that means finding new export markets or tweaking production strategies to keep their bottom lines from looking like a drought-stricken soybean field.

For now, all eyes are on how this trade tit-for-tat will impact farmers who rely on affordable machinery—and whether this tariff feud will cool down or heat up even more.

QUICK BITES

“Behold the turtle. He makes progress only when he sticks his neck out”.

James Bryant Conant

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