WASDE Wild Cards, Trading Volatility & Why Good Producers Still Struggle
This week Kevin and Todd dig into today’s WASDE report, where Kevin sees the biggest potential surprises, and why he believes the market may be sitting in a spot where one USDA number could trigger a much larger technical move.
Kevin also explains why he is trading smaller as volatility increases, why he would rather react to a market mistake than try to predict the USDA, why some very good producers still struggle financially, and why the business side of agriculture is becoming an even bigger separator.
A few highlights from this week’s conversation:
00:40 — What should the most important room in agriculture be talking about?
AI, robotics, government policy, new investment ideas, and one overriding question: How do we use all of these new tools to improve ROI?
02:15 — Kevin’s biggest WASDE wild card
Kevin says acreage may be the number that creates the surprise. He also discusses yield, feed and residual demand, exports, and why adjustments to last year’s crop could still matter.
08:30 — Stop putting too much weight on weekly crop ratings
Kevin pushes back hard on using USDA Good-to-Excellent ratings as a precise yield predictor and says he puts more weight on private tours, producer intelligence, and actual boots-on-the-ground observations.
19:25 — Don’t predict the report. Wait for the market to make a mistake.
Kevin compares trading around USDA reports to wrestling: stay balanced, let the opponent overextend, and then take advantage.
29:15 — Why Kevin is trading smaller than he used to
More speculative money, larger price swings, and greater volatility mean the consequences of being over-leveraged are dramatically higher.
37:40 — Are struggling producers simply bad operators?
Kevin’s distinction is important: most producers he knows are very good at producing a crop. The bigger separator is business — marketing, equipment decisions, insurance, inputs, technology, taxes, capital allocation, and ROI.
43:20 — Put a great businessperson against a great producer. Who wins?
Kevin’s answer is immediate: the businessperson. They may need time to learn production — or hire somebody who already knows it — but strong business judgment eventually becomes the advantage.
49:25 — The AI conversation comes down to one word: EXECUTE
Having data isn’t enough. Having AI isn’t enough. Having advisors isn’t enough. The advantage comes from actually implementing what improves the business.
59:15 — Why Kevin is still holding substantial cash even as Wall Street gets more bullish
Kevin explains the difference between being bearish and maintaining dry powder. His long-term investing accounts remain bullish — he simply wants enough cash available to capitalize when markets hit one of the “trap doors” he believes are inevitable.
KEVIN QUOTES
“I’m not trying to predict or forecast what the USDA is gonna do… I’m trying to play if the market overreacts one way or the other.”
“The whole key is to be able to stay with a move and not get shook out.”
“The differentiator is on the business side.”
“A great person can take a really shitty or bad idea and make it good. A bad person can take a really great business and make it really bad.”
The bigger theme running through this episode is simple:
Volatility creates opportunity — but only if you have the discipline, liquidity, and business structure to survive long enough to take advantage of it.
Listen to the full episode of FARMCON Conversations.
FARMCON — The Most Important Room in Agriculture
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