This Scott Bessent Interview Got Weirder by the Minute

0:00If you like YouTube, you'll love YouTube Premium. Hi, I'm Sean Evans from Hot Ones and I want to tell you about YouTube Premium. It has offline downloads, so you can watch without Wi-Fi, background play, so you can lock your phone and it still plays baby. Oh, and it is completely ad-free. Yes, I said it, ad-free. Try YouTube Premium for two months free at youtube.com slash premium. Hell eligibility varies, terms apply, cancel anytime. This is Matt Rogers from Los Cultures, that's with Matt Rogers and Bowen Yang. This is Bowen Yang from Los Cultures, that's Matt Rogers and Bowen Yang. You know when people try a new food and suddenly it's like, okay, hold on, I got a new favorite food. That's the reaction a lot of people are having when they first try Kupy Mayo. Yeah, it's the one with the red cap and the little baby on the bottle. You've probably seen it at the grocery store. And this mayo is different. Manez uses whole eggs. Kupy only uses egg yolks, which gives it this rich umami flavor. It's smoother, deeper, almost buttery.

1:01Once people try it, they start putting it on everything. Egg sandwiches, fries, burgers, chefs use it, restaurants use it, people who really care about flavor use it, put it on just about anything. Then you'll understand. Kupy, the original Japanese mayonnaise. Hey guys, me Sam Simon, managing editor of the book and I recorded an episode of Catherine Rampels, new podcast, receipts. We talked a lot about Scott Becent and his crazy interview he did with Axios, where he simultaneously came off as one of the most hebristic members of the Trump cabinet, but also the most insecure and also talked about how straight women love him even though he's gay. We haven't seen that type of combo since my last conversation with Tim Miller. So you're going to want to catch that. It was a great conversation with Kyle. The realtor talked about the state of the economy because that's what she talks about on her podcast and how all of Bessett's interventions have really not worked and how we should be totally surprised because in actuality, his business history prior to joining the administration, wasn't that all that great?

2:02Now look, Catherine's got this podcast. It's awesome. It's got its separate feed. It just recently launched. I would highly, highly encourage you to check it out. It's available on Apple Podcast, Spotify YouTube and more basically anywhere you can listen to podcasts. You will find it. You can also get it on our website, the bowl.com slash receipts. That's the bowlwork.com slash receipts. Check it out. Subscribe. Give it a like. Tell all your friends and family. We want to jump up on those podcast rankings too. So we appreciate all your help with that. And now, enjoy the episode. Hey, everyone. Welcome to receipts. I'm Catherine Randpell, economics editor here at The Bowl Work. We have a big show today. It's a double header. Sam Stein is going to join me to talk about Scott Besson's interesting interview recently with Axios. That's Besson to our Treasury secretary. Waxing on about how appealing he is to women. He is one of the well-known gay members of Trump's administration, but he wants to talk

3:08about how the ladies like him and how he does not regret saying I am the house. Later on, I'm also going to speak with Mateo Keeler. He is the owner of Jasper Hill Farm. That's a cheese company in Northern Vermont. We're talking with him because Donald Trump said he was going to save the U.S. dairy industry from our big bad bullies to the North, the Canadians who are being so mean to our U.S. dairy industry. Mateo says otherwise that in fact the trade wars with Canada and with Europe and everywhere else in the world have actually devastated dairy farmers in the United States. But first, let's chat with Sam. Sam, I want to get into some of this peculiar interview that Treasury Secretary Scott Besson gave recently. Let's play this first clip about whether he regrets some of the more heubristic things he said about his interventions with the bond market.

4:10Let's play that. Last month you told the markets, I am the house now. They bet against you. They're peril. Do you regret saying I am the house now? No, because look, the health doesn't win every hand. The health plays the percentages. Look, maybe they heard some fragile egos on Wall Street that I always had respect for the market. I always tried to look and think like what's the move after the move that if you have an ego you lose a lot of money. But the market swept back. No, it didn't. How did it slip back? The rates went up, but oil went up. I could say, yesterday we had the first full allocation since we have expanded our Treasury buybacks and rates collapse. There's nothing causal there. It was cool. Well, the financial times probably your favorite paper said, Besson fails to break fever in U.S. bond market.

5:11What did you learn from that? Well, I learned that the financial times is anti-American and anti-business. They have a fever that are constantly trying to create a problem for the U.S. But leave that disgrace publication on one side. Yeah, this is an interesting way. There's a lot here, right? This is an interesting way to describe the FT, which is one of the premier financial, very capitalist, very pro-business publications in the world. No way. It's woke. It's woke. Clearly. Yeah, I mean, that salmon-colored paper that just tells you something's up there. Yeah. The idea that the FT is anti-business, and that's the only reason that anyone would point out the fact that Scott Besson's attempts to bully the bond market or cajole the bond market into reducing rates were unsuccessful.

6:11The only reason they would ever describe it that way is because they're anti-American and anti-business. What else did you hear in those comments just now? Well, it's like a lot of things with the Trump folks. It's a lot of projection, right? I mean, accusing everyone of having fragile eagles and being heubastic while you're calling yourself the house and defending it is a little ironic, I suppose. He's an interesting character, right? Because you know more about this than I do. The aura about him is that this is a successful businessman who really speaks to Wall Street but also can communicate with Trump. And so he bridges these two worlds because obviously Trump, while he fashions himself to be a stupid businessman, is not. And yet Besson's history is not all that particularly great, right? Like he was, he lost 90% of his funds when he was running a hedge fund. Yeah. And I think, you know, he, there are always going to be some data points you can look at and say, yeah, see, I was right to say on the house, but I think in the aggregate,

7:16if you look at the current macroeconomic situation, it's pretty bleak. And I'm not just looking at the data around job numbers, which was fairly featured when they came out on Friday, but you look at, you know, I don't know, the 10-year treasuries, what does it like over seven, seven point three now? And then mortgage rates of 30 or fixed. I mean, what I'm looking at this now, it's seven point four three. Like there is clearly a hold being taken on credit in this country in a way that I think is hard to argue with. And I'm sure he has a number of different things he can point to probably on the stock market. But by and large, it does seem like his interventions have not done what he wanted to do. Yeah. What's interesting here to me is that the reason why he boasts about his financial market prowess, that he was the one who thought multiple steps ahead, has to do with this very famous bet that he encouraged George Soros and Stan Drucken Miller to take back in the

8:2190s against the pound, that there was a bet at the time that the Bank of England was trying to basically do something that markets did not want them to do, that market fundamentals did not want them to do, that they were like, going to try to do what they could to prop up the value of the pound. And ultimately, at the time, a very young Scott Besson was like, they can't do it, let's bet against them. And he was right. He seems to fail to understand the parallel today. This is like a very, very similar situation today. Yeah. Back then, the house was the Bank of England and markets were right, as Besson learned, made a lot of money at the time. Markets were right to bet against it. And now the roles have reversed. And he seems to fail to recognize that he is trying to do a similarly futile experiment or effort, whatever, to prop up the value of bonds and therefore to push down the rates

9:28on those bonds and the market bet against him and seems to have won. He's like, oh, no, the house doesn't always win. Whatever. What did he say? The latest offering was all allocated. So is there more flexibility there than we are realizing? Is there more money willing to buy us bonds? Because it's been a little rough. Yeah, he has suggested that there is other money that he could use. There's been reporting. I don't remember if he's officially confirmed it, that they might use the Treasury's general account to try to buy even more bonds that would be more. Where are they getting all this money for? Every day. It's like, we got two million, two billion here for like Medicare payments that we're going to send to retirees and obviously the 1.3 trillion for the 5,000 dividend. I mean, it's like money is just coming from accounts that I think we didn't know were the so so right been plush. Yeah, I know that some of this is magic money that may never materialize. Some of it may be illegally diverted.

10:30Jonathan Cohen and I had a discussion about this earlier about some of the money that's like going out from to ACA and rollies, marketplace and rollies, maybe illegally diverted from another pot of money. Some of this stuff may never happen in the case of the Treasury general account. This is supposed to be like the pot of money from which Treasury pays its bills. I don't know the legalities of whether they can siphon that money off to try to prop up the bond market and push down bond rates. I don't know the legality of it, but it certainly seems unwise at the very least, particularly as we are approaching the debt ceiling. And it might be useful to have flexibility around your. When is the debt ceiling deadline? Do we have a rough idea? After this year is when we will officially hit the debt ceiling, but then they can move money around. This is what normally happens. Yeah. You have a little runway. You have a little bit of runway where they like engage in some creative accounting basically

11:32to delay actually defaulting on our debt. And that gives us a few months. I don't know. That's called the X state when we were like actually actually run out of money. Yeah. Here's a good thing in why people should not be worried because when a Republican is president, the debt ceiling gets raised with little drama. When a Democrat is president, that's not true. It's always a lot of drama. So Trump will be president. He will demand that the debt ceiling be raised and you got to imagine it will. So I will say, come on. This is a pretty unruly Congress. Yeah, but it's usually plays out that way for me. Well, I hope you are right. I certainly hope you are right. I think we will have less runway either way for them to, for, for members of Congress to figure out how to be right on this issue. If Bessent is, you know, stealing from like the money that's been sucked away under the mattress just in case of a rainy day. But this is, this is not the only interesting thing that came out of that interview, by the way. So there was also this bizarre exchange about Bessent's sexuality.

12:37And I don't know if it had- Bessent is one way to describe it. Yes. It was very bizarre. You said president Trump chose me because he believes I'm the best candidate, not because of my sexual preference or your green eyes. Exactly. So I am. And I think that's one of the reasons we have such a great team that the president makes his decisions all the time. He'll occasionally tell you, tell me, you know, you're breaking the line his friends' hearts. They see you on TV and they want an intro and we have to break the news. I don't know if we have the rest of that clip. Yeah. But he talks about how, yeah, I know he's a, he's a lady killer right there. He also talks about in that interview, he says, well, Donald Trump chose him not because he's gay or, or in spite of the fact that he's gay, that the good thing about money management is that there's a scorecard and that, you know, it doesn't matter what your sexual orientation is, you can see whether somebody performed well or not because you can see whether they've made money. And the irony is, again, he made money in the 90s when he was working with Stan Drucken

13:41Miller and George Soros. And then when he struck out on his own, as you point out, he lost 90% of his funds valuation. So if there is a scorecard on his performance as a money manager, it doesn't look so great. But again, there is like no self-awareness about any of this. No, and I gotta say, we have a pretty big community here at the Bullwark. A lot of readers from different walks of life. So if you happen to be one of Melania's, a cross-fallen friends who was just devastated that, to discover that Scott Besson is gay, feel free to just, you know, hop into the mentions and let us know. We would love to hear why it took you so long to discover that Scott Besson is gay. Yeah, yeah. But hey, you know, Scott Besson, I heard. I want Scott Besson's confidence. I want that confidence. That's incredible stuff right there. On the house, Melania's friends all love me. Like, what is this guy? He's great.

14:41Great scorecard. Oh, my scorecard is fantastic. Yeah, the fact that I lost 90% of the value of my fun. You know, one of the other things that I have often heard about Scott Besson besides his major confidence is his temper. And there has been a bunch of reporting about how he has, I don't know if he's picked fights, but he's engaged in fights that either became physical or became close to getting physical. And then you almost throw that with Bill Pulty or something like that? Bill Pulty with Elon Musk. I don't know if there was a third one. Yeah, but there have been a few cases that have been reported where he has like threatened to beat up various other members of the administration. And I think he was even asked about it in one of his Senate testimony hearings where he was asked like, were you going to beat someone up? He's like, I said, I was going to kick his ass. I'm like, okay, I guess this is how the members of the Trump cabinet settle there. This is what Janet, this is very vintage Janet Yellen.

15:43She's the same thing. Yeah. She brings any hearings. Yeah. Totally. Janet Yellen, definitely a famous brawler. Famous brawler. Here is what Scott Besson had to say when asked about that record. In talking to administration officials for this interview, two themes kept coming up. One is they said you're the most competent cabinet member. Other people said you're the most volatile cabinet member. What kind of person sets you off? Well, let's go back. First of all, I think we have a great cabinet. And I think this, the president has assembled a different kind of cabinet that when I have a question on the energy to be able to talk to Secretary Bergman, Secretary Wright, both was substantial experience. And look, I don't think I'm the most, but we may. I'm far from the most. Well, you've joked that dueling among treasured sectors, good fact of Alexander Hamilton, you have had some heated competitions. I, yeah, that, you know, I would say that I stand my ground like Alexander Hamilton,

16:48fired, fired upon. And yeah, I always point out did not end well for treasuring the Alexander Hamilton, Aaron Bird, dole. So my, my goal is not to duel, but it is to stand my ground. And look, if I think somebody, if I think someone is not following what the president wants, because I am here to do what the president of the United States wants and is not trying to do what is best for the American people. So fired, fired upon, fired to share a warning there. Yes. So he sure understands, I think he understands how a duel works. Can you explain it to him? Well, so you don't wait until you get fired upon in the duel, you turn around and then you shoot. Yeah. That's just how I understand dueling. Yeah. Well, I don't know a story of Alexander Hamilton. He did not fire when fired upon. So that was, yeah, did not work out so well for him.

17:51Okay. But I do like that he says that he's really only there to defend the honor of what the president wants in the American people. It's chivalry. That's the dueling part of this. It's just chivalry. He is not just a hothead who's threatening to kick the ass of various other members of the administration. He's just really there for the common good and for the mega agenda. That's. I will say this about him. For someone who's never been involved in politics prior to this, as far as I know, he's definitely kind of adopted more of a political persona, right? Like he's clearly figured out how to play the game and seems a lot more comfortable kind of in that role than he did early on where he was a newbie to Washington, which to your point that we're talking about, I guess does suggest maybe he has a taste for the game and he sees himself as a longer term fixture in GOP politics.

18:51Yeah. I've heard that he is interested in being considered for the VP slot on the 2028 ticket. I don't know that he's said anything publicly about it, but that's sort of the rumor that is of his interest, whether it's of anybody else's interest, I don't know. Yeah. What does he bring into the ticket? Yeah. He was asked about this. Well, he was asked about whether he had a desire to stay in politics. Because remember, he had to do one of those step-in press briefings for Kellyn Levin when she was on maternity leave. He went and appeared on the podium and he was asked about this. You're following the footsteps of people on the podium like Rubio and Vance who had done it earlier. The question he was posed was, does your presence here today indicate that we might see you running in 2028? And he was about to know, I think it just means they've run out of things on the food chain. I'm not sure what that means, but I guess he means he's just the last. The latest sacrificial animal. So we'll see. Maybe, maybe not.

19:52Yeah. Yeah. Well, if these are his ambitions, he's free to leak them to the bulwark girl. Be glad to write about it. Yeah. Absolutely. In the meantime, we have more Trump comments on inflation and checks. Let's play his latest in talking about who knows the most about inflation. When you look at 21 trillion coming in and we have one trillion very easily affordable and I know more about inflation. I know more about everything than anybody in this room, anybody anywhere in the world. Well, there's a woman sitting right over there that she's a housewife but she's very good. She's got a natural instinct for business. She perhaps knows more than I do, but I actually don't think so. I don't know. Do you think he knows more about inflation than anybody in the room? He wasn't. He's just inflation just to be clear. He knows more about, I think, was anything and everything than anyone in the room?

20:52Is that the right quote? I just want to be sure. Literally he knows more about everything than anyone. Come on. Yeah. He knows more about grass. I know he knows more about grass. He said repeatedly he knows more about grass than everyone in the world. Perhaps, and obviously he knows more about building and his uncle was an MIT professor. So he knows more about everything. Everything. He knows about engineering or something. Rocket engineering and anyone in the room. He knows about people and hearts and what does this guy know now? He's so smart. It's amazing. Yeah. Why do you feel they need to put down the woman in the front row? He was lifting her up and then he's like, actually, no. He's all about nagging. He likes to nag his supporters. He likes to nag the Ken Paxton. Ken Paxton. And at a recent rally in Ohio, he insulted Houston and Vivek Ramaswami for, I don't know, not being that appealing.

21:53He said something like, even if you hate them, even if you hate them, please go out and vote anyway for something related to voter ID stuff. Which again, seemed like a little bit of an insult. Presumably, he would not have taken so kindly if somebody was like, even if you hate Donald Trump, go vote for something else that the party wants. But yeah, that's his MO. That's his MO. He's the pickup artist, right? What a guy. Yeah, he's like the pickup artist. What a good poll there. Wow. I forgot all about that guy. Yeah. But he does nag. He does nagging. He does nagging. Yeah. All right. Well, thanks Sam for chatting through. Absolutely. I'm just sad. I'm not, I'm sad I'm not part of the cheese conversation. Because you know I have a lot of cheese puns in me. You do. Yeah, I actually, I had a footnote in my recent newsletter about how Sam had warned me not to have too many cheese puns. And then I added the ball in. Yeah. And then in the end he added some of the best cheese puns. The headline on that story was Sam's who cut the cheese, Trump did.

22:58Yes, that was all Sam beautifully done. And I cannot. Well, my final thesis is the work, yeah. I cannot take credit. That Sam is, he may like this, the fans of, of punditry out there, but actually he likes it. He secretly likes it. So, well, thanks so much, Sam. All right. Of course. We have a very exciting offer for you. The 2026 midterm elections are only a few weeks away. And you're about to hear a lot of people telling you exactly what you want to hear or saying whatever they can to make you the angriest at the bulwark. We're trying to do something a little bit different. This week only we are giving our listeners 30% off a bulwark plus membership at the bulwark.com. That's where we publish our newsletters and our written reporting. The people you watch here also write for us. Sam edits me, Sam edits all of our buddies here at the bulwark as well, bringing our insight and humor straight into your inbox with or without additional puns. Yeah. Exactly.

23:59Bulwark membership supports independent journalism committed to truth and reason, not scoring point, not scoring points for the red team or the blue team. We are on team democracy. We are not beholden to billionaires or mega freaks or any other political contingent. We say what we actually think. And we try to have a little fun along the way. By joining you'll get access to our member community and comments, member only newsletters, and reporting. And frankly, more of us, more of this fine chitchat, tete tete with Sam Stein and me. No? No? You don't want to promise our audience more? Oh, no, I love it. Centrelating conversation. It's good. Go to the bulwark.com slash surprise to get 30% off bulwark plus for the next year on the bulwark.com and sub-stack. I am delighted to be joined by Mateo Keeler. He is the CEO and co-founder of Jasper Hill Farm.

25:00For those of you unaware, Jasper Hill Farm makes these exquisitely delicious cheeses. You'll find them at Michelin Star restaurants, at your local cheesemonger, at the cut to order cheese counter at, I think, whole foods and other big, you know, high end organic, ever grocery chains. Not just that, but Jasper Hill Farm recently took back the best of show prize awarded by the American Cheese Society for its winimier cheese, which was described as rich, bark-rapped and spoonably soft. So just to get your mouths watering as we start into this conversation. We are here to talk about cheese. Yes, we're also here to talk about the economics of the cheese industry. And most importantly, for the current news audience, probably, is how the current trade wars that our president has launched have affected the dairy industry, which Donald Trump

26:02has in the past, said was one of his top priorities for why we were going to trade war with Canada. So for those who are listening to this, you may be aware this was also the subject of my recent punny cheesy newsletter, which thanks to Sam Stein, my editor was titled Who Cut the Cheese, Trump did. Lots of other great puns in there. Apologies. Mateo for that. I'm sure you're sick of all the cheese puns these days. But you know, it's all about the cheddar or lack thereof in the cheddar industry. I would say given the topic and my sense of humor, it was a feta-complete. Yeah. Way, way, way, way, way, way, way, funny. Funny. Well, Mateo, okay, great. We've gotten through just a beginning of the cheese punnery. But can we start with you're just telling our audience how you fell into the dairy industry?

27:07How did you become a cheese maker? Oh, well, it was basically a process. It was a three year conversation with my brother Andy. And you know, we were in our 20s and we were both carpenters building homes, second homes in the night past years of Vermont's failing dairy farms back in the 90s. And we had this extended conversation and came to the conclusion that a whole life is really predicated on three legs of a stool of meaningful work in a place that we love with people that we love. And for us, cheese is the meaningful work part. Cheese is the way that we respond to global economic forces that have been stripping and extracting value from rural communities for the last 50 years.

28:18And in essence, our business is a responsive globalization and an attempt to reverse the flows of capital from rural communities to urban and suburban populations. We want to like, you know, basically flip this grip. We built a pipeline to places where there's disposable income and work. There's plenty of cash and we put high value products into that pipeline. And we suck cash out of places where there's plenty of it and redistribute it in ways that commodity markets don't. Can you say more about that? Why is it that existing commodity markets outside of your business anyway have not rewarded the rural communities in America or elsewhere? I think this is not just America. I think this is globally. If you look at most commodity markets, farmers don't control their price, right?

29:23They are price takers. And in the US, agricultural policy is incentivized over production for the last 50 years. And this has happened under both Republican and Democratic institutions. Food inflation is the third rail of politics. And as we are seeing presently, you know, with escalating, you know, food prices, politicians, you know, do not survive that. And so agricultural policy is really intended to create a surplus. In essence, is a subsidy to processors who have access to, you know, huge, like volumes of undervalued commodities and to consumers who have access to artificially low food, you know, prices in their shopping carts.

30:24And, but that, you know, that value is coming from somewhere. And it's coming from the balance sheets of rural businesses, farmers specifically, who, you know, in the case of a Vermont dairy farmer is paying to milk their cows because the commodity price is below the cost of production. Right. And so all those bucolic, beautiful barns that dot the Vermont landscape, well, they're all falling down now in the farms are gone, you know, schools are closing young people are fleeing. And that's the same story whether you're in Kansas, or Oklahoma, or rural Texas, or, you know, rural Vermont. So you ended up in rural Vermont, you started out, you said, building homes as a carpenter, it seems like a pretty big transition to go from carpentry to dairy farming and cheese making. You mentioned that this was part of your desire to pursue a meaningful life.

31:30You and your brother and your respective spouses, how did you settle on cheese as the way to find meaning in life? The way to find meaning life is to like build community and to build soil and to create impact in a positive way and, you know, a place you call home. Right. So cheese is just a vehicle. But cheese is an original form of capital. You know, European banking systems were built on cheese. Cheese is a store of value. It increases in value over time. And that's how we came to understand, you know, the power of outrageously delicious cheese to be transformative at a community scale is real. We built a market and we're, you know, both lucky and ambitious opportunistic and took advantage of, you know, opportunities that came our way.

32:39We ended up, you know, building 22,000 square foot series of underground tunnels and massive monolithic concrete building where we write them. All kinds of different styles of cheese in these subterranean, you know, climate controlled vaults. We call them vaults because we are financing agriculture in our community in a different way and leveraging, you know, cheese in order to do so. I did not know that history of European banking and cheese. I'm going to have to look into that when we. Yeah, there's still a bank in Amelia Romagna where you can take a wheel of Parmesan or Regiano to the bank and they will put it in their in their vault. And front you 80% of the wholesale value of that cheese on the spot. Right. So there's still, there's still banks that will take cheese deposits in Europe.

33:46Who needs crypto when you've got cheese? I love it. Okay, so you started you can you cannot be crypto. Probably less caloric, but less. So you started a few decades ago. You made this hard transition building from scratch, your own dairy farm, building from scratch, this high quality cheese mini empire. And how has your industry changed in that time? Like the rest of the economy, you know, there's been a huge amount of consolidation, right? There's consolidation at retail. You have Amazon buying Whole Foods, you know, Kroger, a core buying Murray's cheese, one of our, you know, original New York customers.

34:49And in the mid supply chain, you have distributors, you know, swallowing each other whole. And then, you know, our producer, friends and colleagues are also being consolidated. We're the last independent American artist and cheese maker at scale that's left in the US at this point. And I think that's, you know, true across almost all industries. Private equity is, you know, consolidating all kinds of businesses, not just in our industry, but, you know, across the entire economy. That is really narrowed the opportunity for newcomers. You combine that with a lot more regulation, thinking specifically of the Food Safety Modernization Act, which was passed during the Obama administration, which created a lot more bureaucracy, not just for us,

35:51but for all of our customers, right? You know, where we used to operate this business with one QA team member we now need for. And so the costs and the barriers to entry have gotten, you know, greater and greater. And, you know, tragically, there aren't very many small cheese makers becoming medium-sized cheese makers, and there are even fewer medium-sized cheese makers that are growing, right? It's a complicated time out there. And I believe that's probably true, not just in dairy, but, you know, in the food industry as at large. So despite the economic headwinds you just described, you have been able to open up some export markets, or you had been able to open up some export markets. Tell me a little bit about that process. What share of your business is export today?

36:52Zero percent of our business is export. Now there's a couple of different reasons for that. They all start and end with, you know, Trump administration, policy in one way or another. But, you know, we were selling American cheese to the French market just year before last, right? Exporting cheese to Europe, Australia, and we spent 10 years building an opportunity in Canada. You know, we're two hours from Montreal, which is I would say the best cheese market in North America. You know, Quebecers understand cheese. There's a cheese culture right across the border. And they have supply management system for their dairy industry. So, you know, in order to export cheese into that market, you need quota. We had what we have a great relationship with an importer in Ontario,

37:59who allocated quota to our brand and was bringing our cheese, and then we're growing very quickly. So, sorry to interrupt. Let me just pause for a second just so our audience understands. What this basically means is that there's a set amount of cheese that can be sold into Canada, right? And that that's the quota. And then anything above the quota basically has historically had a prohibitively high terra freight. So, you want to be part of the quota allocation, which your company was. Okay, sorry, you lost. Exactly, yeah, exactly. And so, once we had an importer, and once they had dedicated quota to Jasper Hill, we were able to start building a market and selling cheese into the Canadian market. And that was going gangbusters. I mean, it was by far the fastest growing part of our business. February of last year, Trump tariffs were announced, but it was also this rhetoric around

39:08Prime Minister Trudeau being a governor and Canada being the 51st state that I think really was offensive at its core to our Canadian neighbors. And while our cheeses weren't being tariffed, our sales basically dropped off a cliff. Our February 2025 pre-order had zero cases of cheese on it. I mean, it really went from, you know, rip or or through the holidays, January was amazing. And February was like hard stop. And, you know, we understand, we understand, we empathize with our Canadian neighbors. I believe that we all need to make some sacrifices. And Canadians are voting with their wallets. They are digging their heels in and

40:10resisting the creep of fascism and the threat that that kind of rhetoric really plays both to their economy and their culture and their identity as Canadians. So, you know, I believe I would probably be doing exactly the same thing. So you empathize with Canadians boycotting American goods, even when those American goods are made by you? Yeah, I mean, it hurts, right? This hurts, but we have friends on the other side of the border who are making cheese, living the same lifestyle, you know, milking cows and, you know, they were exporting cheese into the US market and they lost their market too, right? There's no, there are no winners here. Everybody in our region is losing. There are no winners. So I have no like qualms about, you know, calling a spade a spade. Everybody around us is suffering right? Whether it's, you know, inflated higher cost of goods and groceries or, you know, the

41:18absence of Canadian and Quebec tourists, the, yes, the real significant downturn, whether you're in the ski industry, mountain biking, you know, we have a brewery right next door. Everybody is, is hurting. And the same is true on the other side of the border, you know, we, this, this part of Vermont, it's not uncommon to have family members on both sides of the border, you know, and people go to school on both sides, you know, of the border. Do their shopping both sides of the border. And 60% of Vermont's exports, international exports are to Quebec, right? And it's all right. It's all right there. It's, it's, it, it is, it's very painful. But it's not just painful for us, you know, it's painful for businesses and for families on the other side of the border too. I can't tell who's winning. I mean, there's like, there's no winning. There's no winners here. So Mateo, one of the reasons I was so interested in talking with you and learning

42:21more about the dairy industry and how it was affected by these trade wars is that I had been under the impression that the US dairy industry was supposed to be the one winner from our trade war with Canada. Trump talks all the time about how he is furious about how poorly Canada has treated American dairy, that they have these, you know, multi-hundred percent tariffs on US dairy. And that that was like the only specific concrete thing he's often able to cite for why he's mad at Canada. It's because of our dairy farmers. Is there any truth to that? Is there some beef going back about how the Canadian government has treated US dairy? The answer is yes, right? They have a supply management system, but they also have it for pork and chicken and maple syrup and a lot of other commodities. You know, it's striking to cross the border. In Vermont, you have this

43:25generational poverty that's been playing out on dairy farms across the landscape. You cross the border and farms are prosperous. There's new trucks and tractors. Things are tidy houses, painted barns are well kept and maintained. You can tell that farmers, dairy farmers are building equity. The cost of that, you know, is a higher priced dairy products in that market. Meanwhile, in Vermont, when we started milk and cows here, there were 1200 dairy farms. And we've lost 50% of our dairy farms in the last 10 years. We're producing the same amount of milk. Right? So, you know, the way we see a dairy farm, it's a huge cash cyclor within a community. It supports all kinds of ancillary and tangential businesses that cycle capital at a community scale.

44:29When you lose a farm, you're losing, you know, this cash cyclor. We have 401 farms, the less, you know, kind of census. I get a report from the agency agriculture on a monthly basis and we're down, we're just about under 400 farms left. These farms are much, much bigger. Right? Their environmental footprint is also much, much bigger. Right? We're getting to a place now where if you're not milking a thousand cows and planning 600 acres of corn, you're not viable. And as I was talking about, you know, the role of commodity markets in supporting these undervalued and subsidized commodities for consumers, this is what it means. Right? It means essentially a holocaust on a landscape scale is taking place. And farms that have been in

45:36production for generations are disappearing. And what's disappearing with them is no kids. They're no kids in our school because they're no farms. Right? And if you're in farm country and there are no farm kids, you don't have a school. And if you don't have a school, you lose a beating heart of your community. You cross the border into like Canada and it is completely different. It's a different feeling, you know, it's palpable. And I believe honestly, the Canadian dairy farmers are way better off with their, you know, supply management system. And honestly, we should probably be looking in that direction too. Well, I can, given what you've described as the trajectory of this industry in Vermont and elsewhere, I can kind of understand why rural voters may have seen some appeal in the promises that Donald Trump gave them, that he was going to burn

46:36it all down basically. And he was going to reclaim all of this money that was going to the wealthy for the common man, to the swamp for the common man. It doesn't quite seem like it's worked out that way. I'm curious, what is your perception of how people in rural Vermont or other rural areas to the extent that you're talking with, people in your industry and other states, how they feel about the trade wars and the policy choices that this administration has made. Do they, are they angry? Do they think it's, you know, it's heading in the right direction? There's big dairy, right? And then there's like the rest of us. I think it's important to, disentangle that there are massive, we're arounding it, okay, within the dairy industry. We are

47:42essentially insignificant, except we've built a very powerful brand. If you're a farmer and you're selling commodities, you have no identity, you have no power to affect your experience and our neighbors, a lot of whom voted for Trump. We are in Bernie country just to be transparent. In Bernie, carried the Northeast Kingdom for a generation. And Vermont farmers would have voted for Bernie because he was talking about making some of the same kinds of changes, right? The thing about Trump policy is it's not really rooted in a coherent philosophy. I think it's become clear to anybody who is paying attention that it's just a massive kleptocracy at this point.

48:47So the amount of self-interested economic decision-making that's going on generally has nothing to do with like, you know, dairy farmers. If it had, the tariffs would have been much higher. And they would have been paired with, you know, agronomic and industrial policy to rebuild industry and agriculture on this side of the border. But they weren't, right? The Trump administration has put in place pretty formidable tariffs on Canadian dairy. I think there are 50% tariffs on Canadian cheese coming into this country at this point. Some Canadian dairy products are now outright banned from import, various kinds of way protein products. Has that been helpful to you? No. I mean, mostly because, you know, there, I don't think there was a lot of

49:48Canadian cheese coming into the market to begin with. And unless it's paired with a level of investment in capacity, there's anything anybody can really do. You know, if you look around the dairy industry in Vermont at a processor level, there, you know, we just, we've had four processors leave the state, right? In the past two years. Our processing capacity has just been gutted. And it has to do with like lack of access to investments at municipal scales for like industrial waste water to support like dairy processors. And it's not the marketing that's, and the market access piece that's missing here is it's infrastructure, right? And a lot of that infrastructure, money that the Biden administration passed was like canceled. And, you know, if you're in a

50:52blue state, you're particularly, you're, you're being punished for your geography. So, you know, I think the thing about tariffs is they might take a generation to have an impact. And they won't really have an impact unless they're part of a coherent industrial policy and investment, you know, markets are historical and political constructions, right? There's a lot of things that are changing here right now. And ultimately, you know, the market that we end up with on the other side of this is going to be dependent on a product of, you know, the politics at the moment. I think what I'm saying is that it's probably too early to tell whether that's going to make much of a difference. And I don't think it's going to make much of a difference unless it's like coupled with industrial policy that uncoorks the productive capacity of processors to take advantage of the

51:55opportunity. But, you know, interest rates are very high. And the federal government hasn't really been, you know, dishing out dollars to, you know, states to build like infrastructure in the way that you would need to in order to, like, really harness the opportunity. Well, in addition to the tariffs on Canadian cheese, as I understand it, there are also pretty high tariffs on European cheese, which I imagine we do import quite a bit more of, and that you may face more competition from the usual argument in favor of tariffs is something like, well, if you make the foreign version more expensive by taxing it, that will divert more customers to the domestic product because by comparison, it's more attractive because it's cheaper. Have you at least benefited in the near run from that from tariffs on European, you know,

52:56Italian or French cheeses? No. In fact, I think the tariffs have hurt us because from what I understand and things may have changed, but I don't think that I don't think they have recently is that those tariffs are like 10 to 15 percent. And that is just enough for importers, distributors, and retailers to blend out the impact of by taking higher margins on domestically produced cheeses, right? So one of the things that we've been experiencing is and seeing at retail and through distribution is that distributors and retailers are taking higher margin on domestically produced cheeses like hours in order to lessen the pain for consumers

53:58of the tariffs on Swiss, French, and Italian, Spanish cheeses that are coming into the market, right? That slows down our movement and volume because our cheeses are carrying more of that burden, which is kind of the perverse effect and unintended consequence of that policy. If they were 50 percent tariffs, that might not be possible, right? And the 50 percent tariffs are the absolutely like stopped cheeses from coming back coming into the market. But I just take a step back, you know, one step further and say that like our customers are really suffering. And when I say our customers, I'm talking about the distributors and retailers that we're working with. This is hurting them because the domestic capacity to produce, I don't know, rogue for, or grier, or Pommajano Regiano,

55:00these iconic, you know, PDO, you know, protected designation of origin cheeses, doesn't exist and never will here, right? And so you can't make Parmesan cheese and you can't make a cheese that and to first go to Parmesan. And call it Parmesan or Regiano, right? Right, you can't call it that. You can't call it that, right? And consumers want those cheeses. I would love it if we had a vibrant, you know, artists and, you know, cheese industry that was at scale that could fill the void for American consumers. But when our customers are suffering, that's not good for us either. Right? So I think there's a couple of different things going on with tariffs in different markets and, you know, on the one hand, you know, you're really putting tariffs on a dairy

56:01industry that's already constrained by supply management. It's not like they're making tons of extra cheese up there. And they're certainly not exporting, you know, tons of it down into the US market. And on the European side, the tariffs, if you really want to make a change in like domestic production are set at a level where they are more like an irritant and something that just increases the uncertainty and the bureaucracy and the cost of, you know, doing business and those costs are all being passed on to consumers and everybody's seeing that and their higher grocery bills. And I imagine that, well, if it is the case that at the retail counter, they're spreading the cost of these tariffs across all the cheeses, not just the ones that are being directly tariffed because

57:01they're foreign-produced cheeses. That's going to raise the cost of everything for consumers that might make it more difficult for consumers to buy as much cheese. That's probably going to reduce demand for your cheese as well in addition to the Parmesan or the Swiss cheese or what have you. Talk to me also about how the tariffs have affected the things that you buy because it's not only cheese, right? We're talking about dairy and isolation that's been tariff, but it's lots of other things too. It is lots of other things and, you know, one of the issues that we're dealing with now is a price increase on the uncoregated boxes. Our boxes are manufactured here in Vermont, but they're the paste, the pulp, you know, the processed pulp is producing Canada and is being tariffed as it crosses the border, right? So our cost of packaging is going way up. We're expecting

58:04something like a 30% increase over what we were paying, you know, pre-tariffs. The cost of equipment manufactured in Quebec, you know, looking behind us, there's a lot of stainless steel, a lot of our cheese making equipment and our molds are produced in Quebec. They're either going to come across without tariffs, depending on what the product actually is, or it could be 50% tariffs tariff on steel and aluminum, you know, are going to get whacked. And we've already experienced that we have an, we're upgrading our other cheese plant in the middle of a big equipment upgrade. And about half of our equipment came from, I could back it was ordered pre-tariffs. And

59:06you know, we got slammed after the fact with, you know, additional costs makes it really hard to like budget or keep up with the escalating costs of just construction materials, like generally, it's been kind of a nightmare. And diesel, I imagine as well, I think you mentioned that earlier. Oh yeah. That's a different policy. Yeah. Yeah. Well, we lost our Australian market when we found out that our cheese was being crossed out and Dubai. And so aside from the logistics disruption around transportation in the Middle East, the cost of fuel and fertilizer has just gone through the roof. No, pre-Ukraine war, you could buy fertilizer, Urea for about $200, $150 to $200 a ton. And

1:00:14this past summer was over $1,000 a ton. Right. And, you know, we don't use chemical fertilizer that way, but it's affecting farmers across the whole country, right? That and, you know, $7 like diesel is going to drive cost of production up. And if you don't have the margins and whatever commodity you're participating in to absorb those costs, you're going out of business. Right. So there's, this is going to be existential for the agricultural community at large and for our food system. Now, I think we're at the beginning of an inflationary period that at this point doesn't really have an end in sight. And, you know, I think voters, and I know I can speak for like world remunners

1:01:14specifically are they've had it, right? Our neighbors who, you know, voted for Trump are have nothing but regret. And, you know, Vermont is going to go glue. It'll be the first state to be called. And, you know, yeah, yeah, I'm not sure Donald Trump is so worried about losing the vodka. He's not too worried about losing the vote up here. But I think, you know, the consequences are coming. And I hope that they will be decisive and swift here, you know, and we're in it for a while. Yeah, I mean, it does sound like I'm listening to all the things that you're rattling off. So we, Donald Trump, through his policies, has has ticked off your customers abroad such that they're no longer buying your goods, even if they are not being tariffed, which in places like

1:02:17Canada, they are. He has made your inputs like diesel and equipment more expensive. The tariffs sufficiently destabilized your downstream customers so that it sounds like their costs and ability to make purchase orders from you might be somewhat affected. And then the things that they are selling, the products of yours that they are selling are getting more expensive because they're passing along some of the tariffs to, to, to, to those items. And then you have assorted other policies like, say, rattling against the Canadians, which presumably is not going to endure our product, or your products rather. And honestly, like the bond market, which is affecting everybody. Interest rates, we're debt finance business. I think we're in it for the long haul. We've got a $40 trillion deficit. And, you know, there is no longer any concern about that on the

1:03:26Republican side. At this point, you know, it is absolutely insane. We're spending more on interest than on defense at this point. It's, you know, this is a, there's a cumulative, it's an accumulation of like pressures. And, Catherine, I'll tell you, we're, we're going to be okay. We're not about to like, you know, faltering, go out of business or anything like that. We are adapting and we're going to, you know, figure out how to center our people and do the right thing by the farmers that we work with and, and, and roll with it. But I think we're in for some, you know, stormy weather for a while. And we're, you know, batting down the hatches because none of this is actually sustainable, like at a societal level. Well, I'm glad to hear that Jasper Hill Farm will be okay because the world needs your cheese.

1:04:28I am saddened to hear about the struggles that the industry is currently enduring, particularly when so much help had been promised. For those who are interested in these products, you can find them at Jasper Hill Farm.com or at your local cut to order cheese counter, Mateo. Thanks so much for joining me today. Thank you. And let's not forget. Cheese actually has been with us from time immemorial. It's prim, primordial and, you know, it will be with us, you know, until we cease being human. I think, you know, my, I have a lot of optimism about the future of cheese. So thank you all. And thanks for supporting our work and thanks Catherine for telling our story. Thanks for watching and listening to receipts. Make sure to follow the feed and subscribe wherever you get your podcasts. Bye for now.