This Scott Bessent Interview Got Weirder by the Minute

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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 Catherine. We also talked about the state of the economy, because that's what she talks about on her podcast and how all of Bess's interventions have really not worked and how we shouldn't be totally surprised because in actuality, his business history prior to joining the administration wasn't all that great. Now 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 Podcasts, Spotify, YouTube, and more. Basically anywhere you can listen to podcasts, you will find it. You can also get it on our website, thebullwork.com slash receipts. That's thebullwork.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 Rampell, economics editor here at The Bullwork. We have a big show today. It's a doubleheader. Sam Stein is going to join me to talk about Scott Besson's interesting interview recently with Axios. That's Besson, 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 about 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 Matteo 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. Matteo 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 hubristic things he said about his interventions with the bond market. Let's play that. Last month, you told the markets, I am the house now. They bet against you at their peril. Do you regret saying I'm the house now? No, because look, the house doesn't win every hand. The house plays the percentages. And, you know, like, look, that I maybe they hurt some fragile egos on Wall Street that I always had respect for the market. And 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 slapped back. No, it didn't. How did it slap back? The rates went up, but oil went up. I could say, OK, yes, yesterday we had the we had the first full allocation since we have expanded our Treasury buybacks and rates collapse. There's nothing causal there. It was it was coincident. The Financial Times, probably your favorite paper, said Besson fails to break fever in U.S. bond market. What did you learn from that? Well, I learned that the Financial Times is anti-American, anti-business. They and they have a fever. They're constantly trying to create a problem for the U.S. But let's let's leave that disgraced publication of London aside. Yeah, this is an interesting way. And 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 gone woke. Clearly. 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. The 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 hubristic while you're calling yourself the house and defending it is a little bit, you know, a little ironic, I suppose. He's an interesting character, right? And you know more about this than I do. But 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 stoop 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, there are always going to be some data points you can look at and say, ah, see, I was right to say I'm the house. But I think in the aggregate, if you look at the current macroeconomic situation, it's pretty bleak. And I'm not just looking at the data around jobs numbers, which was fairly putrid when they came out on Friday. But you look at, you know, I don't know, the 10-year treasury, it's what is it like over 7, 7.3 now? And then mortgage rates, the 30-year fixed. I mean, I'm looking at this. Now it's 7.43. 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, you know, 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 Druckenmiller to take back in the 90s against the pound. That there was a bet at the time that the Bank of England was trying to basically like do something that markets did not want them to do, that market fundamentals did not want them to do, that they were like, they're 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 Besant 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. Sort of the inverse, right? Yeah. Where back then, the house was the Bank of England and markets were right, as Besant 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 on those bonds. And the market bet against him and seems to have won. He's like, oh, no, you know, the house doesn't always win. What did he say? He said the latest offering was all. All allocated. So is there more flexibility there than we're realizing? Is there more money willing to buy U.S. 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 like more. Where are they getting all this money? 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 5000 dividend. I mean, it's like money is just coming from accounts that I think we didn't know were so ripe and plush. Yeah, I know that some of this is magic money that may never materialize. Some of it may be illegally diverted. Jonathan Cohn and I had a discussion about this earlier about some of the money that's like going out from to ACA. And I think that's a really good point. I think that's a really good point. 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 some flexibility around your. When is the debt ceiling deadline? Do we have a rough idea? Later this year is when we will officially hit the debt ceiling, but then they can move money around. This is what normally happens, right? You have a little runway. You have a little bit of runway where they like. Play bold, win big. Engage in some creative accounting, basically, to delay actually defaulting on our debt, and that gives us a few months. I don't know. That's called the X date, when we were like actually, actually run out of money. Yeah. Here's the good thing and 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 don't know. We'll see. Come on. This is a pretty unruly Congress. You know that's how it plays out. Yeah, but it usually plays out that way. Well, I hope you are right. I certainly hope you are right. I'll take them. I'll take them. I'll take them. I think that we will have less runway either way for them to, for members of Congress to figure out how to be right on this issue if Besant is, you know, stealing from like the money that's been socked away under the mattress just in case of a rainy day. But this is not the only interesting thing that came out of that interview, by the way. So there was also this bizarre exchange about Besant's sexuality. And I don't know if we have it. Bizarre 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. You know, he'll occasionally tell you, tell me, you know, you're breaking Melania's 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. But 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 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 Druckenmiller and George Soros. And then when he struck out on his own, as you point out, he lost 90 percent of his fund's 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 got to say, we have a pretty big community here at the Bulwark, a lot of readers from different walks of life. So if you happen to be one of Melania's crestfallen friends who's 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 want Scott Besson's confidence. I want that confidence. That's incredible stuff right there. I'm the house. Friends all love me. Like, what is this guy? He's he's great. I have a great scorecard. Oh, my scorecard's fantastic. Yeah. Despite the fact that I lost 90 percent of the value of my fund. 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 with. Didn't he almost throw it out with Bill Pulte or something like that? Bill Pulte 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 was like, OK, I guess this is how I'm going to do it. I'm going to do it. I'm going to do it. This is how this is how the members of the Trump cabinet settle their. This is what Janet is very vintage. Janet Yellen. She's the same thing. Yeah. Senate hearings. Yeah. 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's assembled a different kind of cabinet that when I have a question on the energy to be able to talk to Secretary Burgum, Secretary Wright, both was substantial experience. And look, I don't think I'm the most. Believe me, I'm far from the most. Well, you've joked that dueling among Treasury secretaries. Go back to Alexander Hamilton. You have had some heated confrontations. Yeah, that I would say that I stand my ground like Alexander Hamilton fired if fired upon. And I always point out did not end well for Treasury. The Alexander Hamilton Aaron Bird duel. So 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 when fired upon fired to share a warning there. Yes. So he understands. I think he misunderstands how a dual 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 you shoot. Yeah. Yeah. Just that's how I understand dueling. Yeah. Well, I don't know. A story of Alexander Hamilton. He he did not fire when fired upon. So, yeah, that was true. Yeah. Did not work out so well for him. OK. 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 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 MAGA agenda. That's I will say this about him. He. For someone who's never been involved in politics prior to this, as far as I know, um, he's definitely kind of adopted more of a political, uh, persona, right? Like he's, he's clearly figured out how to play the game. Um, and seems a lot more comfortable kind of in that role than he did early on, uh, where he was a newbie to Washington, which to your point that we're talking about off there, I guess does suggest maybe he has a taste for the game and he, and he sees himself as a longer term fixture in GOP politics. Yeah. I have 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 that is of his interest, whether it's of anybody else's interest. I don't know. That's like, what is it? What does he bring into the ticket? Um, yeah, he was asked about this. Uh, well, he was asked about whether he had a desire to stay in politics because remember he had to do one of those, um, step in press briefings for Carolyn Leavitt when she was on maternity leave, he went and appeared on the podium and he was asked, uh, he was asked about this, you know, you're following the footsteps of, like Rubio and Vance who had done it earlier. The question that he was posed was, does your presence here today indicate that we might see you running in 2028? And, uh, he responded, no, 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. Um, so we'll see, maybe, maybe not. Yeah. Yeah. Um, well, if, if these are his ambitions, he's free to leak them to the bulwark. We'll be glad. Yeah. Right about it. Absolutely. In the meantime, we have more Trump comments on inflation and checks. Let's play, uh, his latest in talking. 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 that room? Sorry, it wasn't just inflation, just to be clear. He knows more about, I think, was it anything and everything than anyone in the room? Is that the right quote? I just want to be sure. Literally he knows more about everything than anyone. Come on. Yeah, he's omniscient. I know he knows more about grass. He's 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. Engineering or something. I don't know. Rocket engineering. Yeah. He knows about people and hearts and yeah. What does this guy not know? He's so smart. It's amazing. Yeah. The biggest IQ. Why do you feel the need to put down the woman in the front row? He was kind of lifting her up and then he was like, "Actually, no." I don't know. He's all about negging. He likes to neg his supporters. He likes to neg the- Ken Paxton? Ken Paxton. At a recent rally in Ohio, he insulted Husted and Vivek Ramaswamy for, I don't know, not being that appealing. He 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, "If you hate Donald Trump, go vote for something else that the party wants." Yeah. Yeah. That's his MO. That's his MO. He's the pickup artist, right? What a guy. Yeah. He is like the pickup artist. What a good pull there. Wow. I forgot all about that guy. Yeah. But he does neg. He does neg. He perfected the art of negging. Yeah. Yeah. All right. Well, thanks, Sam, for chatting through the latest- Absolutely. I'm just 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, but you know what? And then I added them all 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." Yes. That was all Sam beautifully done. One of my finest pieces of work. Yeah. I cannot take credit. Sam is. He may diss the fans. He may diss the fans of punditry out there, but actually, he likes it. He secretly likes it. I do. I admit. 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. 30% off a Bulwark Plus membership at thebulwark.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. Bulwark. Yeah. Exactly. Bulwark membership supports independent journalism committed to truth and reason, not scoring points for the red team. Red team or the blue team. We are on Team Democracy. We are not beholden to billionaires or MAGA 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, written reporting, and frankly, more of us, more of this fine chitchat, tete-a-tete, with Sam Stein and me. You don't want to promise our audience more scintillating conversation? It's good. Go to thebulwark.com/surprise to get 30% off Bulwark Plus for the next year on thebulwark.com and Substack. I am delighted to be joined by Mateo Keeler. He is the CEO and co-founder of Jasper Hill Farm. For those of you unaware, Jasper Hill Farm makes these exquisitely delicious cheeses. You'll find them at Michelin-starred restaurants, at your local cheesemonger, at the cut-to-order cheese counter, at, I think, Whole Foods and other big, high-end, organic 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 Winnemere cheese, which was described as rich, bark-wrapped, 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 has, in the past, said was one of his top priorities. 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, Matteo, for that. I'm sure you're sick of all the cheese puns these days. But, you know, it's all about the cheddar cheese. The cheddar, or lack thereof, in the cheddar industry. I will say, given the topic and my sense of humor, it was a fait accompli. Yeah. Way, way, way, way, way, way funny. Funny. Well, Matteo, okay, great, we've gotten through just the beginning of the cheese punnery. But can we start with, you're just telling our audience, how you fell into the cheese industry? How did you become a cheesemaker? 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 pastures of Vermont's failing dairy farms back in the '90s. So, we were both carpenters, building homes, second homes in the night pastures of Vermont's failing dairy farms back in the '90s. And we, you know, we had this extended conversation and came to the conclusion that a whole life is really predicated on, you know, like three legs of a stool of, you know, 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. And in essence, our business is a response to globalization and an attempt to reverse the flows of capital from rural communities to urban and suburban populations. So, we've built a pipeline to places where there's disposable income and where 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 become not rewarded the rural communities in America or elsewhere? I think this is not just America. I think this is, you know, globally. If you look at most commodity markets, farmers don't control their price, right? They are price takers. And in the U.S., agricultural policy has incentivized overproduction for the last 50 years. And this has happened under both Republican and Republican governments. 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, which in essence is a subsidy to processors. Who have access to, you know, huge like volumes of undervalued food. uh, commodities and to consumers who have access to artificially low, uh, food, you know, uh, prices in their, in their shopping carts. And, um, but that, you know, that value is coming from somewhere and it's coming from the balance sheets of rural, uh, businesses of 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 and 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. LoneStarCasino.com is an absolutely free to play social casino with thousands of games, daily bonuses, free spins and jackpots that pop like fireworks. LoneStar Casino is a free to play social casino. Voidware prohibited. Play bold, win big. You mentioned that this was part of your desire to pursue a meaningful life. You 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 in life is to build community and to build soil and to create impact in a positive way in a place you call home. So cheese is just a vehicle. But cheese is an original form of capital. Um, you know, European banking systems were built on cheese. Cheese is a value. It increases in value over time. And that's how we came, uh, to understand, you know, that, um, the power of outrageously delicious cheese to be transformative, uh, at a community scale is, is real. Um, we built a market and we are, you know, both lucky and ambitious opportunistic and, uh, took advantage of, you know, uh, opportunities that came our way. Um, we ended up, you know, building a 22,000 square foot series of underground tunnels and this massive monolithic concrete building where we ripen, uh, all kinds of different styles of cheese in these, uh, subterranean, you know, climate controlled, um, vaults. We call them vaults because, um, we are financing agriculture in our community in a different way and leveraging, you know, uh, 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, uh, Emilia Romagna where you can take a wheel of Parmigiano Reggiano to the bank and they will put it in their, in their vault. And, uh, front you 80% of the wholesale value of that cheese on the spot. Right. So there's still, there's still, uh, banks that will take cheese deposits in Europe. Who needs crypto when you've got cheese? I love it. Um, okay. So you started, you can, you can, you can not eat crypto. That's true. That's true. 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, uh, um, high quality cheese, mini empire. And how has your industry changed in that time? Like the rest of, uh, the economy, you know, uh, there's been, uh, a huge amount of consolidation, right? There's consolidation at retail. You have Amazon buying whole foods, uh, you know, Kroger, uh, Corp buying Murray's cheese, one of our, you know, original, uh, New York customers. And in the mid supply chain, uh, 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, uh, independent American artisan cheesemaker at scale that's left in, in the U S at this point. And I think that's, you know, true across almost all industries. Private equity is, um, you know, consolidating all kinds of businesses, uh, not just in our industry, but, you know, across the entire economy. And that, that has really narrowed the opportunity for, uh, new comers. Um, you combine that with, uh, a lot more regulation thinking specifically of the food safety modernization act, uh, which was passed during the Obama administration, which, uh, created, uh, a lot more bureaucracy, not just for us, but for all of our customers, right. You know, where we used to operate this business with one QA, uh, team member we now need four. So the costs and the barriers to entry have gotten, you know, uh, greater and greater. And, you know, uh, tragically, there aren't very many small, uh, cheesemakers becoming medium sized cheesemakers and there are even fewer medium sized cheesemakers that are growing, right. It's a, it's a complicated time out there. And I believe that's probably true, not just in, um, in dairy, but you know, in the food market. Yeah. So despite the, um, 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. Uh, what share of your business is export today? 0% of our business is export. Now there's a, there's a couple of different reasons for that. Um, they all start. And with, you know, Trump administration policy in one way or another. Um, but you know, we were, we were selling, uh, um, American cheese to the French market, um, just year before last, right. And exporting cheese to, uh, Europe, Australia, and we spent 10 years building an opportunity and, um, in Canada, you know, we're two hours from Montreal, which is, I would say the best. The best cheese market in North America. It's, you know, Quebecers understand cheese. There's a cheese culture right across the border and, um, they have a supply management system, uh, for their dairy industry. So, you know, in order to export cheese into that market, you need quota. We had, uh, well, we have a great relationship with an importer in, um, in Ontario, uh, who allocated, uh, quota. Uh, to our brand and was bringing our cheese in and we're growing very quickly. So, sorry to interrupt. Let me just, uh, 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, um, sold into Canada, right. And that that's the quota. And then anything above the quota basically has historically had a prohibitively high tariff rate. So you want to be part of the quota allocation. Which your company was. Okay. Sorry. Exactly. Yeah, exactly. And so, uh, once we had an importer and once they had dedicated quota to Jasper Hill, um, we were able to start, um, 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, um, Trump tariffs, um, you know, were announced, but it was also this rhetoric around, um, uh, prime minister Trudeau being a governor and Canada being the 51st state that I think really was offensive, you know, at its core to the Canadian, our Canadian neighbors. And, you know, while our cheeses weren't being tariffed, our sales basically dropped off a cliff. You know, our, our, our February, 2025, um, pre-order had zero cases of cheese, right? I mean, it really went from, you know, rip roar through the holidays. January was amazing. And February was like hard stop. And, you know, we understand. We understand. And we 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 resisting the creep of fascism and the threat that, you know, that kind of rhetoric really plays both to their economy and their culture and their identity as Canadians. And, 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 U.S. 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 qualms about, you know, calling a spade a spade. Everybody around us. Is suffering, whether it's, you know, inflated, higher cost of goods and groceries or, you know, the absence of Canadian and Quebec tourists, the just a real significant downturn, whether you're in the ski industry, mountain biking. You know, we have a brewery right 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, people go to school on both sides of the border, do their shopping both sides of the border. And 60 percent 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 is 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, Matteo, one of the reasons I was so interested in talking with you and learning more about the dairy industry and how it was affected by these trade wars is that I had been under the impression that the U.S. 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 U.S. 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 U.S. 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 generational 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 are painted. Barns are well kept and maintained. You can tell that farmers, dairy farmers are building equity. The cost of that, you know, is higher priced dairy products in that market. Meanwhile, in Vermont, when we started milking cows here, there were twelve hundred dairy farms and we've lost 50 percent 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 cycler within a community. It supports all kinds of ancillary and tangential businesses that cycle capital at a community scale. When you lose a farm, you're losing, you know, you know, this cash cycler. We have four hundred. Four hundred and one farms. The last, you know, kind of census. I get a report from the Agency of Agriculture on a monthly basis and we're down where we're just about under four hundred 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 planting six hundred acres, you're not going to be able to do that. You're not going to be able to do that. If you're not milking a thousand 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. And what's disappearing with them is, you know, kids. There are no kids in our school because there are no farms. Right. And if you're in farm country and there are no farm kids, you're 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 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 it all down, basically. And he was going to reclaim all of this money that was going to the wealthy for the common man or 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 of the state are going to respond to this? To the extent that you're talking with people in your industry in 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. And I think it's important to, you know, disentangle that there are, you know. Massive we're a rounding error, OK, within the dairy industry. We are essentially insignificant, except we have 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, you know, a lot of whom voted for Trump, you know, we are in Bernie country just to be. Transparent, you know, and Bernie carried the Northeast Kingdom for, you know, a generation and Vermont farmers would have voted for Bernie because he's 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. So 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 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 percent tariffs on Canadian cheese coming into this country at this point. Some Canadian dairy products are now outright banned from import. Various countries. I mean, you know, there are so many different types of dairy products, all kinds of whey protein products. Has that been helpful to you? Uh, no, I mean, mostly because, um, you know, there, I don't think there was a lot of Canadian cheese coming into the market to begin with. And unless it's paired with a level of investment in capacity, there isn't anything anybody can really do. You know, if you look around the dairy industry in Vermont at a processor level there, um, you know, we've, we just, we've had four processors leave the state, right. Um, in the past two years, our processing capacity has just been gutted. Um, and it has to do with like a lack of access to investments at municipal scales for like industrial wastewater to support like dairy processors. And it's not the marketing that's, um, and, and the market access piece that's, that's missing here. It's, um, it's infrastructure, right. And, um, a lot of that infrastructure, uh, money that the Biden administration, uh, passed was like canceled. And, you know, if you're in a blue state, you're particularly, you're, you're being punished, uh, for your geography. Um, so, you know, I think the thing about tariffs is, uh, they might take a generation to have an impact and they won't really have an impact unless they're, uh, part of a coherent industrial policy, uh, 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, uh, and a product of, you know, the politics of 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 uncorks the productive capacity of processors to take advantage of the opportunity. But, you know, interest rates are very high and, um, the, uh, federal government hasn't, uh, really. Been, you know, dishing out, uh, dollars to, you know, states to build like infrastructure in the way that, uh, 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 were also pretty high tariffs on European cheese, which I imagine we do import. So I think that's a good thing. I think that's a good thing. the fact with, you know, Additional cost 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 not a tariff issue. That's a different policy. Yeah. Yeah, well, we lost our Australian market when we found out that our cheese was being cross-stocked in 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. You know, pre-Ukraine war, you could buy fertilizer, urea, for about. About $200, $150 to $200 a ton. And this 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 in 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. You know, 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. And I know I can speak for, like, rural Vermonters, specifically, are. They've had it. Right? Our neighbors who, you know, voted for Trump have nothing but regret. And, you know, Vermont is going to go blue. 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 Vermont voters. He's not too worried about losing, you know, the vote up here. But. But. I think, you know, the consequences are coming. And I hope that they will be decisive and swift here. You know, I think 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 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 Canada, they are. He has made your inputs, like diesel and equipment, more expensive. The tariffs have 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 those items. And then you have assorted other policies, like saber-rattling against the Canadians, which presumably is not going to endear our product. Your products, rather. And honestly, like the bond market, which is affecting everybody. Huh. Interest rates. We're a 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 Republican side at this point. You know, it is absolutely insane. We're spending more on interest than on defense at this point. And so, you know, this is a. There's a cumula. It's an accumulation. Of, like, pressures. And, Catherine, I'll tell you, we're going to be okay. We're not about to, like, you know, falter and 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 roll with it. But I think we're in for some, you know, stormy weather for a while. And we're, you know, battening 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. I 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 jasperhillfarm.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 primordial. And, you know, it will be with us, you know, until we cease being human. I think, you know, 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. Crown Coins Casino. Winning never sounded so good. What would you do if you won big? At Crown Coins Casino, real people win real prizes every single day. Hi, this is Michael from Dallas, and I won 40K and finally renovated my home. Visit crowncoins.com. Sign up in seconds. Enter code CROWN. And get a free Lucky Wheel bonus. You may win up to 10,000 Sweeps Coins. crowncoins.com. That's C-R-O-W-N, coins.com. 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