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Attempts Continue to Evacuate Civilians from Steel Plant in City of Mariupol, Ukraine; Reports Indicate Russian Forces Destroying Bridges in Northeastern Ukraine to Slow Down Counteroffensives from Ukrainian Forces; U.S. Jobs Report Stronger than Expected for April; President Biden Addresses Continuing Concerns over Inflation. Aired 10-11a ET

Aired May 07, 2022 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[10:00:06]

(BEGIN VIDEO TAPE)

CHRISTI PAUL, CNN ANCHOR (voice-over): Happening now in the Newsroom, the race to rescue civilians still trapped in bunkers underneath that besieged steel plant in Mariupol.

And heightened fears that Russia could soon formally declare war on Ukraine.

President Biden touts a better-than-expected jobs report, but acknowledges inflation is still top of mind.

JOE BIDEN, PRESIDENT OF THE UNITED STATES: I know you're worried about the price of gas, food, and other necessities.

PAUL: How the Fed is hoping to bring down inflation without sparking a recession.

New details in a manhunt for that escaped Alabama inmate and the corrections officer who allegedly helped him get away.

UNIDENTIFIED MALE: We're back to square one as far as the vehicle description right now. They found the car, but we knew where they were going.

PAUL: What we're learning about that recovered getaway this morning and where the search goes from here.

Officials in Washington brace for more protests following the leaked draft Supreme Court opinion that would strike down Roe versus Wade, the security concerns and how a vote to codify the legislation is expected to play out next week.

UNIDENTIFIED MALE: I don't want anybody turning on the faucet and not have water.

PAUL: Mandatory water restrictions are coming for millions of you in the west. The dire warnings from officials and why they say waiting to act isn't an option. And it's derby day. The first leg of the Triple Crown kicks off today.

We're at Churchill Downs with you. Newsroom starts right now.

(END VIDEO TAPE)

PAUL (on camera): I want to wish you a good Saturday morning. It is May 7th, and we are so grateful for your company. I'm Christi Paul.

ALEX MARQUARDT, CNN ANCHOR: Yes, we are. And I'm Alex Marquardt in this morning for Boris Sanchez. You are in the CNN Newsroom.

And we are beginning with that race to rescue civilians from the battered steel plant in southeastern Ukraine in the city of Mariupol. We have learned that within the last half-hour there have been evacuations resuming today. Around 150 people were rescued from the city of Mariupol. It's unclear how many of those 150 were actually from the Azov steel plant itself where people have been sheltering for months. We're going to be having more details in a live report coming up from Ukraine in just a moment.

PAUL: That steel plant is the last stand for Ukrainian troops in Mariupol. President Volodymyr Zelenskyy says he's working on diplomatic efforts to save military forces that are still inside that complex. In the meantime, Ukrainian forces say Russia fired four cruise missiles at the key port city of Odessa today. No reports of casualties thus far.

MARQUARDT: And President Zelenskyy also accuses Russia of using blockades as a form of torture, he says, with starvation. He says that organizations are not being allowed to get into Mariupol to give people there the desperately needed food, water, and other supplies.

President Biden has announced more security aid for Ukraine, more weapons. He says the U.S. is providing $150 million worth of equipment, including artillery and radar for those Ukrainian forces.

PAUL: We want to go live with you now to Ukraine for more on that steel plant evacuation. CNN international correspondent Scott McLean is with us from Lviv. Scott, so good news we've heard now, the evacuations have resumed. But what more can you tell us?

SCOTT MCLEAN, CNN INTERNATIONAL CORRESPONDENT: Yes, so Christi, the news that we're getting is from the government of the Donetsk People's Republic, that is the breakaway region of Ukraine that declared its own independence and has now since swallowed up the Mariupol region minus that Azovstal steel plant. That government says that 152 people including 32 children were evacuated today between 8:00 in the morning and 4:00 in the afternoon, which is about an hour ago, and taken out of the city. That number includes 32 children that are now at a checkpoint, a Russian checkpoint in this village of Bezimenne which is east of the city.

What is not clear, though, and this is important, obviously, is whether that number includes people from the actual steel plant or if it includes only people from the wider city. It is easy to get those two numbers confused because of how they've gone about evacuating these people yesterday. We know that they were supposed to, the plan for today was to get the remaining people out of the steel plant, 50 were able to leave yesterday, including some children. And they were supposed to link up with people at an evacuation corridor, meeting point, elsewhere in the city, and then they were supposed to be taken east toward Russian territory, toward the so-called filtration centers or reception centers, whatever you want to call them, where their documents are checked, and they are questioned.

It is a bizarre move to take people east when surely most of these people will end up going west toward Ukrainian-held territory. But the deputy foreign minister of Ukraine says that this is all part of the strategy for the Russians, it's all part of their propaganda strategy to make it look as if these poor people from Mariupol are fleeing toward Russia after being the victims of Ukrainian militants.

[10:05:10]

This is the sort of narrative that the Russians want the people to know about. Now even if civilians are able to get out today, and again, we're still trying to clarify that, it still leaves a lot of soldiers, many of them, we're told, are wounded, trapped under that steel plant. The president says that he is working on all kinds of diplomatic options to make it happen. But so far, we don't have any information about whether that might actually work.

MARQUARDT: That's right, Scott. We have heard Ukrainian officials saying that thousands of residents in Mariupol have been forced to go into Russia rather than escaping into Ukraine where, as you say, they would probably prefer to go. Scott McLean in Lviv, thank you very much.

Here to share his thoughts on the latest in Russia's wan in Ukraine, retired U.S. Army Major Mike Lyons. Mike, thanks so much for being with us. I want to pick up where Scott left off just there. Even if all of the civilians who are in the Azovstal plant are able to get out safely, able to evacuate, you're still going to have hundreds of Ukrainian troops there in a facility that has been under attack by Russian forces for weeks. What is your sense of what may happen to those Ukrainian forces?

MAJOR MIKE LYONS, U.S. ARMY (RET): Good morning, Alex, and thanks for having me. They're going to continue to fight. They're in a location that's about six or seven stories deep into that steel factory, and they've got supplies and they've got equipment. They're not going to surrender. And perhaps the Ukraine government can come up with something in order to get them out. And if they're going to escape, they've got to go the other direction, the Sea of Azov. There's no way that they're going to surrender to Russian forces and, frankly, survive it.

So the tunnel system they have there is extensive. It would make the North Koreans and the Vietcong blush in terms of what their capabilities are. And we haven't seen the Russians have the gumption to go into that tunnel structure and try to get them out of there. So that fight could still happen for a very long time.

MARQUARDT: Yes, President Zelenskyy says negotiations are underway and that there are outside parties involved in those discussions.

We're also getting reports that the Russian forces are blowing up bridges in the northeastern part of the country in order to slow down this counteroffensive that the Ukrainians are undertaking to push them out, push them back towards the Russian border. When we see Russians blowing up bridges, does that tell us that those Russian forces are convinced, at least in these areas, that they will not be able to push forward again and are simply trying to slow down those Ukrainian troops who are coming after them?

LYONS: That's not a good sign from Russia's perspective. And they would blow the bridges behind them, let's say, from a straight military tactical perspective. But the Ukraine military is performing superbly in Kharkiv. On the counteroffensive, they've pushed Russian forces outside of artillery range, which is saving the city from indirect artillery and howitzer fire. And when they, again, when they blow those bridges up, they don't allow any way for the Ukraine military to advance.

So good for Ukraine military. As long as they're not doing that along the, say, more western or eastern, along the Dnipro River, that's where we have to be concerned about. If they started doing that, then they'd be more confident in their interdicting strikes to eventually go back on the offensive and take some of that ground back.

MARQUARDT: We've seen Ukrainian forces blowing up bridges to slow that Russian advance. Now it seems the tables have turned.

Let's talk about the intelligence sharing from the U.S. to Ukraine. The Biden administration is denying that it has provided intelligence that includes targeting information that has directly led to the killing of Russian generals, the sinking of that Black Sea flagship, the Moskva. Do you believe that there is a red line there that the intelligence community will not cross? Or is the Biden administration playing this down because they're afraid of Russian retaliation?

LYONS: Well, the administration does need to play it down. We are providing them tremendous intelligence, but that intelligence is then verified by drones and other things. And in fact, you heard Admiral Kirby say at the Pentagon press briefing that they're getting too much intelligence, and that could be just as much of a hindrance.

So I think they're getting things like where command centers are. It's more than just satellite shots. Command and control places have got antennas, they have heat signatures. And you've got Russian generals that have got to go there because of the Russian military performing so badly. Their operational security is awful. They get on their cell phones, and they get geolocated, and that's it. So they've been very dumb, Ukraine has been very smart. I think we've done just about enough with what the intelligence we're providing, and it is making a difference, no question. It's a good example of American indirect hard power.

MARQUARDT: And the U.S. has also been praiseworthy of the Ukrainian intelligence efforts themselves. Major Mike Lyons, we've got to leave it there. Thank you so much for your time and your expertise. LYONS: Thanks for having me.

MARQUARDT: Christi?

PAUL: So President Biden is touting the stronger than expected U.S. jobs report here in the U.S. while he visited a manufacturing facility in Ohio. That was yesterday.

[10:10:07]

He also addressed what's top of mind for so many of us, the skyrocketing prices due to the decades' high inflation.

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BIDEN: I know you're worried about the price of gas, food, and other necessities. And why it matters, if we make more things here in America -- well, it matters a great deal, because the pandemic and the economic crisis that we inherited and Putin's war in Ukraine have all shown the vulnerability when we become too reliant on things made overseas.

(END VIDEO CLIP)

PAUL: So we have a strong jobs report, rising interest rates, chronically high inflation, you saw it all produced a rollercoaster of a week on Wall Street. CNN Business correspondent Alison Kosik has more on the wild week and what could be coming next.

ALISON KOSIK, CNN CORRESPONDENT: Good morning, Christi and Alex. Great to see you.

Wow, a wild week of trading on Wall Street ending in a sea of red. It's a week that saw a swing to the upside where the Dow jumped more than 900 points, giving the index its best day of the year, only to make a stunning reversal 24 hours later, plunging more than 1,000 points to have its worst day of the year. The whiplash even shocking hardened traders and analysts, saying the action was not just volatile, it was violent.

The moves came after the Federal Reserve decided to raise the key interest rate a half a percent to fight inflation that's sitting at levels we haven't seen since the 1980s. Prices of everything from gasoline to food to cars have jumped in the wake of pandemic shutdowns, supply chain issues, and the ongoing war in Ukraine. And the Fed is right in the middle of a delicate dance to try get the economy back in alignment. It's trying to cool off a hot economy by raising interest rates without being too aggressive about it that it sends the economy into a recession.

Some believe economic growth is already showing signs of slowing. Case in point, last week we learned GDP unexpectedly contracted at a 1.4 percent annualized rate in the first three months of this year, though many do say the report was distorted by temporary factors and is actually masking the underlying strength in the economy like in the jobs sector. Friday's jobs report showed employers added 428,000 jobs in April. The jobs growth there is impressive considering there's a shortage of workers to fill positions.

But the jobs picture is a perfect example of why the Fed is concerned about parts of the economy that are overheating, adding to the inflation picture. On Wall Street, strong reports like that are piling on fear that the Fed will have to do more work, meaning more aggressive or higher rate hikes.

Alex and Christi, back to you.

PAUL: Alison, thank you.

Officials made a key discovery in the search for missing corrections official and inmate that is facing murder charges.

MARQUARDT: Yes, authorities have announced that they located the car. It's a ford SUV that they previously believed that Vicky White and Casey White, who are not related to each other, that that was the car that they were traveling in. The car had been in a Tennessee tow lot for about a week. And this location is about a two-hour drive north from where these two people disappeared from that county jail in Florence, Alabama.

CNN national correspondent Ryan Young is in Florence with the latest. Ryan, what are you learning?

RYAN YOUNG, CNN NATIONAL CORRESPONDENT: Yes, what a story when you think about the details to this. The fact that that car was found last week, and one of the things that we learned from the tow truck driver who towed that car himself, that car was found in the middle of the road. And once they arrived, they were able to pull it to the tow lot. What we believe is that car was completely empty, so all the supplies they may have had had gone along with them.

But at the same time, if you think about investigators wondering why that car was sitting there for so long. What we figured out is the tow truck driver was sitting home, was watching television, saw that Ford Edge that everyone was looking for and said, hey, I think I towed that car. He called the sheriff's department. They went down and checked the VIN number. And lo and behold, that was the car sitting there.

So you think about it, it's two hours away from this location. That does give marshals the chance to sort of go through that entire area to figure out if there are any more clues there. But take a listen to the sheriff who talks about the idea of how this could help their investigation moving forward.

(BEGIN VIDEO CLIP)

SHERIFF RICK SINGLETON, LAUDERDALE COUNTY, ALABAMA: One thing that I think they did not plan on is the extensive media coverage that this case has gotten. They can't stick their head out anywhere without somebody seeing them. So I think that's really going to cause some issues for them, and I think eventually they're going -- they're going to chance it, and somebody's going to see them, and we're going to get them.

(END VIDEO CLIP)

YOUNG: I've been covering this story for almost a week. When you think about the details that the sheriff's department and the Marshals Service put out, it really stands out.

[10:15:01]

You think about Casey White being six-foot, nine inches tall, close to 300 pounds. Also, when you think about Vicky White, she has a slight waddle. That's the way they put it, she has a waddling walk. So that's something that she probably can't change. They've also put out pictures about how they may have changed their appearance.

But the media attention and the attention in this community has been so intense, they believe that will help to continue to bring a lot of tips in. Hundreds of tips have come in so far. The Marshals Service and the sheriff's department continue hope that maybe more clues will come in over the weekend to help focus their gaze on some part of the country, because I can tell you, Florida, Kentucky, even as far away as California have called in tips in terms of this manhunt. And the interest in this story has gone as far as Australia with people calling in and asking about what's going on with the story.

So if you continue to follow it, you can understand why the intense manhunt increase and attention to it because of the idea that you had a woman who worked here for over 17 years who helped a man escape. So many people want to know why.

PAUL: Yes, no doubt. Ryan Young, Ryan, thank you so much. And you hit it on the head here, because you have to wonder how Vicky White goes from being, as she was described, an exemplary corrections officer, and now potentially on the run with an inmate charged with murder. What led her to take such a risk? What could be going through her head right now? I spoke with criminologist and behavioral analyst Casey Jordan about that this morning.

(BEGIN VIDEO CLIP)

CASEY JORDAN, CRIMINOLOGIST: No doubt she thinks she is in love with him and that they're going to be walking on the beach like in "Shawshank Redemption" down the line. So you've got to consider that she brings no value added to this man, who we've established is a violent criminal. Everyone who knows him talks about how dangerous that he is. And once he is out and has a car and has her money, maybe $100,000 in cash that she had with her, there is really no incentive for him to keep her alive because she creates a liability to him getting caught. So obviously we hope that she is recovered alive and that we get her side of the story. But as time goes on, I would argue that it's far less likely that she is alive unless there is some angle she has on him where he needs her more than she needs him.

(END VIDEO CLIP)

PAUL: By the way, U.S. Marshals Service says both Vicky White and Casey White, again, they are not related, but they should be considered armed and dangerous. Still to come this morning, security is something that is of great

concern at the Supreme Court right now. Protests expected over the potential to overturn Roe v. Wade. But the fight for abortion rights hits home for the daughter of Jane Roe. And she's with us next.

MARQUARDT: And then the death toll in Cuba has reached 25 after an explosion at a Havana hotel. We'll be having the latest as search and rescue efforts continue. We'll be right back.

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MARQUARDT: Law enforcement officials are preparing for the potential for violence here in Washington, D.C., and across the country after the leak of that Supreme Court draft opinion that would strike down Roe versus Wade.

PAUL: The 1973 rulings guaranteed constitutional protections for girls and women in the U.S. seeking an abortion for almost half-a-century. But protests erupted across the country this week after "Politico" published the draft opinion. CNN's Joe Johns is live in front of the Supreme Court. Joe, what are you seeing this morning?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, Christi, this is what we're seeing, 20, 25 people or so outside the United States Supreme Court, not the massive crowds that we were talking about last week. Of course, that's a reflection of the weather, and the forecast here is for rain throughout the day into the next several hours at the very least.

Nonetheless, we are expecting large demonstrations here in the Washington area over that ruling even though it's a draft ruling, if you will. And if you take a look at this, this shows you what the authorities are expecting. The non-scalable fencing around the United States Supreme Court, sort of a jarring image, if you think about it. Sign up says area closed by order of the Supreme Court. This is the same non-scalable fencing that we saw up around the United States Capitol, which is just across the street, after January 6th. We also saw a lot of it around the White House during the Trump administration.

So non-scalable fencing, concerns for security in light of this decision which, in some form, is expected by the end of the United States Supreme Court's term. We're also expecting demonstrations, frankly, around the country, and that's a real reflection that this decision as written suggests power will be handed down to the states to decide abortion matters. So you can expect demonstrations around the country. Back to you.

MARQUARDT: And Joe, Justice Thomas was one of the five in the majority on this draft that would overturn Roe versus Wade. And is he now claiming that the Supreme Court is being bullied?

JOHNS: Well, that's what he said. This was at the 11th judicial conference in Atlanta. He said institutions of government should not be bullied into giving what some see as a preferred outcome, clearly a reference to what has gone on here since the leak of that draft. Alex, back to you.

PAUL: All right, Joe Johns, good to see you this morning. Joe, thank you so much.

So if Roe versus Wade is overturned, it would be a historic change for women's reproductive rights in this country. Melissa Mills is with us now. She is the eldest daughter of Norma McCorvey, known in court documents as Jane Roe, the plaintiff in the Roe versus Wade case. Melissa, we appreciate you being here.

[10:25:02]

First and foremost, take us into the moment that you heard about this leaked draft decision.

MELISSA MILLS, DAUGHTER OF "ROE" IN ROE V. WADE: I was in shock. I was -- I couldn't believe it. I mean, this is going to take us back -- it could take us back 50 years. And a lot of unnecessary deaths and a lot of, for women that may not be able to have health care that they need to take care of their families and themselves. Yes, it's shocking to see that we could be set back like this.

PAUL: You say unnecessary deaths because you believe women will go try to get abortions in unsafe ways?

MILLS: They'll take matters into their own hands. They're going try to help themselves if they can't -- the people that can't travel to the places that they need to or get the help that they need to take care of what they need to. It's going to happen. It's happened forever, and that's why Roe helped us. It helped all women to take care of themselves and their families as they needed.

PAUL: So we have done a CNN poll, and it broke some things down into some specifics. And I want to ask you about there one -- 51 percent of people polled want their state to be a safe haven for women seeking abortion, even if there is a federal ban. There are states such as New York and California who are vowing to be those safe havens for women. Do you believe that the law should go back to the states?

MILLS: It's every woman's -- it should be every woman's choice to make those decisions for themselves. There shouldn't be anybody else telling them what to do and how to -- the trajectory of their lives. They should be able to make those choices. And it's not right for another human being or another person to make those choices for any woman. It should be that woman's choice.

PAUL: What conversation do you think you'd be having with your mother right now if she was here?

MILLS: She would be really -- I know she would be very upset because she's pro-woman. She wanted women's rights, women should have that voice for themselves, their families, what they need to take care of themselves, and nobody else should tell -- especially someone that hasn't been through that. They shouldn't tell another person how to -- how they should handle their lives, especially when it comes to this.

PAUL: Your mother is the reason that this law exists. Now, we know that decades later in 1998 she told the Associated Press that she was not 100 percent pro-life. But then before she died, she clarified and said that she had been paid to say that, and she still supported abortion rights for women. Do you think she ever had trepidation, that she vacillated back and forth about what this really meant for her, particularly considering the fact that had she had an abortion, your sister wouldn't be alive and with you today?

MILLS: Yes, ma'am. My mother had a very hard life, for one. She was just like most of the women out there in this situation. And there's a lot of people that are in this situation that -- it affects everybody. It doesn't matter even if those bad things have happened. Things happen. But I believe she would say she just wants things that are realistic. She doesn't want it to be abused, and that's where she saw a lot of bad things when she did work in the abortion clinics. She saw a lot of things mentally that were hard on her.

But yes, she would want women to have that choice, but within reason, just realistic -- realistic things for people and not extremes, like we're talking criminalizing a woman if she wants that to happen. If she doesn't top carry that child -- not every woman is a mother, not every woman wants to have children. And that should be that woman's choice. It shouldn't be anybody else's choice to do that. And that's all I believe she really wanted was women to have that choice, just like Roe says.

PAUL: Melissa Mills, we appreciate you taking time to talk with us this morning. Thank you.

MILLS: Thank you.

MARQUARDT: All right, and coming up, as prices at the grocery stores soar, so do the prices to grow the food to stock those shelves. How inflation is hitting farmers, that's coming up next.

(COMMERCIAL BREAK)

[10:34:01]

MARQUARDT: South Korean authorities are fiercely condemning North Korea for firing a suspected short-range ballistic missile. It was likely launched from a North Korean submarine into the waters off of the eastern coast of the Korean peninsula. This launch is coming just days after another ballistic missile was tested by North Korea, that was on Wednesday. And this one is the country's 14th missile launch this year alone, a sign that the dictator of North Korea, Kim Jong-un, is stepping up his ballistic missile and nuclear program.

PAUL: So we're learning this morning at least 25 people now are dead, dozens have been hospitalized after that explosion at a hotel in Cuba. Officials believe the blast was caused by a gas leak look at the Hotel Saratoga. Emergency crews have been sifting through massive amounts of rubble looking for any survivors and recovering any bodies that were found. Patrick Oppmann with CNN reported that overnight they did recover one person alive.

[10:35:00]

Cuban state TV reporting possible survivors trapped in the basement of the hotel specifically. Now, the workers say they'll continue searching until everyone is found.

This week the federal government announced it was taking unusual emergency steps to boost water levels at the country's second largest reservoir, Lake Powell, that's on the border of Arizona and Utah.

MARQUARDT: The government is saying that they will increase the waterflow from northern areas and reduce the output to the south of there. This comes as additional water use restrictions are about to go into effect for six million Americans out west. For more on that, Stephanie Elam reports.

(BEGIN VIDEO TAPE)

ADEL HAGEKHALIL, GENERAL MANAGER, METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA: We all walk through neighborhoods where lawns are so over irrigated that they're creating a small stream on the street. You just to eliminate that level of water waste.

STEPHANIE ELAM, CNN CORRESPONDENT: As the megadrought drags on in the west --

HAGEKHALIL: First time in our history, 100-year history, unprecedented.

ELAM: -- mandatory water restrictions are on the horizon for six million people.

HAGEKHALIL: You can't wait until the middle of the summer because it will be too late. I don't want anybody to turn on their faucet and not have water.

ELAM: The Metropolitan Water District of Southern California is asking residents to cut their water usage by 35 percent while also mandating that either water limits are put in place or outdoor watering be restricted to one day a week in parts of Los Angeles, Ventura, and San Bernardino Counties beginning June 1st. The impacted communities don't get their water from the Colorado River Basin but instead the state water project, which pipes water down from the northern Sierra-Nevada mountains and the Sacramento-San Joaquin Delta.

HAGEKHALIL: The state has cut the water that comes to us by two- thirds. And that's because there's no supply.

ELAM: Indeed, there isn't.

UNIDENTIFIED MALE: There's not very much snow here.

ELAM: Marking the end of the wet season, California, measured only four percent of the April average for its snowpack, basically a frozen reservoir that accumulates snow over the winter. The May measurement was no snow. As temperatures warm in the spring, that snow melts off, runs downstream, and ends up providing about 30 percent of the state's water needs, at least that is what should happen.

WADE CROWFOOT, SECRETARY, CALIFORNIA NATURAL RESOURCES: Climate change is accelerating in alarming ways, and faster than scientists predicted even 10 or 20 years ago. And that means we have to move very quickly.

ELAM: The drought is more broadly apparent at Lake Mead, the nation's largest reservoir, which supplies water to some 40 million people across seven states and Mexico. The water line has dropped so low in the lake that it's exposed a water intake valve in service since 1971. The Southern Nevada Water Authority activating a newer low lake pumping station to still be able to access water for its customers.

COLBY PELLEGRINO, DEPUTY GENERAL MANAGER OF RESOURCES, SOUTHERN NEVADA WATER AUTHORITY: Coming online is also a symbol of how serious the situation is on the Colorado River right now.

ELAM: While the cuts are frustrating to some --

UNIDENTIFIED MALE: To kill everything that we've got, it's ridiculous.

ELAM: -- officials say it's a matter of health and safety.

HAGEKHALIL: We need to right now conserve every drop, make sure it's only used for basic health services, our livelihood, our indoor usage, and not water our lawn.

(END VIDEO TAPE)

PAUL: Our thanks to Stephanie Elam there. We'll be right back.

(COMMERCIAL BREAK)

[10:42:48]

MARQUARDT: All across the U.S., prices for just about everything are going up. Inflation is showing up in grocery bills, gas bills, and countless other essentials. Between March 2021, and March of this year, prices for meats, poultry, and fish are up more than 13 percent, dairy products, seven percent. It costs you eight percent more to buy fresh fruit and vegetables, and more than nine percent to buy cereals and bakery products. Inflation is hitting food producers hard, too.

Despite these increases in prices for the consumer, net farm income is forecast to decrease by $5.4 billion. It's costing more to grow and harvest crops, and inflation is just one part of that. Supply chain issues, the war in Ukraine are both driving up the cost of fuel and fertilizer.

So to talk about all this now is Don Hartman. He runs a family business, Hartman Farms, in Deming, New Mexico. Thank you so much for joining us this morning.

DON HARTMAN, VICE PRESIDENT, LUNA COUNTY, NEW MEXICO FARM BUREAU: Thanks for having me. MARQUARDT: Don, when you look at your business overall, what's been

hit the hardest?

HARTMAN: Well, obviously the checkbook. We borrow massive amounts of money to operate with, and right now expenses are extremely high, and we're just trying to see how we can make it from day to day.

MARQUARDT: So as you try to navigate this and you make choices, what are those choices that you're having to make about what to grow, what not to grow?

HARTMAN: Well, we are kind of cutting back on vegetables because the inputs are so high. Right now, fertilizer is up almost 300 percent from what it was last year, and fuel has almost tripled, as well. And the labor situation is also pretty bleak. And so vegetables take a lot of hand labor and a lot of fertilizer and inputs. We're kind of moving away from some of those vegetables in favor of growing some of the other crops such as cotton and hay, and a little bit of grain.

[10:45:03]

And they don't require the massive amount of inputs that our vegetable crops do. And on the other side is that they are mechanically harvested. So that's some of the things that we're doing, cutting back on fertilizer and other things, trying to minimize trips to the field.

MARQUARDT: Have you had to think about a timeframe in case prices don't go down, how long you can sustain these high prices?

HARTMAN: We lost money last year, and if things don't turn around this year and we -- if we lose money this year, too, we may have to look at liquidating and going and doing something else, because this isn't working. You mentioned the food prices in the United States were up around 13 percent. Well, here at the farm, our prices are up, like I mentioned almost 300 percent. And that takes our profit margin to nothing real fast.

MARQUARDT: Who or what do you and your colleagues blame for this?

HARTMAN: I don't think it's my place to put blame. I'm a farmer, and so I want to take care of my farm and do what's best for me, and so all I can do is mitigate the problems, try to mitigate some of the things that come my way. And I just try to do the best I can. I can't control what's outside of might have realm. So I'm doing the best that I can to control what comes my way.

MARQUARDT: So what kind of help would you like to see to help you mitigate this?

HARTMAN: Well, I grow lots of fruits and vegetables, and then there's a lot of nut crops here, tree crops. And those aren't government subsidized like your grains and soybeans are that they grow in the Midwest, and even cotton. And we're kind of left out in the cold and we're left up to open markets. And then we have to contend with inputs from cheaper -- cheaper inputs from other countries, and so we have stiff competition from other countries. And I don't know what the problem is. I just want a fair shake. Maybe

that's what I need to say. I want a fair shake. I would -- it would be wonderful if Americans would just demand to buy American products and not cheaper inputs from other places.

MARQUARDT: Don, when you look back a year ago before these new issues popped up, could you just quickly tell us what were the problems that you were facing back then?

HARTMAN: Well, we always deal with weather. And there's always labor issues have really compounded since COVID. We can't get enough help to harvest the vegetable crops. We grow green Chile, we grow watermelons, we grow onions. And so when there's no help, no people to harvest those crops, they just basically sit and rot in the field. So we had a hard year last year because of COVID, and I don't foresee things getting better on that labor part this year.

MARQUARDT: Don Hartman, we wish you the best of luck. Thank you.

HARTMAN: Thank you for having me.

MARQUARDT: We'll be right back.

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[10:53:15]

MARQUARDT: It's time to pull out your oversized hats or those really small ones, put on something pastel. And it might be early, Christi, but I think we can forgive some people for taking a sip of a mint julep, because after all, it is Kentucky Derby day.

PAUL: Are you just trying to give yourself permission in a little bit, as soon as we walk off the set.

MARQUARDT: Exactly right.

PAUL: Andy Scholes got the pastel memo. Look at him looking all dapper for from Churchill Downs this morning. Andy?

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, Alex and Christi, always such a fun day. And the gates are open here at Churchill Downs. The fans have started filing in for the 148th running of the Kentucky Derby. And back to full capacity this year here. They're expecting around 150,000 fans to be here for today's race.

And I'll show you a look at the favorites as of right now. Some big money has coming in on Taiba moving him all the way to the co-favorite with Epicenter at five to one odds. This is only Taiba's third race of his career. No horse has won the derby in own its third race since 1883. Taiba used to be trained by hall of famer Bob Baffert, but he was suspended by Churchill Downs for two years after his horse Medina Spirit was disqualified, last year's winner, after testing positive for a banned substance.

Riding Taiba today is hall of famer Mike Smith. He's won two Kentucky Derbies before. If he's able to win today, he would become the oldest jockey to ever win the run for the roses. I caught up with Smith before today's big race and asked him what's the secret to his longevity.

(BEGIN VIDEO CLIP)

MIKE SMITH, 2018 TRIPLE CROWN WINNING JOCKEY: I've been working with trainers for about 30 years now. And at 56, it's paying off, man. It really is.

SCHOLES: At 56, do you appreciate these a little more than you did maybe in your earlier days?

SMITH: Without a doubt. Yes. You certainly look at them different. When you're young you think you're going to ride 10 more of these things. At least in your mind you can feel that way.

[10:55:03]

And at this stage of my career, I know that this could be the last one. I don't plan on it, I'm not that far. I'm not saying that I'm retiring.

(END VIDEO CLIP)

SCHOLES: Yes, and a popular pick today, the other favorite, Epicenter, he's won four of his six races. He's trained by hall of famer Steve Asmussen. Asmussen has had 23 horses in the Kentucky Derby and has never won. That's the most without winning in history, guys. Asmussen told us he's really hoping that this is finally going to be his year.

Post time for tonight's big race, 6:57 eastern. Alex, Christie, I think I'm going to go with Epicenter because I would love to see Asmussen finally get that win. You guys make a pick yet?

PAUL: No, I haven't, but I'll trust you. How's that? Andy, have so much fun. Thank you so much.

And thank you for watching. We hope you make good memories today.

MARQUARDT: There's much more ahead in the CNN Newsroom. Fredricka Whitfield is up next. Thanks for watching.

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