 Welcome to this month's edition of the Agricultural Market Situation Outlook presented by NDSU Extension Agri-Business. My name is Dave Ripplinger. I'm an Extension Economist with a group and the moderator of our monthly webinar. This month we have kind of a little bit of a shorter stack. Frayn isn't here today again, so we do have a video from him. Then Tim with Livestock Markets, Ron covering crop budgets. And I'll talk a little bit about E15 to close things up. If you do have any questions, feel free to use the Q&A tool or the chat tool if you prefer. We'll get to those at the end of the presentations. With that, I will try and turn it over to Frayn and if I have any difficulties, please let me know. Hi, I'm Frayn Olson, crop economist and marketing specialist with NDSU Extension. Unfortunately, I'm traveling again this week, so I won't be able to join you live, but I have prepared this recording to try and give you an idea of what I see coming out of the WASDE report or the World Agricultural Supply and Demand Estimates information that we got yesterday. So let me share my screen really quickly here and I'll get my PowerPoint up and running. So here's my contact information and if you do have any questions that you think about later that you'd like to try and visit with me about, I'd be happy to do that. I have my email address as well as my work cell phone number. That's probably the most reliable. Feel free to call or text if you have anything. So let's begin with the information about US ending stocks. So the March WASDE report or the World Agricultural Supply and Demand Estimates really weren't expected to see any major changes and shifts, but which is what we got. We, there were some minor adjustments here and there, nothing really significant to make it, have any major shock value, especially for old crop inventories or old crop pricing. So the row on top highlighted in blue or bolded in blue is the average trade estimate. So there's a survey done just before the WASDE comes out every month. This is the average of the trade estimates, what they were expecting USDA to report. We also have the highest trade estimate as well as lowest trade estimate to give you kind of an idea of the range of how much consistency or how much differences do we have in opinions at this stage of the game. The highlighted black line towards the bottom is the information we got last month. And of course, the very bottom row highlighted in red is what we got out of this report. So usually I like to compare what was the trading expecting to see versus what we actually got. So again, not major shifts or adjustments. Let's start with wheat. Actually USDA left all of the numbers for wheat, both the production and the consumption side identical to last month. So if you compare the February numbers with the March numbers, you'll see they're exactly the same. The average trade estimate was looking for a little bit higher inventory numbers. I think primarily because of the expectation we might see a slight cut in exports from the USDA. But that didn't really happen. They had basically the same numbers as we had last month. For corn, they were expecting a slight increase in ending stocks. And I do think a lot of that, the expectation was to see some change in the export numbers. But we got a little bit larger decrease in exports than first expected. So when you compare USDA's forecast last month versus the current forecast, there's about 75 million bushel cut in exports. And that has been a challenge for us. I've talked about that before. When we look at our export pace today relative to what we saw this time last year, we're pretty well behind what we were. And again, we haven't seen that picking up yet. I think we might see a little bit more export pace as we get towards the end of this marketing year. But again, we'll have to wait to see. On the soybean side, again, the average trade estimate was looking for a slight increase in ending stocks, which is what we got a little bit. Oh, excuse me, a slight increase. We actually got a slight decrease. I apologize. And most of that decrease was actually a combination of a slight decrease in crushing, but a larger than expected increase in exports. So crushing from last month to this month decreased a little bit. The exports were increased. So we had about a 15 million bushel increase in consumption, which then took the ending stocks down. And that was, I guess, if anything, a little bit of supportive news for the soybean market. Now, probably the bigger piece of information and the thing that people are more focused on right now is what's happening in South America. And first, let's look at the Brazilian numbers on the far right-hand side. We have a column for corn, a column for soybeans. Once again, the blue highlighted is what the trade was expecting to see out of the USDA. The highlighted black numbers towards the bottom is what we saw last month. And of course, the highlighted red is what we saw this month. So for both Brazilian corn and Brazilian soybean production, really the average trade guess was pretty much right on what we were seeing last month. They didn't expect any significant changes and we didn't get any. So right now the Brazilian crop is almost half, for soybeans is almost halfway harvested. Corn is split into two, a first crop and a second crop. So we're still trying to estimate both crops simultaneously right now. But really the weather coming out of most of Brazil is in pretty good shape. In fact, they have had some rains recently that have slowed the harvest progress for soybeans, which is raising some questions about how much second crop corn or that double crop corn will actually be planted. So again, we're watching that, but for this year's corn crop as well as soybeans, no real change. The bigger news has been what's happening in Argentina. For both corn and soybeans, obviously the soybeans have probably gotten a little bit more attention than the corn has. When you look at what the average trade estimate, the blue numbers versus the numbers we actually got, USDA did cut those numbers a bit more than what the trade is expecting. And when you compare what we saw last month, corn at 47 million metric ton and soybeans at 41 million metric ton, this cut down to about 40 million metric ton on corn and 33 million metric ton on soybeans was a much bigger adjustment than I think most of the traders were expecting. However, to put that in context, just like, as we get into drought conditions here in the US, USDA tends to be a bit slow to adjust their yield estimates down because what they're doing is they're making a yield estimate based on the information they have today with the assumption that the weather forecast will continue at normal. So we're gonna looking at normal weather from this point forward. And of course, a lot of the private NS are saying, well, if we're in a drought right now, like in the case of Argentina, they are in the basically the third year of continuous drought. The expectation for a lot of the private forecasters is that that drought conditions will continue. So there's a difference in expectations or kind of forecasting where USDA's thinking we're gonna have a typical average weather forward because that's what they're assuming in their forecasting versus a lot of the private guys are saying, well, we think that the drought will continue. In fact, yesterday, the Rosario grains exchange, which is kind of the major grain exchange in Argentina came out with their revised forecast for corn and soybean production out of Argentina. And their best estimate right now is that there was about 27 million metric ton of soybean. So USDA is at 33, the Rosario exchange is at 27. And for corn, the Rosario exchange is at 35 million metric ton with about 40 coming out of USDA. So there's a lot of these outside forecasters, both private as well as now in Argentina, they're actually looking at some very much smaller numbers than we've seen in quite a while. And so as these numbers keep changing, the markets are watching that very closely because that impacts obviously the ability of Argentina to be able to export both soybeans, soybean oil and soybean meal, because Argentina does export most of their soybeans as well as corn. Cause typically Argentina is the third largest corn exporter. So this has an impact on both corn and soybean and the export potentials we have here out of the United States. I would also like to touch just a little bit, make a few comments about 10 days ago or so, about two weeks ago almost now, the USDA had their outlook for them. And so this is kind of the first time that USDA puts forward some expectations or forecast for the new crop production. So notice the column in the far right hand side in red is for 2023-24. That's the crop that we'll be planting this next spring. The column in the blue is the current forecast that we got in March now for the old crop corn, 2022-23 marketing year. I'd just like to make a couple of comments cause I get some questions about this. Probably the thing that people were watching the most and marketing analysts were watching the most was what's the expectation for total production? And for corn, obviously total production, we're taking planted acreage, we subtract out some corn silage and then we look at what the trend line yield is. So right now USDA as well as a lot of private forecasting are fact forecasters are using a trend line yield as their baseline. So think of again the trend line yield that's an average yield, long-term historical average yield but we've adjusted for better farming practices, the science of agriculture is getting better. So look at this 181.5 and I've heard some comments that's like, well USDA is forecasting a record corn production next year or at least a record high corn yield next year. You know, that's true but again, you got to think about this trend line that our average yields are increasing every year a little bit. And so even though that looks like a pretty strong number, that is the mathematical average when you make these adjustments. So if you look at total production given about a two and a half million acre increase in corn plantings from last year into this year with this trend line yield, the idea is we're gonna have a production size or crop of corn crop about the same size as we had in 2021. And we drop down to the bottom line and we look at usage or potential consumption. Again, this is all mathematical forecasting at this point where the current thought is we'll have consumption levels that are a little bit lower than what we saw in 2021 which then would lead to slightly higher ending stocks. Now, ending stocks is a percent of use that's not extraordinarily high because our usage numbers are still pretty strong but it is at a higher level than we see today. And so again, the thought process right now kind of the mentality in the market is that we're really right now planning and looking for a larger crop in 2023 than we had in 2022 and actually something similar to what we had in 2021. For soybeans, they're basically saying flat we're not gonna see any increase in planted acreage. Now, there's a lot of private forecasters that are saying we might have like a million, maybe a million and a half acre increase in soybeans but based upon USDA's projections, we're gonna have about the same planting since last year. You plug in a trend line yield at about 52 bushels per acre and you get a total production number that's a little bit higher than what we saw in 2021. I mean, not dramatically higher but very, very similar, a little bit on the higher side. Well, total consumption, total consumption is gonna be nearly identical to what we saw in 2021. Again, very good, strong export pay, strong crushing demand. So the thought process right now again is we'll have a slight increase in inventories. Again, assuming that we have normal weather conditions. And then finally looking at wheat, not a big surprise in the wheat numbers. There's about a little over three and a half million acre increase in wheat plantings, total wheat plantings. Most of that we already knew about because of the winter wheat seedings report where a little over three million acres of that increases just from winter wheat only. When you back calculate that the implied number is that we'd increase spring wheat plantings about a hundred thousand acres or thereabouts. And so pretty close to what we saw last year for winter wheat seeding or for spring wheat seedings but with the increase in the winter wheat side. When we look at total production, again, if we can get a trend line yield, we've had a couple of years now in 21 and 22 where wheat yields have been hurt because of weather. If we return back to normal, we'll have a slight increase in the production numbers. Again, a bit higher than what we've seen over the last two years. When we looked at total consumption, USDA is forecasting a slight recovery in our export pace and again, domestic consumption being very stable. Well, increased production, consumption staying at about the same levels. We're looking at an increase in inventories. Again, rebuilding some of those inventories that we've been hopefully been able to take down over the last couple of years. So just to summarize the expectation for corn, soybeans and wheat is that we're gonna have a, if we can get good yields or average yields next year that we will have an increase in production that those will lead to a higher ending stocks that will likely try and take prices lower as we move into the summer months as long as we have a good production season. We really won't know more information until the March 31 perspective plantings report. Again, we'll have an update on that later on. So with that, I'm going to stop and stop sharing and come back and say, well, thank you for listening. Again, if you have any questions, please feel free to contact me and I'll be happy to try and answer anything you have. Thank you very much. Great, thanks, Frayn. And with that, we'll turn it over to Tim. Good afternoon, everybody. Tim Petrie here, extension livestock marketing economist. Again, like Frayn, my contact information is shown there. So feel free to get ahold of me if you want to. We're gonna talk just about cattle prices today and a lot of positive fundamental factors have been occurring the last several weeks or this entire year actually started last year and so I'm gonna mention some of those as we go along here and look at the charts starting off with fed stair prices. And I'll just kind of, I've mentioned this before, but since it's kind of a new year here, just show you the color coding. Usually I leave last two years on the chart and then go to the current one, but I did leave the four years back 2020 because the COVID year just to show how bad it was due to the pandemic and prices and then also how much we've recovered. So the red line is gonna be always on the top is what their prices are doing this year and then the blue line is last year, 2022, the purple line, 2021 and then the green line is 2020. So I'm not gonna go into history very much because we wanna know what's going on now and then what's into the future. Again, the blue line there and kind of in the center we had increasing prices throughout the year last year, about $20 higher than the previous year and so positive things in motion. A lot of things going on there. Prices went up in spite of record high beef production and so export demand was also record high and domestic demand was good and maybe better than we thought it was. So even though we had record large beef supplies we were able to increase prices there. So again, let's go to this year and the red line there and we started off about 20 bucks higher than last year again and have moved up nicely here in the last month. Exports have backed off a little bit from their very record high level last year but domestic demand is good. The beef cutout has been last week was up to 290 and that is even higher than last year. So that again means beef is moving, beef production is down because of last time I talked about the inventory report that come out the fourth straight year of cow liquidation that means we've got less cattle and gonna have less calves this year and less fed cattle. And so the lower supplies are positive. Beef production has been down so far this year about close to 5% that not only fewer cattle but the lower slaughter weights as well as packers have to get after cattle when we have fewer of them. So those are all positive things that are affecting the market. So where last week, this is on the five area market on a live basis was up to 165. That is as you see up there in the upper left-hand chart that's the highest prices have been since April 2015 on a weekly basis. And so the talk is that beef production has been a good, the USDA right now is predicting almost 6% lower beef production for the entire year. And that's coming from a couple of things. Yeah, we'll have fewer fed cattle and there have been a lot of heifers in the mix and we've got some better weather now. So it's assuming maybe that some of those heifers will be held for replacements instead of going into the feed lot. And then the other thing on beef production is again, we expect lower beef cow slaughter this year was at very, very historically high last year because of the severe drought. By the end of the, in November, 75% of our cow herd is in drought and we've seen a really nice improvement in a lot of places not right from Kansas and Nebraska and up here is still dry, but seen enough improvement where there might be interest in keeping heifers back and would keep them out of the chain. So anyway, looking ahead then, the red squares there are the futures market contracts that are trading for the rest of the year and then next year. And so again, it looks like we're gonna do close to $20 higher than last year and do a more seasonal trend. Usually, bed cattle prices go up into April and then back off into July when the big calf run are fed out for the calves from the previous year and then go back up at the end of the year. And the last couple of years they have not went down much in July because it just recovering from COVID and so on and getting restaurants back they've just kind of marched up and so. But anyway, really at historically high prices the average price for the year in 2014 for this chart here, there's five area fed cattle that was 153.84. And so again, that's the annual average we got up above that by the end of last year and this year, again, we're at 165. Now, USDA frame mentioned the WASDE report that just came out yesterday and the WASDE, USDA is predicting the annual fed cattle price now at 161.75. Those five futures contracts still trading if you look at the average of those this is yesterday's close and they did back off a little better where it looks like they're gonna buy the close here of 50 cents or so, but still pretty close with average 164. So the indications are that we will have a all time historic high on fed cattle prices this year if those futures hold and USDA's prediction holds and again, we're gonna have less beef production the export market's got a hold and domestic demand's got a hold. There are some question marks there and so we'll have to wait and see and then cyclically again, we expect higher prices in 2024 with fewer fed cattle to sell and up probably another $10 which would set another record there. And on a kind of interesting on a weekly basis the all time weekly high back and at the end of November in 2014 was 171.38 that was the highest weekly high and so the futures are saying maybe by the end of the year we will be this would be at the end of December their December futures would be close to that or for sure up there by 2024. So higher fed cattle prices are certainly positive for feeder cattle and particularly the more distant months whenever depending on what weight we're talking about when they will finish and be fed steers and so the feed lots look at that price and then what can they pay for feeder cattle? So again, these higher futures prices are supportive and go to the lighter weight calf races same color coding there. And again, last year the blue line there we had about a $30 throughout the year improvement over the previous year. Again, we had a smaller calf crop which was supportive and although corn prices were relatively high we had a nice rebound there. And then this year, several things coming into play here we've seen a really, really nice seasonal increase usually calf prices do go up kind of peak in April or May when there's that peak demand for grass calves and there aren't a lot of 550 to six weeks to sell we have more 758 and so on and then they usually kind of level out and then over there if you look up from the middle of October, October 15th is usually the seasonal low and we'll have higher prices this year but on a seasonal basis they very well could be lower in the middle of October than they are now if the seasonal pattern holds. But anyway, why the increase in calf prices one it's those fed cattle futures that I talked about that are higher and then on the other I didn't bring the drought monitor this time the drought monitor just came out today but we've seen a really nice improvement and in areas and for instance going south the summer grazing starts and so the Appalachian states that were very dry Kentucky and Tennessee have a lot of cattle about the same amount just a little less than North Dakota has and so they are completely drought-free Missouri, you know when we're moving up from the South and Missouri is drought-free Arkansas down in that area and the Eastern side of Kansas and even Oklahoma and Texas that were dry the Eastern side has gotten rain the Western side is still dry a lot of improvement up through the Eastern slope, you know Western Colorado and up into Montana it's through Wyoming is drought-free now and then another big one is California you've probably been seeing the news a lot of improvement in California from severe drought and all they actually have too much rain and so that's really the grass has really sparked the calf market and then the other thing of course it affects calf feeder cattle prices are corn prices and a friend didn't really show you the futures chart this time but corn prices have dropped in the last month about 60, 65 cents by today I guess and so remember the old adage change corn that sense change Peter cattle a buck in the opposite direction so corn going down and grass and so on and those higher fed cattle futures have been positive and then fewer numbers and have a probably about a million fewer calves this year than last year so all nice supportive prices and so we expect them to again continue on higher than last year but that doesn't say that they won't go they still will probably go down in the fall when the big runs hit but you know better calf prices to deal with go to the heavyweight yearlings kind of the same story here they were up $20 last year throughout the year and again seeing a nice spark here particularly in the last month and how much they're above last year for those reasons I just got through talking about corn going down in those fed cattle futures and so for the rest of the year those red squares then are what the futures market is indicating and just continual improvement and usually the seasonal high in these would be you know more kind of like in September and into that but the future just keep going up mainly based on those higher fed cattle futures and then that we've got fewer of them to sell and so there again are all time seasonal there are all time annual high here for these are North Dakota prices now the all time high was $208 in 2014 that would be the annual average and so you know we're starting we're below that now down there at a little over 195 but by the end of the year the futures are up there at you know 224, 225 and so again by the end of the year at least we will be at near record high prices but since we're starting off lower and started off you know at 175 and so there at the beginning year probably won't meet a annual average but again up there and then we're trading the gold then we're trading 2024 futures January and yesterday at right up there at 223, 24 so again it looks like better prices there but the fed cattle futures have to hold and you know a frame just mentioned and that's something we really need to watch here on feeder cattle is that March 31st Planning Intentions Report that is survey based and you know he mentioned that the USD's prediction for more corn anchors and all that at the outlook form but that was just their guess as he said with average yields and so on so planning intentions the acres report will come out and that could sway the market some way if there are fewer acres then what was he was showing there on the WASDE and then we'll have to watch corn and does it get planted and how many acres and so on would be the big thing we need to watch on feeder cattle but now again look positive here's last week's market report couple of things these are for the markets in North Dakota that USDA AMS reports and that's Napoleon, Mandan and Dickinson so just a couple of comments on there on the left are steer prices and on the right are heifer prices and so go to the left on steers for instance I just use this average price in my charts and so you know people tell me oh I got let's look at the 550 to six weight I get 250 for my calves or whatever and yeah we see a wide range here last week same weight and greater calves at those three markets they're in the same geographic area right down I 94 211 to 250 there but the average is 232 so that's what I use a couple of other things of course and maybe too late for this year but whatever the thin cattle are bringing really nice premiums but on the other hand the fleshy cattle are really being discounted because feedlots want to buy them you know thinner so they can put compensatory or the same thing on the lighter weight ones and so when you're back on the cattle you know corners is really even though it's went down 60 cents or more here in the last well corn is still relatively higher when you put it in the bin or so on so you know gotta be careful that we just don't feed them too much and get them a little bit fleshy because you take a discount on there and then you pay high feed cost well the same thing down on the 750 to 9s then for the 750 to 800 average 195 28 some selling better than that up to 205 and so on so again a good market and fewer to sell this year all falling into that going on the right hand side kind of the same story on heifers with the fleshy heifers and so on one comment I do want to make is you know there is optimism there and you see replacement heifers bringing premiums to their lesser quality or whatever our counterparts and up almost at steer prices we're selling last week we're selling replacement heifers at you know $1,400 to $1,500 ahead there and that's for heifers that we gotta keep till summer and read them and hope they get bread keep them a whole another year before we hope they have a calf and so there is optimism there our newsletter just put in a plug for that is supposed to come out I think today we just finished up it's a little late and I just talked to Brian and there my column in that this week is more on replacement heifers and what's our chance of herd rebuilding and so on so just keep that in mind go to call call prices again usually they do go after bottoming out there at the end of October November every year then they really usually do spark this time of the year and they're doing it again this year just up really nice again we've backed off some on beef cow slaughter last year is very, very high beef cow slaughter now with at least the Eastern state and California and so on getting some rain we backed off beef cow slaughter and hamburger selling very well as well so that's sparking the call call market again this average here is for these 85 to 90% lean cows these are thinner cow would be broken both cows that had a calf on them last year and are probably just eating hay this year and so again up in the upper right hand corner producers tell me hey I'm getting a lot more than what your charts so it's my cows yeah I agree we're selling $90 even well over $100 cows for the higher dressing and higher yielding cows and so on but this is just the USGA price that I get here for the Northern Plains and for the other ones the trend is the same going up and we expect that to continue this year too and depends on how much it rains and the more it rains the higher they're gonna go because the less cows there will be sold so with that I'm gonna quit and we'll turn it over to Ron Ron Hogan, extension farm management this is my contact information if you have any questions for me I'm gonna talk today about crop budgets we have released our crop budgets another headline kind of the same as last year NDSU projects profits the profits look good again this year even though we have a lot of high expenses the commodity prices are high to try offset that and so we do these budgets by crop and by region and just remembering all that these are just a guide every situation, every farmer situation is different but people wait and wait till we come up with these budgets because they wanna have something to compare to now remember now that the bottom line to these budgets are return to labor and management some of the crops that we do budgets on are a lot more riskier than others and we don't really take that into account in our projections and the return to labor and management from an economist point of view anything above zero is good but you've worked all year and you haven't paid yourself anything which happened some years and you should get paid for your management and a rule of thumb is you should at least get paid 15% for your management so that's the bottom line the way we calculate our budgets we break the state down into nine regions these are probably based on the soil I mean based on the yields and the field operations that are done in the area so there's nine different regions and we do up to 20 different crops in each region some of the regions have 20 crops so there's a lot of number crunching to do generalizations that I can make costs of course remain high most crops in all regions have profits like it was last year on a negative note the input costs are historically high historically high if you look way back now fertilizer prices have gone down some but they're still historically high and for this 2023 we are gonna be applying normal fertility levels normal application rates because the fertility levels are closer to normal so it's generally about the same cost per acre as a year ago our year ago projections a year ago we were coming off the 2021 drought and so the application rates we reduced them pesticide prices have increased for most a little bit but the big use chemicals liberty roundup that those prices have gone down so it's generally about the same cost on a per acre basis for your chemical costs now as we all know fuel is up in our budgets this year we researched and called around to various fuel suppliers and we came up with a price of 390 for a projection for the 2023 year seed prices are actually flat to down a little bit for small grains and soybeans and they're flat to up some for corn, sunflowers and canola and then the big thing that went up is interest rates a year ago at this time for our projections we were doing 4.5% for an operating loan right now the calculations that we did 7.5% that adds five or six or more dollars per acre in interest cost if you're borrowing all of your money to put your crop in we're assuming a six month borrowing period fertilizer of actually potassium was up a little bit and nitrogen and phosphorus were down prop insurance was up a little bit just because the losses we've had in North Dakota things are up most people take the enterprise units to try reduce their premium costs and of course with all this inflation we're having now we've got machinery costs going up quite a bit so that's reflected in these budgets and also in the same line so as repairs and then when farmers are making profit the landowners want to get some of that so we've got rents going up as well here's a typical budget the way we do our budgeting I just picked East Central North Dakota and you can see this is a soybean budget showing and we're using 12 and a quarter for our market price for soybeans the yield we use is a seven year Olympic average for the region and you can see there's the estimated market revenue this is the easy part and then after that then things are a little more guesses on what things are but we try our best here so we've got the seed in the herbicides and the fertilizer not much too much fertilizer on soybeans and you can argue about any of these numbers as I mentioned any of you producers have different methods and different rates and different ideas but this is our projection kind of an average for the region you can see here the overheads have gone up the depreciation and investment has gone up and the rents have gone up as well so at the bottom line is a return of $108 an acre which is pretty darn good and you can see this is how it breaks out the direct cost of $5, 562, 343 for indirect costs indirect costs or anything that you're gonna incur those costs whether you plant one acre or not okay you're gonna have those costs regardless if you plant anything and then the direct costs only are associated with when you do plant a crop the total cost $9.05 a bushel here in the East Central here's the crops that we projected we do have some negative crops oats, dried peas and flax maybe because we maybe picked a price that was a little low we try our best to pick that but those actually showed up negative it may not be negative for your own situation especially crops like mustard way up there and there's some really good contracts for mustard but it's a very risky crop and it probably can't be grown in a lot of places but and so that's why the especially crops usually show pretty well but just bear in mind that they are riskier but everything looks like a pretty fair profit in 2023 those were the dry land budgets as I mentioned here these are only a guide and make sure that it don't just go by those specialty crops that we have in our list of crops here is the website where you can get those budgets they're on the extension website and you can download them they also are available in hard copy in all of your county extension offices we also did some irrigation budgets and we broke the state down into three different regions I'm gonna talk about that just a little bit here I'm just showing an eastern region here this is an alfalfa budget alfalfa usually does pretty well under irrigation looking at a six ton and $120 price and this is an established alfalfa field here and you can see the various fertilizer and the irrigation repairs they are calculated by Tom Shear our egg engineer on staff and those are calculated by him so we incorporated those various costs on the direct and the indirect into our budget our bottom line shows $138 or $96 a ton to grow alfalfa in eastern North Dakota here are the crops that we looked at wheat, soybeans, barley, dry beans, silage, corn and then alfalfa seeding is the establishment year where you probably wouldn't make much the first year and then the alfalfa budget as I demonstrated dry beans look very good under irrigation wheat's never been really great to irrigate it shows a little negative there and here's where you can get those budgets there's our website and it would bring you right to it it's on our website just go and grab those we also have a tool called crop compare I know this is just for the dry land budgets for the nine regions and this is to kind of compare the direct costs of the various crops that we budget and here it just shows you a snapshot of what it looks like let's just say you picked soybeans and then you pick a price you probably wanna pick a futures price and then subtract the basis to get the price and then it compares soybeans let's say to all these other crops and comes up with a relative price so if you think you could return over variable cost or 225 per acre for soybeans you'd have to have $9 and eight cent wheat to do the same thing okay or canola you're gonna have to have 30 cents a 30.4 cents and so it just kind of compares things but one thing to remember then is that you're comparing crops just the direct costs and not the indirect costs and if you have a specialty crop that you need some specialized equipment you can probably include that increase your miscellaneous cost to kind of override what we have in there anything in the yellow there you can override our numbers and that's available on our website as well just remember that this is just a few tool for producers for changing scenarios until you finally decide on what to do here is the link where you can get that crop compare and with that I will turn it over to David and he's gonna talk about E85 and we'll take some questions at the end right, thanks Ron. Going here. Yeah, so I just have some really brief comments about what's being referred to now as Midwest ethanol E15 and so this is coming about in response to a petition by eight Midwestern governors who asked for a waiver from EPA allowing summer sales of 15% blends of ethanol somewhat surprisingly maybe EPA did come back and did agree with this they have proposed a rule that would allow that summer sale unfortunately it wouldn't begin until next year and that's led to a little bit of turmoil within the biofuels industry because they were anxiously anticipating this coming about there will be a hearing later this month to discuss it with regard to that rule you know it's important to note in the last few years we have had E15 available across much of the country if not all of the country last year the Biden administration had a emergency waiver due to fuel supplies which allowed it during the Trump administration they had changed the rules before they were overturned allowing sales of E15 this is essentially the next go around and kind of an interesting way to address the availability of ethanol especially in those states again in the Midwest who are predominantly the producers I just wanted to talk about a couple of things and I bring this up pretty regularly for folks to realize that we really don't use ethanol as a fuel in this country we use that as a fuel additive you know ethanol is used in gasoline almost all of the time for its octane not its energy content and that's really important because when priced against other octane alternatives it's very low cost and at the same time we do see this across most of the United States almost all the gasoline sold is E10 here's just a quick little chart happens to be from RFA the Renewable Fuels Association that shows the different octane ratings of these sources again you can see ethanol kind of to the far right there with an octane rating of 114 and the idea is and what we saw about a decade ago is this transition to gasoline blend stock drop into 84 octane and then in any given market you could blend with any all some of the for a consumer again that blend stock would be available to those blenders and those additives whatever they might be combined prior to taking it to the retail station and again you can just look at that well you can see that ethanol is much higher but of course it's you know you're looking at this in terms of price and so here's a chart from US grains and they have a consultant who puts this out pretty regularly and this is a chart over time of the price per gallon of ethanol and BTX which is those other common additives so benzene, tulene, xylene and you can see for most of it that orange line is lower than the blue line and in most cases by about a dollar a gallon so if you think for a dollar less you're getting much more octane you know the obvious economic choice is to use ethanol as your fuel additive and again this is not necessarily when people think you know people oftentimes think that you know ethanol still gets a tax subsidy that you have to use it and that's really not the case and in most cases the biggest driver of ethanol use is that it's relative affordability as a fuel additive of course when you go to E15 things change a little bit this chart is just about MTBE that was the dominant source of octane prior to the RFS just before ethanol took off with the RFS MTBE was having a lot of issues in states with contaminated facilities essentially leaking from gas stations tanks wherever they might be and so ethanol provided a nice solution to that but MTBE is allowed in many states still but you can see for most of this time series that ethanol again is less expensive than that octane source. Finally we can talk about ethanol as fuel that's where it gets a little bit interesting again as a consumer you typically be looking at that relative price per unit of energy and again ethanol as we all know has less energy than gasoline on a volume basis about two-thirds amount of energy but there are times where it might be priced as such where it is a lower cost fuel. As that kind of comes along too and we look at issues like E15 actually had the chance last week to visit with a group of importers from across Latin America and they had a lot of questions because they don't use ethanol in many Latin American countries and obviously Brazil is a major exception to that but they had a lot of the same questions that the US did over the last 20 years in terms of how do you actually get ethanol to market? How does it work with all different parts of the system? So they brought up things that we've been through including what's gonna damage your vehicle and unless you have a very, very old vehicle the gaskets and fittings are fine. A lot of automobile manufacturers have not included E15 in their warranties until recently and some still don't which is somewhat important to note I don't think the risks are great but again, that is something to always check. One of the things that definitely comes up for consumers too is fuel efficiency especially now with a tight economy what are you actually getting in exchange for your dollar? How much further down the road can your vehicle move? What can it haul or tow? Is it important consideration? The one thing we don't think about and which is critically important and it's kind of the driver of this is emissions and so EPA is charged with overseeing the emissions, the air emissions associated with fuel use and so they did years ago do a lot of studies and then basically made a decision, a rule that any vehicle after 2001 could use E15. Now it's important to know what this means. It means that the emissions from those engines meet the standards that they have for emissions not that a given auto manufacturers want to warranty it or that there might not be other issues. And it's also the same thing too with the read vapor pressure a thing that most folks don't worry about. It's a major concern in the summer having that read vapor pressure level at a certain point does impact how much emissions are released from a vehicle? Again, something we don't typically think about but it's something that's really important something under the purview of EPA. That's what I had for just some quick comments about this new Midwest E15, which we might see this summer we'll probably see next summer. I think you probably also see a lawsuit in the coming months depending on how fast things go but that concludes our prepared remarks. We do have time for questions if you'd like to use the chat or the Q and A tool we'd be happy to field those. Of course, we all shared our contact information you can reach out to us at any time. Right now I don't see any questions or chat but I'll definitely give the audience a minute to think of any that they might have. And then of course, if Ron or Tim if you have anything you wanna add as we have a little bit of time you're definitely welcome to do so as well. Yeah, I'll just kind of follow up and Ron and he kind of mentioned it to me but make sure you know on those budgets there are spreadsheets and so you can put your own numbers in that's right isn't it Ron? Yeah, I guess I failed to mention that. You can get a hard copy and then there's also on our website we have an Excel files for each of the regions and then you can pick your crop and then you can override any of our numbers that we have in there. And we do have one question which I'm gonna say is for refrain is there any update on Mexico and the non GMO corn issue for the next year? I'm gonna leave that, I don't know if Ron or Tim if you have information on that obviously it's been a point of contention recently between our countries. They are a major market for a number of agricultural goods and this GMO issue is a pretty tough sticking point but I don't have any updates on that. Yeah, and you can definitely email frame that might be the best way you gotta hold them it's still the winter meeting season and so he's out and about instead of playing phone tag and email could certainly work. Yeah, there are discussions going on daily with Mexico and I don't follow either but frame does but we're threatening some trade agreement issues and so on and meetings are going on all the time so frame is up on that. Well, if there are no more questions I wanna thank all of you for joining us today and the other two presenters and for frame for taking part in today's webinar. Again, we will be back in a month happens to be on Thursday the, excuse me, Thursday the 13th in April so hopefully by then all of the snow has passed and we have flowers growing but maybe not but with that I wanna thank everybody hope you have a great day, bye.