 I'd like to welcome everyone to this month's webinar, the NDSU Extension Agri-Business Agricultural Market Situation Outlook webinar series. My name's Dave Ripplinger, Economic Specialist with NDSU Extension and the moderator of the event most months. We have kind of a standard docket, so a series of presentations. Brian Parman does have to leave, so if you have questions for him, you're welcome to ask before he does, or to follow up later. But if you have other questions, if you could save those towards the end, you can ask using the Q&A tool or the chat tool at any time you'd like. But with that, I'll go ahead and hand it over to Brian. All right, thanks, Dave. I'm gonna get my screen sharing going, so I don't forget like I always seem to do. So I wanna talk real quick about machinery and the equipment situation and tell you everything I know which shouldn't take long because I don't know a lot. And a lot of this information is kind of challenging to go by. And I know I talk quite often about the macro economy, interest rates, production costs and things like that. Recently, not a whole lot's changed between the last talk I gave on here plus our ag lenders conference there hasn't been any real new developments. So I just wanna hit real quickly on the equipment and machinery situation as it stands right now and a little bit of an outlook on that. So if you look here, here's the St. Louis Fed and when I'm talking about producer price index this is more of an upstream metric for what equipment prices are doing. This isn't at the retail level. This is upstream of that but it is a good indicator for if prices are increasing by and how much because typically if things are increasing upstream it's gonna come downstream and hit the consumer but by and large new equipment prices have really been kind of moving sideways. I mean, ever since the beginning of about 2023 toward the tail end of 2022 and into 2023 you can see that the price index for new equipment, new farm equipment has basically just been trending sideways. And the same thing for the most part for parts. This would be replacement parts sold separately obviously but original replacement parts those two have been moving sideways after that 2021 run up that we saw all the way into late last fall. Again, just moving along at a pretty modest increase overall. So digging into details there's some surveys that are out and a lot of that information is either copyrighted or proprietary so I can't take charts from it or anything like that and put them up here but the dealers according to a lot of the surveys not as optimistic about their revenues on new equipment in 2024 as they were a year ago heading into 2023. And basically according to some of the surveys that went out this once it was compiled 48% of dealers expect declining revenues from 23 into next year and about 33% expected to decline with 31% expecting or 33, yeah, decline 31% of dealers expected growth and revenues from 23 to 24. And then about 21% of dealers expect no change. So you got essentially 48% expecting a decline in revenues, 31% expecting growth. So you would take this combined the vast majority almost 70% expecting either decline or no growth at all which is a change from last year when there was more growth expected in the new equipment market. What that kind of says there in a nutshell is dealers aren't optimistic they're gonna be moving a lot of these products and if that's the case then you're probably not gonna see a lot of upward pressure moving forward on those new equipment prices. Now they're not gonna decline, they never do but you probably won't see a big increase or it's not expected into the next year especially not due to some high demand. Now used equipment prices dealers are a bit more optimistic on those. And I'm gonna show a slide here in a minute that kind of talks about the softening of used equipment prices. So I thought, well, if they're thinking prices are gonna go down, why might there be more optimistic on revenues? And then of course, obviously if used equipment prices are falling then it may be easier to move them and maybe they make a little bit less in a percentage of the sale but they're able to make more sales if there is a softening market on that. So they're probably, the optimism's probably coming off of being able to make up for it in volume. So additional revenues for these dealers in volume of used equipment moving and not necessarily as much on the increase in prices but I guess that kind of remains to be seen where that's heading. So used equipment inventories and this is from a separate source to Sandhills Global who puts out these reports periodically on what farm equipment's doing and they're out of Nebraska that they used and this just came out recently used a over 300 horsepower tractor inventories are almost double what they were a year ago on the used equipment market. And then the other thing that's going on is the spread between asking prices. So people who have an ask whether they're selling privately or asking prices by the seller that spread is growing between what's there actually being sold for which indicates a downward pressure then on the actual equipment that's sold versus asking price. So you've got a sellers right now who kind of were looking at last year's numbers and expecting at least to hold on used equipment prices or even an increase and that's just not what buyers are willing to pay right now. Those auction prices are actually declining. So there is a definite softening that's occurred especially on the large tractors and large equipment. And some dealers are reporting slow inventory movement and it's been suggested that to move some of these higher priced items they're even going to have to potentially offer some sort of financing deals. That's what's been suggested in order to move some of this indicating that the demand there for that used equipment just isn't overly strong or at least not at the prices being offered. And then smaller equipment inventories are following a similar trend auction values for a hundred horsepower essentially to 300. They're up less than 1% compared to a year ago and inventories on that are up 36, 37% right now. Again, showing those used inventories are increasing which would lead you to believe that then you're going to see a softening in the overall price as inventories move dealers are going to want to drop the prices to go ahead and move that stuff out the door. And then probably you're going to see less being offered on trade-in values on any used equipment coming on to the dealers lots compact tractors the same thing. And then combine auction values have also been driving values lower. Combine auction values on combines have been driving lower this fall as well at least regionally according to the data set which is then driving overall farm equipment values down to on average. And so that's kind of the situation as it stands right now is that we're essentially seeing a hold even on new equipment prices so far this year as we're getting toward the end of 2023. And there are definitely some soft softer indicators or data that's suggesting a softening in the used equipment market considerably. And it'll remain to be seen how far that goes as things settle as that gap in auction values versus what's being asked continues to grow something has to give and the longer it stays and persists the more likely it is that the sellers are going to have to wind up accepting lower prices or lower values for those trades or used equipment moving forward. So with that, like I said, information on used equipment and new equipment is often tough to come by mostly on the newer equipment side essentially you got to trade or listen to auction values and kind of look at it sort of an autopsy at the end. But as I said, Dave said, I have to jump off I can't stay on till the end. So if there's any questions real quick I'll try to answer it. Otherwise, you can email me brian.parman at ndsu.edu or just Google me there. So if there's any questions, our next speaker will be Frane, Dr. Olson. And I'll just wait for a second to see if anyone has a question to ask. Yeah, we'll give you just a minute here if you need to. Yeah, just a few minutes in case somebody wants to post something in the chat or just go ahead and ask on the Q and A either way. But again, like I said, it's getting a gauge on the used equipment market is tough. And because you can have auctions where you wind up seeing some stuff sell for higher prices and then a couple of weeks later you see much lower prices sold. So then you ask our prices increasing or are they decreasing? And the truth is we don't know you need to get enough data and enough of these auctions because I'm sure I can probably find somebody listening now who heard about an auction where stuff was selling way above what people thought it would and then I'll get another comment. Well, they were having a hard time moving it. Some of them didn't even meet reserve prices or anything like that. So that's why it's a really tough area of production cost to track for us or anyone else who's looking at these things. Well, I don't see any questions coming in yet, Brian. So it's okay with everybody. I will share my screen and thank you very much. You got it. Have a good one. Good afternoon. My name is Fray Nolson. I'm the crop economist, marketing specialist with NDSU Extension. Here's my contact information. So if there is some questions or things you want to talk about or visit about later on I'd be happy to do that. So I'm gonna go through a bit of an overview of the information we got earlier today from the November WASDE, the World Agricultural Supply Demand Estimates as well as an update on the production report. So before I get my, there we go. So a few key thing, market issues that I just want to visit about. First off, and we'll go through this in more detail. The WASDE reports or USD reports came out negative for soybeans, corn and wheat. I wouldn't call them dramatically negative, but they definitely put kind of a negative tone back into the marketplace. A couple of things to point out. I did mention this last month and I wanted to give you some specific numbers. The US corn exports are off to a pretty good start this year, relative to the last year. But soybean wheat export pace is much slower. So the numbers that you see in the little table below actually came out this morning. So these are export sales as of 11-2. So about a week ago, it takes a while to compile everything and put out the reports. So these would be sales, these are actual from the beginning of the marketing year. So this would be for the delivery and marketing year 2023. So starting on September 1, running through this date of first couple of days here in November. So if we look at the far right-hand column, that's the accumulated sales for this marketing year relative to last marketing year. So the first row is for corn and as you can see the corn exports, the export sales, I want to be very careful. Now this is export sales, these are not actual deliveries yet. Our head of last year's pace. Soybeans are behind and last year was an okay soybean year for exports, but our pace is much slower this year. We've got kind of a slow start, kind of a late start, mainly because the Brazilian crop was very, very large this last year. So they had more soybeans to be able to export at a cheaper price. And so not only China, but also other major buyers are buying from Brazil. And that now is starting to taper off. There was an additional announcement this morning of about a little over a million metric ton sale of US soybeans to China. Now those numbers are not reflected in the numbers you see right here, but China is coming in for the last week or so has had some really good export purchases from the United States. So it is starting to pick up. The question of course is how long will that pace last? The next row below that would be for all wheat. And this is all wheat classes blended together. Last year was not a good export season for the US wheat industry. This year we're off to a little slower start than we were last year. Now on a sidebar, I do want to point out the very bottom row is for spring wheat only. Notice that the spring wheat export pace is a little bit ahead of where we were this time last year, which is kind of comforting, but yet wheat prices are still kind of in adult rooms right now. They're having a really hard time. So US wheat, even though there's tightening supplies in the global wheat market, that really hasn't translated into US export sales. I am going to talk a bit more towards the end of this my session talking about the Brazilian production, where are we sitting with soil moisture and weather, et cetera. But I do want to just remind everybody that the forecast for Brazilian, soaring soybean and corn are very strong, in particular for soybeans. So if we look at from Conab, which is the kind of the Brazilian version of USDA, they do things a little differently in Brazil, but it'd be similar to their version of USDA. They're looking at increased plantings by about two to 3%, about 11.2 million acres, 45.3 million hectares. Just as a reference point, the United States last year, this 2023 production season, the one that we're harvesting right now, we planted about 83 million acres in the US. So their planted area is much, much larger than ours. Their average yields, trend line yields are very similar to the United States. So they got a really big production engine for soybeans. Now if you do the math on that and calculate everything out, based on Conab's estimates, the soybean production, how many tons or bushels of soybeans are the Brazilians going to produce is at 162 million tons. Now that is well above last year's record of 154, 155 million metric tons. So put that in perspective this year, given the updated information we got today, the US has forecasted produce about 112 million metric tons. So again, when we think about the size of the production capacity coming out of Brazil, in particular for soybeans, they're looking at an additional record crop well above what they had this last year, assuming now that the weather holds up, which we're going to talk about in a minute. In contrast, they are looking at the current forecast as a slight reduction in corn production. Again, this would be tons produced, about 119, almost 120 million metric tons. This upcoming year, the crop that they're going to be planting now in a few months, versus last year at about 132 million metric tons. And again, now put this in perspective, the United States produces about 386, 387 million metric tons. So we're a much larger producer of corn than Brazil, but Brazil actually has forecast to have a stronger export season. So they're actually going to export more corn than the United States in the upcoming year, based on the USDA estimates currently. So they don't produce as much, but they don't use as much domestically either. And then finally, as another kind of reference point, Stonex, which is one of the large international forecasting firms, their best guess right now for Brazilian soybean production is 165 million metric ton, which again is towards the high end of the range of private estimates. But I'm just trying to give you a feel that if everything goes well in Brazil, and that's a big if, they could produce an exceptionally large crop one more time over and above what they had this last year, which of course is going to put some downward pressure on soybean prices longer term. Now short term, that's not the case. We still have a lot of growing season left. So let's dive into the reports we got today. So let's talk first with the production estimates. We did an update for both US corn and US soybean production numbers, not only yield per acre, but also then total bushels produced. As usual, the blue line on top is what the average trade estimate was. So these are the numbers that the traders and market analysts were expecting to see. Towards the bottom, the highlighted black line is the numbers we had from last month. And the numbers in the red at the very bottom is when we got the numbers we got a couple hours ago. So the key differences, obviously, the corn yield estimate went up. Most trade analysts were looking at something very similar to what we saw in October. USDA did increase corn yields and that was pretty much across the board. There was not only the corn belt states of Iowa, Illinois and Indiana, but they also increased North Dakota, Minnesota and even parts of Nebraska corn yields. So they just took kind of the whole corn complex and moved it up just a smidge. Now I'm not sure exactly what caused that. It could be a better estimate for test weights. Of course, we'll have to wait to see once the final numbers come out. For soybeans, the soybean numbers, the US, the private analysts were looking for basically flat or whole even. We did get a slight uptick in yield per acre for soybeans, but very small, relatively small. So if you translate again, higher yields times the same harvested acreage, we end up with slightly increased production. So what does that mean for our bottom line? Cause obviously if you have higher production, there is some partial offset when it comes to consumption. Again, blue line on top is what the trade was expecting. The black line that's highlighted is what we got last month and the red line on the bottom is what we got a couple hours ago. So let's compare the blue line and the red line. For wheat, all wheat, the number went up and that was actually a little bit of a surprise. I think most of the private analysts were expecting kind of a whole even. The only major change there was some minor adjustments or small adjustments in the imports of wheat. And when I looked at it by class, there was a slight increase in projected imports for both hard red spring wheat as well as hard red winter wheat. There was a reduction in Durham and a slight increase in soft red winter wheat. So by the time you balance all those things out, the increase in the bottom line is really directly from an increase in the projections for wheat imports into the United States. And some of that is a logistical issue. I really don't have time to go into it right now, but if you do have some questions, I'd be happy to try and answer those later. On the corn side, of course, that was probably the biggest change or adjustment we saw was in the corn numbers. Because of the higher yields, we did increase the production, but then to partially compensate for that, they increased, USDA did increase the consumption or the usage for all the major categories. So the feed number went up, the exports number went up and the ethanol number went up. So there's some partial offset there between increased production and potential increased consumption. Obviously the net was also an increase in our bottom line. For soybeans, kind of the same thing. There was an increase in production numbers, but USDA did not make any adjustments in the consumption estimates. So that increase, the change from last month to this month was all due to because of the increased yield forecasts. So I wanna provide a little bit of an update on a couple items that we talked about last month just to give you an idea. One of the things I did mention very quickly was that the Mississippi River levels, in particular towards the southern part or toward the lower Mississippi, have been very, very low. That was limiting barge traffic, increasing barge costs, the cost of barge shipping grain by barge as well as the volume shipment. This is the water levels at Memphis, Tennessee last month. So this is what I showed you last month and this is this month's numbers. So let me flip back, this is last month and that brownish area is what they call the low stage. So like in North Dakota, when we talk about flood stages as things go on the high side, they also have a low stage where below that level, the barge shipping is hindered or hampered. So last month, they were anywhere from 10 to 11 feet below that low stage. We did get back up to kind of that net minus five feet that still allows full navigation but the forecast is for that to come back down again. So that some of that surge or rebound in river levels because of some rain that hit the Ohio River Valley and the central Mississippi basin. So this is still an ongoing issue. You'll likely hear some more comments or issues, talk about it as we move forward into the rest of this marketing year. Just to let you know and to kind of explain what's going on, the black line right there is a three-year average of grain shipments. We're measuring that through the LOC 27 which is Granite City, Illinois. Kind of use that as a reference point for the movement of grain from the corn belt into the Louisiana Gulf. So the black line is the three-year average and then the bars represent weekly information on shipments this year and they have it broken down by the type of grain. So the gold is soybeans, the blue is corn. You can see that we do have this strong seasonal pattern of when we see barge movements. We did see kind of a higher level coming into last week. That is now backed off a little bit for this week. This is actually information that we again got this morning. So we do need to be paying attention to the barge shipping because that might impact where some of these grains are delivered, whether it goes to Louisiana Gulf or whether it goes to the PNW out of the West Coast which really has more of a draw from this region. So now let's talk about weather and kind of will Brazil and Argentina have the capacity to be able to make these large crops that they're actually talking about. So this is a map of soil percent soil moisture. So notice the scaling on the bottom. So this would be percent soil moisture. At what levels are we at right now relative to a 20-year average? And I tried to draw in with this black line kind of the major growing region. So the major growing region would be the South and West of this line. So here's Montegrosso right in the middle. You can see that the soil moisture levels in the in the Northern and in central part of Brazil are in the very dry side. Last year they were had a fantastic year. Part of the reason was because they had very good rainfall and very good soil moisture. It was the Southern part that had the drought areas and that kind of took the top end off of their production. Well, this year it's exactly flipped. So if we look at Southern Brazil, they're in a much better shape for soil moisture conditions. They're almost to the point of being excessive from a soil moisture standpoint or the water holding capacity of the soil. But when we get into these core growing regions for in particular soybeans, but also for corn, the first crop corn, excuse me, second crop corn, a bit on the dry side. When we look at temperatures, and this is the average temperature last week. So please notice the dates on the very bottom. These are in degrees of Celsius. So I converted Celsius into Fahrenheit to give you a better idea of kind of the ranges. As you can see in Montegrosso, most of that was between 30 and 35 degrees Celsius, which is anywhere from about the mid 90s. That's about 90-ish degrees in Fahrenheit. So very warm, they're coming off of their summer. They're excuse me, coming off of their winter, moving into the summer months now. And this is where most of the planting progress has been occurring is in Montegrosso, Montegrosso, Montegrosso to soil. Goyos has been very rapid planting progress and a little bit slower as you move further south. So very warm conditions for this time of year. It's in the spring of the year for them. It's in the fall for us. When we look at rainfall, now this is the forecast moving forward. The one before was looking backwards at what have the temperatures been at. This is the forecast moving forward for precipitation. So this would be for the upcoming week. So the next seven days. And again, notice most of the central, the northern and central growing regions, you know, some light showers, some sporadic showers coming through. I've also converted from millimeters of rainfall into inches of rainfall to give you an idea. So 45 millimeters is about a little over an inch and a half, 1.75 inches. So the southern region, which already has quite a bit of good soil moisture, has been recharged pretty well. It is also expected to see some additional rainfall. So again, when we think about weather in Brazil, it's a very large country. We have to make sure that we're listening very carefully when we talk about what areas are dry and what areas are wet. Moving into Argentina. Argentina, what I've tried to do again is circle the two major corn and soybean growing regions in Argentina. Now last year, Argentina had a severe drought. In fact, that was the third consecutive year of drought conditions. So coming into their spring's work now, they still have the holdover from now that they're very, very dry conditions. And I'll show you in just a minute, there really isn't for the next week or so any expectation that we're gonna see additional rainfall to help out. And that's impacting the wheat production because they have some winter wheat that's being, that's now starting to head and develop, but it also have potentially an impact on their seeding for corn and soybeans. So these are the two major regions and I wanna use this kind of little big bump out right here as the reference point for location. So this is the core growing region for both corn and soybeans. Notice that the drier soil conditions that they have, again, not quite as bad as parts of Brazil, but still very, very dry in that region. We get into temperatures much more moderate because they're further south, they're further away from the equator, they're a little bit cooler. So most of their day-to-day time temperatures have been in the 60s or the 70s. Again, very moderate. They are starting to make some of their planting progress, but it's a little bit slower than what they see in Brazil. Looking at rainfall, again, here's the tip of Southern Brazil, that was that blue blob that we saw before in the Brazilian area. So you look at these major growing regions of Argentina. They are expected to get some rainfall, some rain showers that, yes, it may slow up planting progress a little bit, but if it's very, very dry conditions, that additional rainfall should at least boost people's, hopefully they're kind of the farmer's attitudes and look a little bit more positively in what the outlook might be as we move through the summer months. So a lot can happen yet. We're just in the planting progress. I noted in one of my previous slides that right now Brazil is not quite 50% planted, just under 50% of their soybeans have been planted versus last year at this time at about 57%. So last year was a very rapid planting progress. This year is actually a bit more normal, bit more typical. So the soybean crop in Brazil is about halfway planted. Again, very early in the crop development, we're gonna have to wait to see and watch the weather conditions very closely. So with that, I will stop sharing my screen just to provide an update. I'll try and answer the questions at the end of the session. So now I'll hand things over to Tim Petrie. Good afternoon, everybody. Tim Petrie, hand issue extension, livestock marketing economist. Today, I'm just gonna go, well, I'll go to this for the second slide and this is where we left off the last slide, last month, which was the 12th of October. And I was just talking about what was available for LRP coverage for backgrounded cattle into March. And you see up there that we could get 253 and at a 626 premium hindsight now says, wow, that would have been a really, really great thing to do because the future is closed today at 227, I guess. So anyway, and if you go, but my talk really was, if you didn't wanna pay that high premium, you could come down and get a lower premium, like here's the budget that was on our website back then and it has been updated now. We've lowered all the prices where they went and actually corn has went down. And so we have a new budget on there that's different and a new breakeven price and stuff, but the breakeven price there was 238. So I said you could come down here and get one, producer should talk to their lenders or lender should talk to their producers and see how much you wanna pay for a premium, but you could get a, instead of paying $50 at the top, you could bring that down to $18. And that would actually that lower 239.69 would be in the money now. Yesterday the cash settlement price was 238 and today it's off another, just now came out, it's off another dollar to 237, but still wouldn't quite cover the premium but getting close. Over there I say now the March feeder cattle was 235, that's what they were yesterday, but again, they're down to 229 today down 555. So just a crash. So wanna go on then and talk about what's happening and these charts are actually based on yesterday and again, they're going to be down and what's happening is the cash market is behaving very normal like it usually does. It's just the futures market is beserk now and what happened was we'll start off here with live cattle, December live cattle on the top and then we'll go to feeder cattle in a minute. You go back there to mid September, you see the futures were up there at 191 and the cash market was down there at 182 or something. So the futures was way above and by December they have to come together. So the futures market started ratcheting down to get closer to the cash market which it did got down there closer by the end of October, but then it just kept going and pick up a little bit but now the last few days it's crashed down again and is way below the cash market. We had a 185 cash market last week and now you see the futures were down there at 179 and today they closed were down five bucks at 174 so they're way below the cash market. So what's happening is just the funds are risk off with cattle, they were long cattle for many, many months as you see on that chart way back and then when it started going down it's just hitting their stops and going down and so the cash market you see is relatively stable. The chart that I always show you is on the bottom there we were our peak was back there yet the first week in June we were there at 188 but we were 185 last week. So the cash market is stayed in there it's the futures market that just has went down and the same thing on feeder cattle and here's on the top is November feeder cattle futures back in mid-September they were up there almost 270 and the cash market was down at 252 or something and so then the futures had to come down to meet the cash and same thing happened with when the October feeder cattle closed and so then down and the cash market has been going down but as you will see in a minute the cash market going down after mid-September is very normal it always does and so the cash market went down and the futures just followed and I'll accept the last couple of days then they've really been bailing out a feeder cattle so yesterday there it was 234 I guess and then the March futures today are off 775 at 227 so now they're way below the cash market but back to the normal that the cash market usually does go at this time just go down to the bottom that we always look at and we peak there in September this year and that's usually a good time to look at price-risk management for backgrounding cattle but that usually happens go down last year the blue line it peaked there in September a little bit earlier in 2021 but right around a little early in September but it always peaks there in fact the 10-year seasonal average here back to 213 to 2022 you see that peak there and what a seasonal index is you go across from one that means prices the red line is the average that they're 5% higher than normal and then they keep on going down into usually into March when all those cattle hit the market so the cash market declining was very normal and that happened and not abnormal it's just been the futures and on the bottom then it's kind of interesting where we take the 750 to eight pound steers and minus the fed steers and they usually do peak in September the spread because they're buying feeder cattle now but they're hedging them against the April live cattle futures that are out into the distance and which are usually at a seasonal peak themselves in terms of fed cattle but this year they were way higher you see up there at $73 instead of $43 about $30 higher and then as those distant that April live cattle futures started falling they've ratcheted down not quite back to a normal situation but down further so that's what's happening the cash market is behaving very normal it's just the futures market were too high and now they're too low and the funds are bailing out and they continue to do it today so we're put in a little plug here we're gonna do a backgrounding seminar on November 28 so that'll be another chance for you to hear me and get an update in particular as it pertains to feeder cattle and again, we may even have to update the budget again that's on the website the way you can put your own numbers in there anyway in that website that I showed you at the beginning but we're gonna talk, I'm gonna talk and Parman's gonna talk about several different budgets for feeder cattle, heifers and steers and lower weight gain and so on and Carl Hoppe is gonna be on with some different rations and Zach Carlson talking about implants and Dr. Stuck about calf health so help yourself to that, there's the website it'll be live seven o'clock on November 28th but it'll also be recorded if you wanna see that just end up, Thanksgiving's coming up here and again, last year, turkey prices were record high and there was all this talk where there wouldn't be enough available and I assured you then that there would be available but yeah, was that higher prices even influenza was the best big thing and even influenza has hit again this year but not affecting us near as much as it did last year and we've got a lot of turkeys on hand ready for Thanksgiving and so the price you see has went back down to normal and on the whole birds on the top and on the bottom, same thing on turkey breasts so there will be good buys if you wanna know why, our newsletter that came out in November here explains all this and you can, most of you I think get that you can just read that and you see wholesale turkey breasts were 230 or something last week at the wholesale level we have a retail store in Fargo last week that had a turkey breast for 169 so they're gonna be cheaper turkey if you want turkey for Thanksgiving or if you want other meat products there'll be plenty of them too so with that, I'll stop sharing and turn it over to Ron I'm gonna talk this afternoon good afternoon everybody Ron Haugen, farm management specialist I'm gonna talk about the new emergency relief program it's actually not that new it's been announced but the regulations are finally coming out and you can actually start applying for that and I say that you don't really have to do much to apply as well, so I'll get into that I thought I understood this and with every new program there's always some confusing things that I don't quite understand but I'll try to tell you the best I can about the program first of all, the program was signed back in 2022 by President Biden it's about 3.7 billion for assistance to egg producers impacted by some kind of disaster you could almost name any kind of disaster and it's probably covered in this kind of a little overview this is called the emergency relief program 2022 the other program we had was for 2020 and 2021 so this one is for 2022 just to keep that straight the last program we had had phase one and phase two now they changed the name they're calling it tracks we have track one and track two a two track process I've got a lot of words on my slides here but you can go and look at our recording and I won't go through everything word by word but I wanted to have this out here in case you needed to double check some technical thing here but anyway just a quick explanation track one if you had crop insurance or nap insurance that's the initial basis for calculating the payments track two that's for anybody that slipped through the cracks and may not have had that insurance and just to try to cover everybody first of all eligibility a lot of different crops are qualified for track one the only thing is they have to have crop insurance or nap not crops intended for grazing however these are the natural disasters that are covered does that a wildfire tornado hurricanes it heat winter storms but one thing that is not covered is a hail loss as far as I can tell hail is not covered so how do you apply? we really don't have to do much FSA is in the process of sending out applications that are already filled in because they know all of your crop insurance and nap information but just because you get an application in the mail doesn't mean you are qualified or doesn't mean their numbers are correct you better check over those numbers and make sure you're qualified before you sign on the dotted line and send that back to them okay there is an online tool the USDA has that you can actually put in some of your numbers and help you figure some of this stuff here's how things are calculated for track one they use what you got for your insurance for 2022 for crop insurance losses or nap losses and here's something new it's called a progressive payment for those that do not have 75% of their income from farm there's what they call a progressive payment and it's trying to I think the objective here was trying to weed out some of the people that are getting out farm payments that aren't really farmers some big let's say movie stars that own farm land are invested in farm land and get payments and they're already multi-millionaires so there's things like that and that's why they put in here I'll show you the chart here in a little bit also any underserved producers they get a break on this they get their share of premiums and fees added to their payment that they paid and underserved producers are beginning farmers veterans and other socially disadvantaged here's the chart of that progressive factory which I don't quite understand yet I tried to study it more this morning and I got a little bit more confused so it looks like if you got a payment over $2,000 that's fine there's not really any change but if you get your payment over 10,000 then you're gonna be weeding it back and so just to keep that in mind there is something a little different than the ERP program we had before this is pretty much the same as ERP for 20, 21 and 20, 21 phase one basically it's bumping up your coverage levels for the insurance that you had is what it's doing and this table looks exactly the same as the previous program a couple years ago now in track two that's the second track there's two options within the track two the option one people maybe are familiar with this one this is similar to phase two of the ERP and this is where you need to provide your tax information for your gross revenue and you need to take out certain things and add certain things and then basically just provide FSA with two numbers from the benchmark year and the disaster year okay the second is the expected revenue option and those are for the people that probably don't have the proper records or another situation just to kind of so nobody slips through the cracks the expected revenue option so the first option the tax year option basically you get your tax records and if you choose to be in track two you select 2018 or 2019 as the benchmark revenue as the disaster year and then you the benchmark year you select 2022 or actually 2023 as your representative year okay and you need to get your gross income from both of those years on the expected revenue option allows you to certify your revenue in what is what they call a reasonably expected revenue absent any disaster conditions a little more complicated to figure that out so here's a chart just showing the track two options you're looking at 18 and 19 and then you're looking at 22 or 23 for the tax year and I imagine most people would fall under the tax year option under track two the expected revenue option you're a little more complicated you're using the actual revenue from all eligible crops that are included as I mentioned under serve producers limited resource socially disadvantaged veterans farmers and ranchers will receive an additional 15% factor also anyone that signs up for these programs you are required to get crop insurance for the next two years or nap insurance one thing that was a little new additional information producers who apply for track one then you can also apply for track two and it looks like you probably should apply for both but their track one payment will be reduced from anything from track two so there isn't any double dipping so next I'm gonna talk about the ELRP 2022 and that's the livestock part of it okay and this is fairly simple very simple and this is to help people offset disasters that produce livestock okay how to apply there again very simple it's a streamlined delivery eligible producers you do not have to submit an application the IRS has an I mean the FSA hasn't already figured out for you and here's how it's calculated if you were in a disaster county in 2022 and it qualified for livestock forage disaster program LFP you automatically get a percentage of that and what you get is 90% of that for underserved and 75% for everybody else but you're not gonna get that right away you may not get that because there's 500 million targeted for this so they're only gonna pay you 25% of your proposed payment at this point and then you wait and see how many people apply and you might get more of a payment later so that's a pretty simple way but the thing is for North Dakota in 2022 there was actually only let me see one, two, three, four five counties I guess that qualified for LFP so the way I read it the only people that are gonna get any payments under that program are people that live in this county and had an LFP payment so that's the way I understand that program at this point so there are payment limitations if you had adjusted gross farm income less than 75% of your average then you're limited to 125% for the specialty crops and non-specialty and the livestock if you're adjusted gross as more than 75% of the average then you go up to 900,000 for the specialty and high-valued crops vegetable-type crops 250 for non-specialty and 250 for livestock so as always looked at farmers.gov, USDA.gov they've got some good tools and good fact sheets that you can find out about all the details and as always contact your FSA office for all the details, they can help you out a lot so with that I will wait till the end and I will turn it over to David after this and he will continue on, thank you. Great, thanks, Ron. Excuse me, I have some comments about renewable diesel situation continues to impact biofuel markets and the US agriculture so a couple of things, some highlights of what's going on we may not have felt as much in North Dakota but there has been a significant decline in truck freight this summer especially but for last year so there's some expectation that may be ending there's like a very strong relationship between freight movement and diesel use as that's the primary fuel for freight the United States both for trucks as well as for rail not a big surprise but the renewable diesel market is continuing to grow we still don't know how big it's gonna get in terms of market share on the West Coast those states with the low carbon fuel standard but it's continuing to, both production and use is continuing to grow at a very steady clip finally we're really entering what I think is this new phase up until the beginning of this year other feedstocks, non-vegetable oil feedstocks really dominated the renewable diesel market because they had a very low carbon footprint and we're somewhat out of position we had a lot of that production taking place in the US Gulf where biodiesel production, vegetable oils produced primarily in the Midwest or plain states and so that went into those biodiesel refineries which are also located in the Midwest just digging in a little bit talking about the trucking recession or freight recession as a chart here from St. Louis Fed you see these occasionally from us they have a little service that makes figures on a variety of time series this is data from US Bureau of Transportation Statistics essentially NAS for the DOT at the federal level to note here again they use an index because it's not necessarily just tons moved or cubes moved or gas sales so they have a formula for their index but if we look at it basically looking at this summer so we look in the kind of the lower right hand side we see that dip this summer and then especially if you go back into last year you can see how much lower it is and again that is this recession that we've been experiencing or that's a term we've been using for it and it's important because as that has happened we've seen a decline in diesel use to a small degree but it's important to keep that in mind as we look at some of the numbers I'll show you in a second we did just get the new numbers from California so now we have their data through the end of the second quarter so the two June 30th and kind of a longer figure going back to 2016 for this we passed we had renewable diesel exceeded diesel sales in California in the first quarter of this year and the adoption that slope of that line is actually increasing increased during the second quarter as we're kind of continuing that streak and if you can see biodiesel for quite some time has been a smaller part of this market again because the blend issues that the logistics issues of Manning's that really weren't as appealing and renewable diesel in many respects has hit in this sweet spot being a low carbon fuel and working well with the existing petroleum distribution system so there's a lot on this table couple of things to get to point out we have some negatives we have some positives actually starting the lower right hand side in California looking at this last quarter so it's the second quarter of 23 compared to 22 the combined use of diesel biodiesel renewable diesel was actually down by 5% so that's a significant amount if we go to the far side to the left staying in that change over the last year you can see that diesel use in California is down by more than a third so those months April, May, June from 2022 to 2023 there was a dramatic reduction in diesel use for the most part offset by renewable diesel but again the actual total amount of diesel used was down significant we're expecting this to recover again going back to that trucking recession issue these charts just kind of these pie charts kind of give you an idea of the size of the market share that renewable diesel has going from just over a third second quarter last year to more than half for the second quarter of this year biodiesel's kind of holding its own this is clearly coming at the expense of diesel which has that larger carbon footprint digging a little bit deeper I don't have the label on this this is from EIA, USDOE's information service and it's dated they've been reporting monthly since the beginning of last year that shows vegetable oil use for biofuel particularly interested in diesel production so if we look first we can see that big green line so soybean oil absolutely dominates in terms of vegetable oil use complementing the non-vegetable oil feedstocks which are tallow, grease and the like but soybean for both of these so again this would include the biomass-based diesel is both renewable diesel and biodiesel soybean oil still rules and it should be corn oil for the blue and then canola for the red there but anyways really dominates those other oils and if we split that soybean oil into biodiesel or renewable diesel which is the solid parts of the chart you can see that biodiesel for soybean oil is actually held steady which is interesting because we have added all of this renewable diesel production but that's really kind of the case that we were expecting and continue to expect where biodiesel production is going to maintain where it has been and new growth will be on the renewable diesel side just looking a little bit at what feedstocks were used in California only for the quarter biodiesel is interesting because I look at this and what it is is kind of a mess so I mean we don't have a dominating feedstock and it's interesting in California soybean oil has typically not been used hardly at all to produce biodiesel let's use in the state again they're looking for low carbon feedstocks and so use cooking oil and tallow or more highly valued in California which explains some of that dominance now if we go to renewable diesel there's a couple things to take from this I'd actually start looking at that soybean oil line so it's that yellowish-orange line if we go back two years it really wasn't used for renewable diesel that market was dominated by all of these alternative oils and corn oil to some extent because that is a co-product from ethanol production and then we see more recently kind of a pickup and use cooking oil against small carbon footprint high demand we have soybean oil kind of maturing and we've really hit this point if we really look over the last three quarters where this tremendous growth is coming from and again we've essentially tapped out the non-vegetable oil feedstocks I really don't know where this use cooking oil has come from wink-wink China it might not be used cooking oil but going forward we're now in this place where and tallow too is essentially tapped out we had a slight build out but now it really is looking at the major oil seeds so corn and canola especially to fill that role and we're basically in this beginning of a continual kind of steady if not even more dramatic increase in soybean oil use and again this is one of the reasons why we're seeing all the new crush plants here in the upper Midwest all of this interest proposed crush canola plants in Canada to help fill this growing demand and again if you remember two months ago I talked about California adjusting their expectations or adjusting their targeted mandate for low carbon fuel so there's a much bigger market even now expected than there was earlier this summer we're just at this point where all of this vegetable oil was coming online is gonna go into these renewable diesel refineries and have that actual true physical movement vegetable oil that we've been looking forward to for a few years so those were my comments with that we'll take questions you can use the chat tool or the Q and A tool to do that we already do have some so we'll field those but if any come to mind as we're responding feel free to add your own question we will be back last month we'll be back next month for the last webinar of the year but with that we'll open up the question docket and it's too bad Brian isn't here but our first question is about the record land sales in Pembina County so there was in the news in the last week information about land sale in Pembina County which was $17,500 an acre. Well, and I looked up the David I looked up the report on Red River Farm Network News they said there were two quarters sold one of them was at just over $19,000 per planted acre and the other was $18,700 per planted acre so a little higher numbers that we saw on the national stage and it definitely got national attention as well as local attention obviously. Yeah, it seems high. Yeah, I guess I'll make a couple of comments on that you know again I wish Brian was here to be able to field it I guess a couple of observations first for that kind of investment whoever purchased that is obviously looking at it in a very long-term planning horizon at least I hope they are the other so it's not one of those buy it and flip it quick I just don't anticipate land prices continue to go at this rate. The other obviously other portion of that is the financing and the cash flow part of it you know there's going to need to be some borrowed capital involved in that purchase but there's going to be a very significant cash down payment as well and because it is Pembina County I do believe and I don't know the parties involved I don't know any of the background or history or story behind the land or the property itself but if I were to guess I also think some of that is driven or will be driven by expected very large sugar beet payments this year because as we've seen over the years the sugar beet acreage has shifted more north so the Northern Valley has a much higher concentration of sugar beet production than the Southern Valley there's obviously things going on throughout the whole Valley region but a lot of that soybean acreage has been pushed north by competition from corn and also some disease problems so I think there was a combination of high competition there's obviously a few people that thought it was exceptionally valuable land the fact that they were sitting on probably some really good cash flow where they were able to make a large down payment and I think the expectation that this is going to be a very long-term investment that would be my take on it. Thanks, Brian, any other comments? We did add some discussion internally when the story came out and you know, frame summarized a lot of that but again, someone for some reason you know, found a justification for making the purchase and Brian it's unfortunate again that he's not here because he did a nice analysis in terms of the cost to actually finance a property like this or a purchase like this or the returns that you need from it it's really surprising, it's a very high number that I don't think many of us were necessarily expecting but I'm sure every landowner was just saying hey, let this be the new thing that's a great price if you've got it the next question and I'll throw this over the frame as well with increased soybean crush coming online in the United States should we be concerned about slower whole bean exports and the size of the Brazilian product? Yes and no, so it's kind of a mixed answer so the, we have to think about relative size and rate of growth or rate of change so Dave, could you just stop sharing for a second? I did pull up one slide that I think will help tell the story fairly quickly here at least on the, yeah, I'm gonna hang on I gotta share here, share so now this is from the October was the not the November one so there'd be some subtle small adjustments but the blue line on top is the amount of this is USDA forecast now the amount of soybeans going into the crush sector the red line is the amount of soybeans going to the export market and the little dots on the far right hand side represent the current forecast for the crop that's being harvested right now so you can see, yes, there'd been a nice steady growth rate in the blue line which is the crush demand ability to be able to crush soybeans in the oil and meal and obviously Dave just talked about the demand a growing demand now for noble fuels and the soybean oil going into that product but look at the growth rate so the growth rate in crushing capacity because it takes a while to either take an existing facility and expand it or to build a brand new facility and so again on the margin what is the growth rate of our crush capacity and that's been a nice steady growth and I do expect that to increase the rate of change to increase so we're going to see a higher growth rate in that blue number but also notice the rapid drop off that we've had on the export side now, the last year so about two years or three years ago now we had our record soybean export years so the last couple of years seeing a retracement or kind of a slippage fall back on those numbers was not surprising I guess it's very hard to have record years over year after year after year however now as we look at the drop off or additional reduction that we're looking at the exports again because of the competition we're getting from Brazil and the fact that the demand base out of China is starting to kind of flatten out where we're not seeing the rapid growth or expansion of the Chinese demand base it's still growing but at a much, much slower rate the combination of those two increased supply demand is starting to stabilize and all of a sudden now this global market for soybeans for whole soybeans get to be very, very competitive and so a little bit of my concern now moving forward if Brazil has another record crop and actually bust the top off the old record what does that mean for the US's ability to stay competitive? And yes, we're seeing a growth in the crush capacity but the reduction in exports is actually far greater than the growth in crush. So I guess I hope that answered the question I hope I was clear. So yes, there's still a very strong need to watch what's happening in South America. Right, thanks. There don't appear to any more questions so with that I'd like to thank the other presenters as well as all the attendees for joining us today and we will be back next month, December 14th for the last webinar of the year. Thanks.