 Welcome to this month's webinar. My name is Dave Ripplinger, Extension Economist with NDSU Extension. This is our monthly webinar, Agricultural Market Situation Outlook. As usual, we have a number of Extension specialists, working economics are going to give you updates on different things happening in their field with questions at the end. We encourage you to ask those questions, either using the Q&A tool or the chat tool, really is your opportunity to engage more with us and the topics that we have for you this week and any other questions you might have. But with that, I'll turn it over to Brian Parman. Thanks, Dave. So I'm going to get my screen share up here in a moment. But what I wanted to say, you know, last time I talked about fertilizer prices and some other production costs, kind of where they sat last fall. This time I'm mostly just going to do an inflation overview and sort of where we're at with that and rates. Not super in depth next week and Dave's going to hit on, we have our Lenders Conference where I'm going to go much more in depth into a lot of these topics I'm going to talk about today. But for now, just sort of a highlights from the report that just came out today and some of the reports that came out last week. So the inflation report that came out this morning from the Bureau of Labor Statistics, the Consumer Price Index, it was a little bit higher than only one-tenth of one percentage point higher than what the trade's expected. But what's kind of happened here is the last three months, the overall or headline inflation has leveled off, you know, between 3.5 and 3.7% for the last three months. And this is where it stood this morning on all items, 3.7, industry expectations were 3.6, so pretty close. And then that core inflation number has been pretty stubborn at hanging out above 4%. And that's a number, again, that the Fed's target on inflation is 2%. Both core and headline inflation. And if we recall just a reminder, core inflation takes, it says, you can see at the bottom, all items, less food and energy, and that was 4.1%. And then I wanted to show food inflation has been a hot topic for the last year or so as we've seen prices change. And I got a table here coming up that shows specific categories of meats. But cereals and bakery products, those products remain, their prices have continued to increase as well as non-alcoholic beverages and materials as well. Dairy related products, the inflation year over year has actually fallen and then meat, fish, poultry, eggs is pretty flat, very close to where those prices were last year. And so the BLS also pulls out, you know, these specific items for food categories, not just food in general, but the overall food cost. Beef, and this is a percentage change from September of last year. So from September of last year to September of this last year. And as an aside that that report that comes out, it's always a month behind. So the report that came out this morning was for September. So ground beef up about 8% roast, beef roast up almost 9%. And then sirloin steaks up about 9% as well. Interestingly, bacon was actually down right now or in September year over year down 8%, whereas some other pork items like pork chops up three and a half and then ham up almost 10%. Some of the fresh chicken for the most part about the same whole chicken, breasts and stuff as well, mostly but leg bone in legs down considerably so your drumsticks are a lot cheaper. Big one eggs. We remember that egg prices had had just skyrocketed. So the decline in egg prices essentially is just the market. You know, there was a little bit of a short supply on eggs concerns about illness running through the US flock. Well, and obviously Tim can comment on that a lot more than I can as follows it more closely. But as that's come into line, we've seen eggs down 30% year over year from September of 22 to 23 cheese down a little bit. And unfortunately for you beer and wine drinkers up 10% for both of those products almost since last year. So, but by and large food prices. You know, if you go back to this slide here, overall up 3.7% essentially mirroring overall headline inflation. Now, another thing that's being talked about and this is one of the bigger drivers, one of the things that's really pushing this yearly price increases are home prices. And this is the home price index from the from the Federal Reserve, and as of July, the home price index had reached an all time high. So, shelter is a big category in the and when they do that consumer price index, and with home prices continuing to hit new heights. That's one of the things that's driving and one of the reasons why that inflation number just is pretty sticky and and we've gotten down to three three and a half percent and it's just kind of not budging much below that. And a big reason why they're especially on the core inflation side is this shelter costs. And that one thing though that that is concerning well that here's a couple of concerning factors going forward and you know I'm not going to spend a ton of time going over it now and I will at our lenders conference next week a lot more but the producer price index which is upstream items, you know, the producers producers of goods that are going to eventually sell them to consumers make them or whatever. That inflation number is remaining pretty pretty stubborn and is actually increased 2% up to over 2% which it was concerning for those for that producer price index. And then this situation. So you got the home prices stubbornly continuing to march upward. But the other situation is in the labor market. And that's the fact that as of right now, there are 0.7 unemployed people per job opening. In other words, they're far more job openings than there are people to fill those jobs. And you go back to the last time we had a big recession I'm not talking about covert which is the spike you see right there under over August 2020, which you go back to August of 2009 2010 the great recession. We call it there were six unemployed people per job opening. Okay, and a lot of what drives recessions and what recessions are made of is unemployment. And I've mentioned it not just on this webinar but speaking abroad that one of the things that causes people to slow down their spending is fear of losing their job or fear of being laid off or struggling to find a job. Well, that's just not the case right now. So, because of this fact that it tends to be a worker friendly labor market. Folks just aren't afraid to spend even with higher interest rates. And then, and then, you know, if you're not afraid of losing your job or you're not afraid of your wages being stagnant as wages have continued to march upwards. You know, you keep spending and then that's one of the issues with inflation but and then the last thing I want to say about it is the conversation for the most part recently has changed from how high will interest rates go to how long are they going to stay where they're at right or add or around, you know, because a lot of the consumer rates are over 8% as well as commercial. And so even if the Fed did increase interest rates another or the federal funds rate another quarter of a percent, which would probably drive interest rates up a little bit more maybe or maybe not. The question is now shifted because to, okay, well how long do they have to remain this high. Now, my opinion on that is largely until they have to bring them down. And I think that realization is starting to set in which is why you're seeing some of these treasuries like the 10 year yield starting to creep up as folks are starting to perhaps realize that these rates are here to stay for a while. I don't know how long a while is but this talk of cutting rates, you know, next spring or next summer is starting to subside largely. And I would ask, you know, to conclude on that, if if the if the objective is to maintain inflation at 2% and it or a target of 2% and right now it's 3.7. What do you think would happen if the Fed suddenly slashed the federal funds rate from five and a half down to two or 1% and interest rates plummeted what what does everyone think would happen in that scenario. And I think we all agree, we would see inflation shoot way up right away I mean within a matter of a few months it would start surging again. So when when you're thinking about how long are these rates going to stay elevated. I guess I would ask you if I were you I'd ask myself. Well, what would happen if they cut them today or next week or something like that. What do you think would happen under that scenario. And that's why, you know, I think that realization is is coming. So like I said, if you are coming to our lenders conference next week. I'm talking about this much more in depth and a whole bunch more topics on the macro side as well as our ag finance outlook. But just just a brief report on what this latest information and the data coming out from from a month ago just wanted to hit on that for anyone who who isn't going to be with us next week. So with that, I am I am finished. I'm going to stop sharing. I'll answer beyond answer a few questions toward the end like always. And I'm going to go ahead then and turn it over to Frank Olson. Thank you. Good afternoon everybody. Frank Olson I'm the crop economist and marketing specialist with NDSU extension. I'm going to talk a little bit about the report that came out today are actually the two reports that came out today. The WASDI, which is the World Agricultural Supply Demand Estimates and then the production reports. Before I jump into that, I do want to talk about a couple key market things that are going on. These are questions that I'm going to get. I know it's throughout the next several weeks. So I thought I'd try and hit him head on first. So to summarize very quickly before we dive into the exact numbers, the USD reports that came out at 11 o'clock today were considered positive for soybeans. I think we're already seeing that in the markets. We're up about 39 or 40 cents on November soybeans right now. It's slightly positive for corn. I think it turned the kind of the mentality and the shifting of the corn market to more of a positive tone than a negative tone corn. December corn is up about 8 to 9 cents right now. It was actually the numbers were slightly negative for wheat. Even though spring wheat is up about 7 right now for December spring wheat, actually the numbers were slightly negative. Some of that we had already knew about because of the September Small Grains report. We'd already got kind of a preview to what was going on. I do think the reason we're up a little bit in wheat right now is more in sympathy with corn and soybeans. And we had some slightly positive news when we look at the global wheat front. But I guess if I were to look and isolate the numbers for wheat only, I'd say they're slightly negative. The other thing as we move forward in time, and I'm going to be spending some time as Brian talked about in our egg lenders conference, is talking about the export market in particular now for corn and soybeans. US corn exports are actually off to a pretty good start this year when we compared where we are right now relative to what we saw last year. Corn exports are slightly ahead of the pace we saw last year, which is a good thing. We've had some really nice export sales in particular into Mexico. However, for soybeans and wheat, that export pace is slower than last year. Now the soybean export levels last year were not great, but they weren't horrible. Unfortunately for wheat, they weren't great. And so as we think about what's happening in the dynamics in the marketplace, the soybean export pace I think is because of the very large Brazilian crop. The Chinese are still pulling most of their soybeans from that Brazilian market. They will eventually switch to US beans, but the fact that they had such a large crop has extended their export window, allowing the Brazilians to supply the Chinese market to a longer time period than normally would, and that is going to put a damper on the US soybean export outlook. For wheat, again, just the world wheat dynamics is kind of unusual right now, and the US is still a bit high priced relative to some of the other suppliers. So I do think we have the capacity to start increasing some export sales, but we're going to have to be a little bit patient and wait for probably until late November or December before that happens. I am getting some questions about what's happening now between this conflict between Israel and Gaza. I'm calling the conflict. You could call it a war, depends upon who you talk to. So far it's had relatively limited impacts on the grain markets, but that may change if the conflict grows. If the number of countries involved starts to expand and this grows into a larger conflict and basically being isolated right within the Gaza region, that could obviously change the dynamics significantly. Or if it continues for an extended period of time, if this thing kind of drags out for a while, the concern is first impact would be on grain shipping or grain shipment because of the congestion in the Mediterranean Ocean as well as the Suez Canal. Suez Canal handles a lot of oil shipments, energy shipments, not so many grain shipments, but it does have an impact if you think about wheat shipments or corn shipments from Ukraine or Russia into the Indian market or into the Chinese market. They usually try and go through the Suez Canal as a shortcut to try and save some time and some cost. The other possibility, again, if this expands geographically or extends for a long period of time, Egypt is the largest wheat buyer in the world, obviously a next door neighbor to what's going on. We have the North African nations as well as the other Middle East nations like Iran, Iraq, as well as Afghanistan. All of those areas do buy off the global market by a tremendous amount of wheat, primarily hard-read winter wheat. The US isn't a huge market for US wheat anymore, but it would have an impact globally on the supply-demand conditions for global wheat. Just a quick update on Ukrainian grain movements. They continue to be challenged. There continues to be some drone strikes. The Russians are sending drones across and trying to hit the grain facilities and export facilities in Odessa, which is still open for business right now, as well as some of the facilities in particular grain shipments out of the Danube River. The Danube River, which starts in Central and Western Europe, runs into the Black Sea, and they can use that for barge traffic. The fact that these drone attacks continue to cause problems has really hampered the ability of the Ukrainians to ship large volumes of grain. They are trying to get some safe shipping routes, some cleared routes through the Black Sea, because that is the cheapest and most effective way to get grain out of the region. But there's still been some stumbling blocks and some issues there. Recently, there was a Ukrainian vessel that ran over a mine and exploded. Now, fortunately, there was no casualties, but the ship was damaged and it caused some problems and, of course, increased the anxiety. And just one more thing for the folks that deal in the pulse markets. There is an ongoing dispute between Canada and India over the murder of a sheik separatist in British Columbia. And so there's this political tensions going on between India and Canada right now, which is now spilling over into the agricultural sector. The largest potential agricultural trade impact would be for the Canadian pulse crops. Now, we are both a competitor and a supplier of pulse crops into Canada. So this could have some either positive or negative impacts on U.S. pulse crops, primarily field peas or lentils, depending upon how you want to interpret what's going on. Just as a sidebar, just as a reference point, India buys approximately $1.4 billion Canadian dollars of pulses from Canada and approximately 50% of the Saskatchewan lentil crop goes directly to India. This is a big deal for the Canadians. It is something to watch because there could be some spillover pressure or spillover opportunities into the U.S. pulse market, depending upon how all this plays out. So diving into the numbers, let's start with the production numbers. Again, two reports that came out today. One is the world supply and demand estimates, which I'll talk about in a second. The second was an update on the production reports. So in both September and October, USDA has three sources of data they use to try and estimate what yields are going to be. One of them is a farmer survey. The second is using sensory data or satellite imagery to try and estimate what yield potential is. And the third, starting in September and October, is actually ground truthing it. They send people out for what they call objective yield surveys. They have people that they hire to go out and do a yield estimate very similar to what a crop adjuster would do. So to explain this table very quickly, we have corn and soybeans. The highlighted blue on the very top is the average trade estimate. So this is the number that the traders and private analysts were expecting to see. This was kind of a summary of their forecast of what USDA was going to develop. Towards the kind of towards the bottom highlighted in black was last month's numbers. So this is the information we got last month. And on the very bottom in red highlighted in red is the current estimates, the ones that came out today. So I usually recommend that we compare the blue numbers to the red numbers. We were expecting a slight retraction or a reduction in yields. We did get those the yields for both corn and soybeans were slightly more aggressive. The cuts were more aggressive than we first saw or first were expecting. So as a result, not only was the average yield lowered, but then that translates into total production. Now, one other thing that we have to be concerned about moving forward of course is we also at the very end of September had the closeouts, the final inventory numbers for last year's production. So when we do a survey in September to find out what the September one ending stocks are that becomes the ending stocks for both corn and soybeans. So those numbers we got in September are now rolled into the supply and demand estimates. So we've got a bunch of changes going on, not only a change in yield forecast, but also a change in the inventories available from last year that we're going to bring into this marketing here. So reduction of yields, this is what we expected the reductions were a little bit larger than than we had first anticipated. So as we think about what does that do to the forecast for ending stocks in the current marketing year? So now we're focusing on the crop that is being harvested right now. We're thinking about 12 months forward and saying, well, how much green do we think we're going to have from the bin this time next year? Okay, and it's that number that we start bouncing up and down and trying to say, are we rationing, is the pricing system rationing our inventories adequately or do we need to increase or decrease prices to try and get the right balance? So once again, the highlighted blue on the very top is what the trade was expecting to see. This was their private estimates of what USDA is going to release. The highlighted or bolded black is what we saw last month. And then the October numbers highlighted in red is what we actually got. So if you look at the amount of wheat we expect to have in inventory just before harvest next year, that actually went up. Now we were expecting an increase for twofold. Number one, the yield forecast for wheat went up because of the small grains report and we had a little bit more wheat left over from last year coming into this year. So our beginning inventories increased a little bit. The production levels were a little bit higher than we had first expected last month. And so as a result, our bottom line increased. Now the increase in wheat was a bit larger than expected. Thus, the reason I said that I think this would be a slightly negative tone into the wheat market. For corn, if you compare the blue versus the red, we were expecting a cut, a slight reduction in the corn ending stocks. We did get that a little bit larger than we had expected, but well within what the trade was expecting to see. So again, slightly positive. When we look at the soybean numbers, the number was basically unchanged from last month. And that was a bit of a surprise, I think. A lot of folks were expecting a slight increase in the soybean ending stocks number primarily because we had a few more soybeans from last year. We were going to carry forward into this year. And so as a result, they were expecting the ending stocks to go up, but we had a little bit larger reduction or cut in yields than we had first expected. So as the net of that were basically unchanged. The other thing that I do want to comment on on the soybean side is that USDA did lower their forecasts for exports. So for the export season now in 2023-24, they did decrease their year-end totals, what they expected to see throughout the year. I think the reason because of that is because the kind of the slow start that we're getting to our soybean export season right now. I do want to, in my last couple of slides here, want to make a few comments about what's going on in the Mississippi River levels. We had a problem about this time last year developing. It looks as though that we're going to have a repeat or part two of that particular story. So I wanted to give you some insights into what's going on. And the reason I'm doing this is that there can be some indirect or spill of our effects in what's happening with our grain shipments through the Mississippi River. So this is the river level at Memphis, Memphis, Tennessee. So this is, again, the challenge we're having is in what they call the lower Mississippi. It's that basically from St. Louis south is that stretch of the river they call the lower Mississippi. And because of very dry conditions for the drainage area of the Mississippi, that region now is experiencing some very low water levels. So the water levels, the reason they're low is of course the rainfall, but that's causing challenges for barge movements. And what we typically see, and I'll show you some graphics in just a moment, we typically see about the time that harvest gets rolling, a lot of the corn and soybeans that have been sold for export for kind of harvest delivery time period. The flow of that grain from the field into the local elevator into a barge and finally into an export facility to be loaded onto a vessel is pretty well scheduled. We know plus or minus what the flow of grain is going to look like. And so the fact that we're seeing these lower river levels, the fact that our barge traffic and the ability of the barge system to be able to move grain into the exports at the Louisiana Gulf caused some problems last year, but it's also going to cause some problems again this year. The real question is how long will these problems last? And of course nobody knows that because it's really going to take some recharge of the rainfall and actually put some pretty significant rainfall for those Mississippi river levels to increase again. So this just shows just like we have here in the north when we think about flood stage, we have normal river levels that kind of vary within a particular range. If the river level gets above a trigger point, they consider that it's in minor flood stage or moderate flood stage. Well, we have the same thing for low water levels. So the minus five feet, so basically five feet below the normal levels we see is considered this low stage where transportation and other usage of the river becomes an issue. We're now minus 11 feet. And the forecast going forward is that that's not going to change. And this is causing problems because we have sandbars that started showing up. There has to be dredging that goes on. The barges cannot be loaded to their full weight. So the barge has a draft. So the more grain you put into it, the lower it sinks into the river. Well, you can't load it as heavy because even though there's water flowing, that water level is so low, you might get grounded very easily. And so the traffic is causing, the slower traffic is causing some problems. Fortunately, we do get weekly updates on grain movements through the USDA grain transportation report. That comes out every Friday. This is the information from last Friday. So I just took a snapshot of what's going on. This is the grain, the barge movements for grain at Granite City, Illinois. So this is a little bit further up the river, but it does give us an idea of the breakdown of not only the volume being shipped, but also the type of products being shipped. So the black line on top, that single line is the three-year average of grain movements through that particular lock, lock 27. And then we have the bars, which is this most recent information. So starting in October 1 of last year, running through, of course, the end of September this year. And as you can see, we have, depending upon the time of year, we have about an equal split between corn and soybeans. But there are times when soybeans are a little heavier shipped than corn and vice versa. So notice that when we compare the bars to what the black line is, which is normal, for the last several months, we'd have slower than normal shipping. Now part of that can be our export pace, but also part of that is, of course, the river levels and the ability of the barges to be able to move that product to the destination, which is Louisiana Gulf. Now barge freight rates. So this is not only the volumes being shipped, but what's the cost of shipping? So the green dotted line is what we saw last year. So this is the freight rates per barge moving from the St. Louis, Missouri loading point into Louisiana Gulf ports. So the dotted green line is 2022. The dotted red line is the five year average. And then those blue bars is what we're seeing now in 2023. So every week we get an update on barge freight rates, and it does vary depending upon where you are within the river system, whether you're on the Ohio River, the Illinois River, or the Mississippi. So this is just a reference point just to give you an idea. We're now starting to see those barge rates increase very similar pace to what we saw last year because we had a similar problem with low water levels and barge traffic this time last year. So it looks like we're going to have version two of the same story. The reason this becomes significant for our area is that if this continues long enough, if the barge rates get high enough, the first thing is to shift over and try and transport by rail freight rather than by barge, which is going to be more expensive, but at least you can get the vessels loaded. But if this continues for an extended period of time, what happens is the origin, the loading point for some of these grain products may shift from the Louisiana Gulf into the PNW. Now we do have some Gulf port facilities in Houston, Galveston. They're smaller facilities. They tend to handle larger volumes of wheat relative to corn and soybeans versus the Louisiana Gulf is primarily almost exclusively corn and soybeans. So we can shift some kind of loading points around, but the PNW becomes a really good alternative depending upon where the buyer is at. If you're going to take grain and ship it into the Asian markets like a China or Korea, Japan, or even South Asia, the PNW makes a really nice alternative. But if you're moving into let's say the European markets or into some of the African markets, the Texas Gulf is actually a better loading facility. So we may start to see as this continues on, we may start to see like we did last year some improved basis levels for corn and soybeans just after harvest. Once we know about what the volumes are and be able to reroute some of those vessels. So keep your eyes and ears open. I'll be talking about this again as the conditions develop. My last slide I also wanted to give you an idea of the relative size and the shipping rates for the different major ports we have. I just talked about Louisiana Gulf, which is really the blue line. They call it Mississippi Gulf, but it's Mississippi, Louisiana. So that would be the New Orleans loading facilities. So the dark blue line, the solid line is where we're at right now. The dotted line is the three year average. When we look at that kind of goldish yellow line, that would be for the Pacific Northwest. Again, the solid line is where we're at right now versus the dotted line is where we have been in the last three year average. And then the light blue is the Texas Gulf. So that'd be the Galveston Houston ports. And you can see the relative size of those. But you can also notice that for all of the ports, we're a little bit behind what we would normally see this time of year. And part of that is, again, our soybean shipments and that we don't have kind of that surge of export demand for soybeans. But if you don't notice what we saw this time last year, again, we had. So if you go back into this time period here in this early October frame, we were at a kind of a similar point where we were a little bit behind and we suddenly saw a surge, but not only a surge of exports to the Mississippi Gulf or Louisiana Gulf, but also then through the PNW. And so, I mean, if history repeats itself, we have some similar conditions. I guess I would anticipate that we'd have something like that happen again. So again, keep your eyes and ears open. I'd be happy to try and answer any questions. But for right now, I'm going to stop my presentation here and I will turn things over to Tim Petrie. Good afternoon, everybody. Tim Petrie here again with you, extension livestock marketing economist. Just going to talk a little bit about the fall cap situation. Our big runs in the North Dakota have not started yet. There are some other states to the south where they're getting more, but particular West River, we had adequate forage conditions and so on. I realized right in the north, but anyway, not many cattle coming. The USDA does report a three markets when the runs hit here in North Dakota. That's that Napoleon, Mandan and Dickinson. And last week only reported Mandan and Dickinson. But they'll start pretty soon now reporting all three markets. And so there are some trends already showing up that I would like to talk to you about that influences marketing and some of our education is going to be in the future. Start off with that purple circle there in the middle of the chart. That's for 550 to six weight steers. And you see at those two markets there were only 79 head. So very few and pretty soon there will be hundreds there. But if you look at a trend I want to talk about, as usual, heifers are discounted quite severely this time of the year. And Brian and I are going to be on a backgrounding webinar here in a few weeks. The date hasn't been set and he'll be talking more about budgets. And we'll be talking about this, but from a backgrounding standpoint, again, heifers are, I'm assuming we're going to keep back a lot of heifers like we always do from a backgrounding situation. And, you know, a good, you know, a good double thing we can do there is even keep them longer, make replacement heifers out of them or whatever. But anyway, discounted $30 there. You go down to the bottom, the purple there, those 925 heifers are only discounted $5 compared to their steer counterpart. So that really helps on a backgrounding situation when you're, you know, gaining. And I'll talk a little bit about steer backgrounding in a minute. But look forward to that webinar that we're going to present. It'll be in the news media and so on. The other thing is, of course, you know, on my charts that I show you, I just do the average, I'll show you the 550 to 6 steer cap in a minute to average to 85 there again in the middle. But again, there's a range in prices already to 80 to 291. And I think for sure that is going to widen out as, you know, we get more and more cattle and some are weaned and no shots and all the things that affect the market. The other thing I want to comment on is down to the lower left, a little bit that green circle there. As you see that the fleshy cattle are being discounted quite severely. They're on 775 weight steers. The average there are 255 and the fleshy is down to 225. So keep that in mind in your backgrounding program. Again, I know you want them to gain weight and do well. And that's very good. But just don't get them too fleshy because it's a double whammy. You're paying for the expensive feed. And at the same time, getting a discount. Move along. Then here are the 550 to 6 weight cap prices and again, doing much better $78 or so higher than last year. And, you know, kind of the question is what are our expectations now for the rest of the fall. And so the big things that affect cap prices, foreign prices and frame talked about some of that. And I'll just mention it a little bit in a minute. The availability of wheat grazing is another factor comes into play. Corn belt buyers, when they're harvesting corn, like they are now or will be, they are not in the market. Those corn belt buyers pay up. They like our high quality calves up here. And they just outbid the corporate feedlot buyers down in Nebraska and so on. So that helps spark the market. And then as more and more calves become wean, then they bring higher value too. So usually in the middle of October, that arrow down there, the last three years on this chart, again, the green is 2020, purple 2021, 2022 is blue and the red is this year. And that'll be all my cattle carts here that I show you that then we do pick up. And so, you know, the heavy run hasn't started yet. So I think we are going to see some continued weakness here the next couple of weeks, several weeks until we get more of an idea of what wheat grazing will be and get the corn belt buyers and the wean calves in and so on. But still we're supported at a much higher level than last year. And so that is good news there. So looking, you know, like I mentioned, some of those things that affect the market, here's Omaha corn prices on top. I like to use Omaha because that's, you know, where the feedlots are that buy our cattle. Keep in mind that adage on the top there, change corn, can't sense the bushel, change fall calf prices of buck in the opposite direction. So certainly a corn $7 last year and under five this year is supportive to calf prices. One of the reasons why they're as high as they are and of course a four straight years of beef cow herd liquidation. And we have lower calf crops as well. But corn started the year at seven now down at 482. Another thing I want to mention on corn, it's kind of small, but there's an ethanol plant up above there where it says number two, yellow corn in the blue line. That was their bid for corn today, October delivery for a central North Dakota ethanol plant at 434. Compared to that, the corn prices down in Omaha, which are 50 cents higher. That's why we background a lot of cattle up here because feed is cheaper, corn is cheaper. And they want to buy the 800 pounders, not those lightweight calves. So we background them up here and again, more on that in a minute and even more on it when we do our backgrounding webinar on the bottom. So that's corn prices have been supported to calf prices. On the other hand, we go down to winter wheat and the winter wheat prospects are not real good right now. That purple circle air shows where the winter wheat, major winter wheat pasture would be that they go to and it is dry, half the winter wheat is in dry but so we're hopeful to get some rains down there so they can get that winter wheat up and then that would help spark the calf market later on as well. So here's the heavier weight yearling prices. Again, the same trend in prices and you know, $70, $75 higher than last year but the seasonal peak, you see that down below is always right in September and so we've likely seen the seasonal peak again for these 750 to 800 pounders but you see the futures market there for October and November is supported there and so you know at around $252 or whatever on the futures market. Speaking of the futures market, I've been getting quite a few questions about why on September 15th did the funds, everybody's blaming the funds bailing out of the cattle market and so that's what caused the price to go down and yes, the funds were along the cattle market a long time and they did do us some profit taking there but there are very fundamental reasons why the market went down using October feeder cattle here and then comparing that to the CME cash index. The CME cash index is what the futures market is settled at in this case on October 26th as the last Thursday of the month when the October contract will close all open contracts then will be closed at the cash settlement price more on what that cash settlement index price is in a minute, I'll show you exactly how it's computed but just go back to September 15th there September 15th futures were 265 the cash market was 253 so the futures had a $12 premium to the cash market and they got to be the same on October 26th so that was one of the reasons they went down another reason is that corn has had a little moderate uptick here since September the low on September 15th went up 25 to 30 cents and so those are fundamental reasons why the market went down then in fact you see the futures market even got below the cash market mainly because of the war there that Frane just mentioned and the idea there that you know fed cattle the meat prices could be affected in fed cattle so but there up yesterday were virtually identical there the futures that you know they're a little over 250 and the cash settlement price there at $149.70 they're right together now now the October futures are up today closed at $252 up a little higher and so you'll see that but you know there's a good reason why futures as of now rally back up to 265 as long as that cash market is down there right around the $250 area and so a little bit more on that what that people ask me what is that CME how do they do that how does the CME come up with that price well it is a very transparent thing it's on the CME website every day the website is showing up there and I just pulled the one from last Thursday to compare to this Thursday those are the markets reported by USDA and what the CME does is just take all the markets reported by USDA market reporters on that given day total up all the seven weight to 899 weight medium and large frame number one and two steers that are sold and it's a weighted average at all those markets you see Dickinson was reported last Thursday I suppose I think maybe Napoleon is reported today so both of them will show up next Thursday but anyway they just total up all the cattle sold and there are weight you know in that weight category of 7 to 899 a price at each market on the right hand side and at the bottom they have a daily price which last Thursday was 246.18 but the actual cash settlement price is a 7 day average and so then the average of 7 days and it was 250.41 so it's transparent you can just go there and see that and I guarantee you that on October 26 the October futures and this cash settlement price will be within 50 cents or less of each other the other important thing about the CME Feeder Cattle Index is that's the price that USDA RME uses to close out all over 600 to 600 to a thousand pound feeder cattle contracts that's that one price there so that's very important for LRP contracts so more on that in a minute again we're going to do in our background webinar that we have Brian is going to do a lot more budgeting we do have a budget on our website and I just for information purpose of the day to talk a little bit more about LRP I just brought one up this isn't the one on the website because you can change it and everybody's costs are different but I just you know took a 550 steer up to 800 pounds 300 dollars in which is kind of a little bit higher than the market but I want to be you know somewhat conservative here in 250 out which is a little conservative too because you know March futures are above that right now up there and so anyway I'm not going to go through all these numbers just get to the bottom line so I can move along here with those factors and again this might not be anybody's but it's you have to put your own numbers in there but it came out with a 238 43 break even and about $92 their potential profit so you know there's always risk even though the price is up in the in the trend and prices are up there's always risk when you're backgrounding put the highest price feeder cattle into a backgrounding program this fall that you have ever done before prices are a record high over 2014 prices so there's always risk just look at the war happening and other things that might happen so you know I still think that it possibly you should look at price risk management so here's what was available for livestock risk protection insurance up until 830 this morning so again the most important thing here is just what's circled in green there so on the left circling green is the coverage price that was offered up until 830 this morning this would be for you know backgrounded steers six up to a thousand pounds so USD offered 253 69 you know right to the left of that is the expected ending value of 255 56 how did USDA get that we'll just go down to the bottom yesterday March feeder cattle closed at 255 87 and so that's that's where they got their expected ending value but important to you then is what does it cost you so the producer premium there is $6 and you know over $6 626 so you multiply that by 800 pound steer and you know that's you know no small change there and and so about a $50 bill when you just hair over $50 so if you go back up here and take off your profits on the bottom there in 92 58 you take $50 off of that for risk protection you know it does affect that bottom line again whether you do price risk protection or not is up to you and you're between the lender and the producer and how much risk exposure you haven't and so on but one thing kind of that I like to do is go back and look at that break even price of 238 and then compare that to the prices that are offered and the cost and so you can see you know I had to go down there and split there's a whole bunch of prices offered $2 lower and all the way down to from 253 down to 235 but that break in the line there is again these are for calves coming out in March that would you know this would mature on March 6 and the new one out this afternoon will be one day later but you know with that with that to with that break even price there you can come down there and say that one right under that white break in line there at 239 that's still above your break even by a dollar bring your premium down to $2 again this is all between the lender and the producer and how much risk exposure having how much you want but then that lowers your your premium to about 1850 so that still preserves $75 profit back here on your budget so just something to think about not that I'm advocating LRP over futures market options or anything else but just giving you some alternatives because I know many people just think maybe that I need the highest price there so that's the best chance of me getting paid but again you don't buy insurance hoping you're going to collect let the market go up this is just the floor price and we don't buy insurance hoping we're going to collect so just kind of another way to use LRP with that I'm going to quit stop sharing and turn it over to Dave right thanks Tim now I just have a few comments short comments about some pretty important stuff let me get my show started here us going back so yeah what I want to talk to you guys about today is the state of California that mandates the reporting of greenhouse gas emissions for many large companies doing business in the state and so specifically getting to some of the details of course there's much more this bill that was just signed into law by Governor Newsom mandates all public and private companies with revenues of more than a billion dollars anywhere that do business in California must report their greenhouse gas emissions and there is a large set of accounting standards around this space that most of us in this space are familiar with they have to align with with those accounting standards those greenhouse emissions accounting standards and they have some specific details in terms of what type of data they want that for the state of North Dakota and for agriculture we're really interested in the scope three scopes one and two are either direct emissions by the company or the emissions from energy they purchase so for example power or heat for their facilities but scope three includes their entire supply chain both up and downstream and this is really important for North Dakota egg because this would include all of the food companies larger food companies that do business in California that purchase North Dakota crops or livestock and then end up in those supply chains lengthy description of what has to happen one of the things that is included the company itself can prepare the report but it must have a third party verify what's in the report and provide a certain level of assurance that everything is correct and again depending on that level of assurance this is to me really quite important for North Dakota we were expecting requirement from the Securities and Exchange Commission just for public companies sometime in the coming years and of course California just went ahead and passed the law important to know California is not the country but they're a very large market and I think it would be difficult for many companies to lose that market or they're willing to bear those costs of providing this information to maintain their presence in that California market as I mentioned before we produce a lot of food crops feed livestock that are going to end up being scope 3 for these companies and so essentially data that reflects what we're doing in North Dakota on the farm is going to end up in those reports one of the nice things is is that there is they're going to slowly move into this if you saw on the previous slide they're not actually going to require any scope 3 emissions data until 2027 and they actually want 2026 data but reported in 2027 but you only have to meet the limited assurance level which basically said I don't think there's anything wrong with this report which is which is a relatively low standard as opposed to you know this all looks right subtle but really important but this kind of comes back to what is this eventually going to mean for North Dakota egg in the near term you know most of these companies and again we can just envision ourselves at general mills or bushes beans and report this data what they can do at least in the near term is simply report industry average emissions so they can say that we buy X many bushels or tons of barley the industry wide emissions are X and that's good enough kind of right so that will meet the needs at least in the short term with the state of California I'd imagine that they're going to ask for more detailed information over time but it was really important to farmers and that the associations are affiliated with these crop associations you know to do good industry average numbers exist most crops in North America have had what's called the life cycle assessment I've spoken about that before done to estimate that carbon footprint but sometimes it was done by academics and sometimes the academics information was not as accurate in tune as what it should be in often cases it's at a date so that's one concern also of interest is if they're not balanced correctly right so do the national numbers of these industry wide numbers really reflect North Dakota numbers or your farms numbers and this case would be really important because if your farm happens to have a smaller carbon footprint today you're not going to get credit for it but in the future you might going along with additional reporting and those are all really important because we haven't gotten to this yet but California looks like they'll be the first state to really require this and within just a few years we are going to see folks pushing down through the supply chain. I've talked with a few processors and they have already gotten requests for information about their facility which in turn would require some sort of information from the farmers they buy from so this is very much top of the list for a lot of folks in food and ingredient business right now some really quick notes just kind of echoing what Fran had said about the war in Israel and Palestine it really has not caused any significant price movements I looked at WTI just before I flipped over and we're basically back to where we were a week ago the conflict started on Saturday we're within 50 cents of the WTI price the North American oil price right now but that could change quickly and of course if we're looking at energy and this would touch bioenergy there's a huge, there's a number of touch points between the conflict and oil production, oil production and energy including bioenergy in the United States basically you know some of the bigger players the top 10 of oil production in the United States Russia, Saudi Arabia and Iran are either indirectly related or on the verge of becoming directly related in this situation some sort of explosion in terms of the war expanding in scope or directly impacting oil flows or anything like that and we could see prices change really quickly I'm surprised but happy to see to date that hasn't been the issue finally just following up I'd add this as Brian had mentioned we do have our outlook for egg lenders it's a really good program, we get more in depth coverage of a lot of topics you'll actually get less coverage of California greenhouse gas emissions because there's a bunch of stuff going on in biofuels but if you look on the right of your screen there's the topics we provide or cover during that date a lot of time for discussion also networking for other attendees and you can see the dates on the left basically we do a loop beginning in Grand Forks on Monday and then make it back to Fargo on Thursday for additional information at the link I can put it in the chat or send it to you if you'd like to see it right now you'd have to do same-day registration but we'd be happy to see any of you join us and I believe that's the last of our prepared slides we'll be meeting next month but the floor is open for questions if there are no questions we want to thank all of you for joining us today the presenters for presenting and again we'll see you back on November 9th tomorrow is Friday the 13th in October bye