 I'd like to welcome everybody to this month's agricultural market situation outlook webinar, which is continuing on now in 2022. We have a series of presentations as usual with questions saved for the end. We actually do have a special guest this month who has a little information and request for you. And so we'll start with that. So Professor Cheryl Wachenheim, the floor is yours. Well, excellent. Thank you so much. So I appreciate a couple of minutes today to introduce a short survey. Let me turn this other one off. So my name is Cheryl Wachenheim, and I don't have a camera on this computer, but I'm as beautiful, much more beautiful than my picture as well. So what I want to talk to you, I want to solicit your participation in a survey that essentially tries to figure out what farmers, ranchers, and service providers, as many of you are, what they prefer happen to data that is sent to ag tech and management providers, the data generated from precision agricultural operations. Once it's set up, sent up, what happens to the data? And we know there's detailed privacy policies and data license agreements and so on. And we're not always really familiar with them. But we want to know what what farmer, ranchers and service providers think those contracts should look like. And the question is why? And other than it being super interesting, interesting to know, it'll help us develop educational materials and as well as input towards contracts standardization. And it'll help facilitate identification of service providers that are providing data management contracts that appeal to farmer, ranchers and service providers as well. So there's already a movement in the lot of ag organizations are involved in called the ag data transparent. And their objective is provide certification for handle firms that handle the data like we'd like. So if you could go to the next slide, there's a, well, actually, I'll stick here. There's the survey code. If you could just go there, it take about 10 minutes. But it's a fun survey. I think you'd enjoy it a lot. So if you go to the next page real quick. All right. So one thing that this survey makes it a little bit unique is it has what they call a choice experiment in it. And essentially, you answer regular questions as you would in any survey. And then the second half is designed to ascertain what what people value in a contract. And we're essentially looking at four attributes. And one attributes is whether or not the farmer is getting paid to provide that data. However, the service provider is using. The second is what happens to the data once the data goes up to the service provider. For example, can the company that has the data that's managing the data and providing you that service share that data with others. And the third is whether you retain ownership of that data. In other words, if a farmer changes service providers or stops using a service provider, does that data go with them? Or is it retained by the service provider? And then, of course, ease of use is essentially how the data is moved from the machinery of equipment to the service provider. So we essentially ask you to look at two contracts and they differ by those four attributes. And doing that a series of time will provide us a lot of data, a lot of valuable data about what people value. So that's a lot of words. But essentially, I'd love it if you took a survey. And I think it'd be it'd be a lot of considerable value to the industry. And I'm working on this project with Eric Hansen. So my email wasn't the initial part, but you can also get it from the fellows. If you have any questions, if you don't have any, if you have any questions right now, please ask. Otherwise, feel free to email me. That's all I got. Great. Thanks, Cheryl. And if it's okay with you, I'll send the URL to all the attendees today. That'd be great. So I really appreciate it. And I hope you all enjoy your day. Thank you. Moving now on to the regular part of the program. Dr. Brian Parman talking about fertilizer prices. Thank you, Dave. So this has been being covered quite a bit, a lot of information in the in the newspapers and trade journals and everything else that have come out. I spent, I did several presentations on this exact topic over the last couple of weeks and spent several minutes doing a podcast yesterday on fertilizer prices. So my first slide shows the DTN tract price of nitrogen based fertilizers, which is in dollars per pound of N. Okay. And so obviously something like anhydrous ammonia has more pounds of N in it per ton than a product like 28 or 32. So those those products nominally will be cheaper than anhydrous, but anhydrous still is is is the the cheapest price per pound of nitrogen. And what you see from the chart, and this one was from last week, week ending last week is that for the most part, most of these fertilizer products, the nitrogen products have have essentially doubled in price, price per pound. And for instance, anhydrous around this time last year was about 30 cents per pound. And now it's a little bit north of 90 cents. Urea, the product that was predominantly used in North Dakota, was around 40 cents a pound of N this time last year. And now it's it's it's more than double that it's around a dollar and 28 and 32 have increased about the same amount as well. So my next slide shows potash prices and in potash, obviously an important nutrient that we apply quite a bit. And it if you look at this chart here, the way to read it, that dotted line at the bottom, that's the the five year average. The purple line is 2020. The green line is 2021. You can see all through 2021, the the price of potash pretty much does a straight shot trend upwards. And it was around right around $375 a ton or so to start the year approaching $400 a ton by this time last year that that'd be early February. And now it's it's over $800 a ton. One thing to note about potash, though, is it's it's leveled off some over the last month. It's kind of the first month that it's had that where it wasn't wasn't increasing week over week. It seemed like every every day or every other day, you'd go check the prices and they would be higher and and potash prices, at least for the over the course of the last month have have leveled off. My next slide shows your phosphorus prices, the the two major phosphorus products that are put on map and DAP. And they're up over 80% from where they were about a year ago. You got map at about $920 a ton nationally and DAP closer to 880 nationally. And those two products for the most part have have leveled off as well. You can see the red line up in the upper left corner. That's the that's the month of January for this year, and the data that we have for this year. And so it's it's leveled off compared to a year ago, which in this chart reads like the last couple where you've got that five year average, which is the gray dotted line. And it was the green line is 2021 for both products, pretty much just steady march upward for for the entire year of last year, and basically leveled off. And so, you know, we I'm not saying that they're not going to we're not going to go back and look at the end of this week and see that they've moved upwards. But it so far there there's been a kind of a mute they they've muted the upward upward marcher prices of these two products as well as potash. Then my next slide shows urea prices, that being the predominant nitrogen product applied here in North Dakota, and it it too has leveled off now it's leveled off again at a very high number $920 a ton, which is more than double of what it what it was this time last year. But but there again, we haven't moved up at all since the since the start of the year, which is kind of the first time since September, October that that's been true, that it hasn't increased in price dramatically. But one thing that remains to be seen when fertilizer starts being applied heavily here in the next month or so, where you were the where the the delta area and across, you know, the south starts getting into the fields and starts applying these products as planning season kicks off for them in late February early March. And then as the as the as it starts getting warmer and planning season begins in earnest for places like Kansas and Nebraska and Iowa and and and and onward. Typically that's when we see fertilizer prices in a normal year increase, where they're the the lowest that they'll typically be in the fall, and then increasing as we move into spring planning and demand really picks up. But this is not a typical year. So I'm pretty reluctant to predict that we're going to see the same increase in fertilizer prices, considering how high they already are. There's a lot of other factors at play that could could impact it. My impression has been, though, that we're not going to see much of a movement down until after planning season is over. So probably right now, as I see it, our best case scenario is is that they do not march upwards anymore. And we just kind of move sideways through the planning season at the prices that we're at right now. Now, my next slide shows one final fertilizer product, 1034. And it's also up as well. A lot of nitrogen, not a little bit of nitrogen in this in this product. But what you see there is starting this year or last year, around $470 a ton, and now closer to $820 a ton. And it's it's it's way over the the five-year average as well. And one last thing I wanted to mention, I've been looking at chemical prices for a lot of these products as well, or the herbicides and pesticides that are typically applied. And kind of that's one thing that it's been talked about, but it hasn't been talked about as much. And a couple of things I have note, and I don't have a slide on it, was about this time last year, Glufosinate products, like Liberty or the generics, they were around $70 a gallon around this time last year. Glufosinate now about $122 a gallon for name brand, and about $116 a gallon for generic. So up quite a bit. Glufosates way up $19, $20 a gallon around this time last year. Some areas are seeing it as high as $74 a gallon right now. So a big increase in Glufosate, and then products like 240 good old 240 selling for 36 bucks a gallon right now. That product's obviously been around for nearly 100 years now. So it's not just fertilizer prices, it's herbicides and pesticides. And I know Ron Haugen, who worked hard to get our crop budgets put together, is going to do a presentation on those and talk about overall production costs and how they're impacted this year. But that's something to think about. And Franal might hit on it as well. This year is absolutely a year where soil testing is important. There's no real way to know how much residual fertilizer is left after the drought that we dealt with last year, since we in a lot of areas didn't get the yields and didn't get the rain. So a lot of that fertilizer is still sitting in the ground or a good bit of it. How much is impossible really to know unless you go out and do soil testing. And soil testing will probably pay for itself this year. That's the first thing. And the second thing is it's going to be awfully tough if we spend what we're going to have to spend to make a crop this year. And we don't protect ourselves with the ability to use the market to hedge this year. And so that's kind of the story that we're all telling. And so I believe a question popped up, but I think we're going to do those to the end. Yes, I guess there was a comment real quick. You re-quote locally this week or down to 750 to $780 a ton range. Well, that's good. And these were national numbers. That's one thing that's important. And Hydrus was really peaking. There were reports of $1,600 a ton. And then you'd look in a place like Iowa and it'd be $1,350, $1,400 a ton, especially if it was kind of really near a plant. So yes, you're right. They can be down. And that actually brings up a really good point. And one of the things that a lot of our co-ops and other areas were afraid of is if they're out there buying, let's say, Urea for $800, $850 a ton and then all the sudden prices come down to $750 a ton. How much do they have on hand and are they left holding the bag with high price fertilizer? It's a dangerous situation financially for some, especially the smaller cooperatives and stuff. So as high as fertilizer prices were to end last week, they've been volatile. And I'm not surprised at all if the local quotes are down to $750 a ton right now. It's very possible considering how high they were. And it doesn't take a huge percentage change to come down $100 when you're starting at $1,000 or $950. So that's a great comment. And on supply issues for fertilizer in the spring, I guess I'll go ahead and hit that real quick. Yes, I think that there probably will be, if not for any other reason, then there may be some folks who are reluctant to price fertilizer when the price was high and cooperatives are not going to buy a bunch of high price fertilizer and have it sitting there on hand because of fears that the price could fall. And if that if something like that happens, again, that could absolutely cause a financial, a real big financial hardship for those cooperatives. So there may be some logistical issues and supply issues with these entities, the agrochemical dealers having it on hand. So I am worried about that. That's absolutely true. But thank you, everyone. And if there are any further questions, I'll try to answer them at the end. And I'd like to turn it over to Dr. Olson. Thank you. All right. Thank you, Brian. So I'm Frank Olson. I'm the crop economist and marketing specialist with NDSU Extension. Here's my contact information. So again, as we finish things up, if you do have some questions that come up later, feel free to contact me. I'll do my best to try and answer them. So the other thing I want to mention as I start, I'm actually speaking in my not today. I'm broadcasting for my not right now. I'll be joining a conference here in town shortly. So I'm going to be giving my talk and hopefully we'll have a couple minutes for Q&A. And then I'm going to have to drop off the call to be able to get ready for my next presentation. So just you're aware, think of some questions now as I'm going through my discussion. So on my first slide, I wanted to give you an update on kind of the summary of the information we got from the WASDE report yesterday. So the WASDE is the World Agricultural Supply Demand Estimates. USDA updates that information once a month. So on the very top highlighted in blue is the average industry estimate for what they were expecting USDA to come out with. So that was the numbers that the average industry analyst was looking for to come out of the report yesterday. Now this is for ending stocks. So this would be again, just a summary of both the supply and the demand areas. So how much grain are we going to have in reserve just before harvest of 2022? The bottom row highlighted in red is the numbers that actually were reported in the WASDE. And then the highlighted black number just above that is the number that was reported last month. So just to remind everybody, the markets already had have anticipated some changes. So the critical thing for when the report is released is not necessarily what was the number from last month, but more importantly, what is the number the trade is expecting to see. So what we really need to do is compare the blue row with the red row. So when you compare on wheat, the ending stocks and wheat was a little bit higher than what the trade was expecting. Actually, they were looking at very small changes. USDA did drop both domestic consumption and exports a slight amount. So there was kind of two small adjustments there on the corn side basically left untouched from last year, last month's estimate. So corning and ending stocks did not change. The trade was expecting a little bit of an increase or uptick in ethanol consumption, but that didn't appear in this month's report. On the soybean column, they were expecting to have a slight cutback in the ending stocks, basically an increase in demand. USDA did increase the amount of soybeans going into the crushing sector, a small amount. That's where that's where the change came in. I think most analysts were expecting a slight adjustment in the exports number, which did not come. So relatively small adjustments, small changes, no big shock value to it. The February report is typically not one of those big shock value kinds of reports that we get. On the next slide is a summary of USDA's forecast for South American production. We're going to look both at corn and soybeans in both Argentina and Brazil. And really these were the numbers that I think everybody was anticipating to see what would happen from USDA's perspective on total production numbers. We know that there's been some drought in Argentina that's been going on most of the season. We know that there has been some pretty severe drought conditions in southern Brazil. However, northern Brazil has had some very good weather and yields coming off of the northern harvested soybeans have been very, very strong so far. But soybean harvest is now getting into the central and southern part of Brazil. And we're getting some better information from harvest reports that, yeah, that crop isn't nearly as big as what we had expected. So once again, comparing the top row highlighted in blue with the bottom row highlighted in red, again, small adjustments and not major changes. We were not expecting big shifts, but we got kind of what the trade was expecting. Now on the next slide, I want to compare not only US soybean production to Brazilian soybean production, but also talk a little bit about the differences between what the private forecasts are saying for yields coming out of Brazil versus how USDA makes those calculations. So the very top row, this last year in the US, we had a record soybean crop. This is reported in million metric ton, which is kind of what we use in the international trade sector. So just for reference point, our US record soybean production was about 121 million metric ton. If you look at the highlighted black line in Brazil last year, Brazil produced 138 million metric ton. That was their total crop size. That was a new record. Now, when we were finishing up our harvest and they're planting soybeans down in Brazil, most of the private forecasters for production and yields were looking at an increase in output between 140 to 145. So that was kind of the mentality as we were finishing our harvest here in the US, and they were planting soybeans in Brazil. Now the current USDA forecast, as you saw earlier, was 134 million metric ton. Most of the current private forecasters, when they look at what are their own estimates, are saying anywhere between 125 and 130, which is again, a bit lower than what USDA is forecasting. And this morning, actually late yesterday, Conab, which is kind of Brazil's version of USDA, came out with an updated forecast. This is kind of the official government forecast of about 125.5 million metric ton. So why is the USDA forecast a little bit higher? It's when USDA does their forecasting, they're looking at current cropping conditions or getting as much harvest information as they can. But what they're assuming and they're modeling and they're forecasting for final numbers is that the weather is averaged from this time forward. So the assumption is that whatever their benchmark, the date that they do their forecast on, the assumption is the weather will be returned to normal or returned to average for the rest of the growing season. Well, obviously, if you're in the middle of a drought, a lot of the private forecasters are assuming that those drought conditions will continue and may even worsen. So that's one of the reasons we see this difference in the two numbers. And then also when Conab came out, the Brazilian version of USDA, they also dropped their forecast for total corn production. So these two reasons are as part of the driving force kind of updraft we have now in both the corn and the soybean markets over the last several weeks, actually. The other thing that there was been over the last about a week to 10 days, almost two weeks now, because of these lower forecasted numbers, we've seen some Chinese buying return into the US market. So China is now returning to the US market and buying some soybeans not only from old crop for immediate delivery, but also for new crop. And so this is kind of an unusual time for the Chinese to come in and start buying US soybeans. Normally they're buying almost all of their product out of the Brazilian market. So this too is also giving psychologically some boost to both corn and soybean prices. So on my next slide, I'd want to also talk a little bit about what's happening between Russia and Ukraine and the potential impact on wheat. Now, we don't have time to go into a lot of detail, but I do want to give you a quick geography lesson. So what I've tried to do here is zoom in on the key export facilities in both Russia and the Ukraine. So the blue stars are the major grain exporting terminals out of Russia. Notice that there's the Sea of Azov and then they have the Black Sea. So they've got a couple ports right along the Black Sea and then one up in the Sea of Azov. So the blue stars are Russian export facilities for grain. The red stars are Ukrainian export facilities. And then that black star down on the very bottom in that peninsula of Crimea is one of the large Russian naval bases. And so you can see that with the political tensions as well as some of the military tensions growing between the Russian Ukrainians that this has a very high likelihood that we're going to spill over into potential grain movements as well. So on the next slide, this was actually a quote that came out this morning. This is from Reuters News that came out early this morning. And I'll just read it really quickly. Ukraine criticized Russian naval exercises near its southern coast on Thursday, saying the presence of warships are part of the hybrid war that had been that made navigation in the Black Sea and Azov Sea virtually impossible. So because of these these military drills, the military actions that are going on again, Russia has announced they're going to have these drills for keeping their soldiers at high levels. It's now spilling over or potentially spilling over into some of the grain shipments coming out of your crane in particular. So the second quote directly from that report was that Moscow is staging these naval drills in the Black Sea this month. And at the same time it holds the ground drills. Again, we've been listening to that on the news between in Belarus, which is just north of the Ukraine. Part of the Shoah force for the West says could be precursor to an invasion which Moscow denies. So again, these political issues are starting to escalate. It does have a significant possibility or potential to be able to restrict the flow of not only wheat because Russia is the largest wheat exporter and Ukraine is the third largest wheat exporter in the global markets right now, but also potentially restrict grain corn exports because Ukraine is the fourth largest corn exporter. So this is all now starting to be built into the marketplace. Some of these uncertainties are starting to also provide a bit of an updraft in particular in the corn market. My next slide is just I'm going to zoom back out a little bit to give you another perspective of what's going on on the right hand side is Russia and the left hand side would be Ukraine. I put a little if you notice a little red bar on the very bottom. There's a canal that runs through the middle of Istanbul. It's a large city in Turkey. That canal is really the only way that vessels ocean vessels can get between the Black Sea and the Mediterranean Sea. So again, another potential choke point from a military standpoint is to try and just block off that canal which then would restrict not only grain shipments but also potentially crude oil shipments and and LNG or liquefied natural gas shipments. So again, these tensions growing can have spillover effects in a lot of other industries and a lot of other markets. So my last slide, kind of a question I've been getting more recently is, so will this impact U.S. winter wheat? So the classes of wheat, the type of wheat that Ukraine and Russia export, it would be classified as a hard red winter wheat in our system. So will this have an impact on U.S. hard red winter wheat prices? Will that cause an updraft in the wheat market thus allowing spring wheat to go higher as well? And the question is really unclear. I think it's going to take a pretty large disruption for U.S. hard red winter wheat prices to really be impacted in a dramatic way. And this is a price chart. This is a price forward chart. So this would be like your local elevator putting bids for delivery in the future. So if they're going to buy grain from you several months into the future, what are their current bids and prices? So what I did was I gathered the information for the prices loaded on for wheat loaded onto an ocean vessel and then the freight rates, the ocean freight from that particular port to North Asia. So think about like Japan or South Korea, potentially China. So just to give you an idea of what the different bids are and the different prices. So if you're in North Asia, like a Japanese buyer, you're saying, well, if I want to buy hard red winter wheat off the global market, what kind of prices might I be looking at at different period delivery periods? So this is from March of 2022, all the way through November of 2022. The brown line on the very bottom is Ukrainian 11.5 protein wheat. The red line is Russia 11.5 protein wheat. Of course, their ports are very close to each other. So the prices are going to be very similar. Now the US Gulf, about 11% protein wheat is the green line on top. So right now, one of the challenges we're having in the wheat market is because corn prices are so high, US wheat prices have to be even higher to be able to prevent the wheat from going into the feed supplies. So right now, today in the global market, our hard red winter wheat is priced kind of at a high level relative to some other major suppliers, like Argentina and Australia and of course the Black Sea. So if the exports get cut off from the Black Sea region, Ukraine and Russia, if they kind of have to back away from the marketplace for a while, global wheat prices will increase. The question is will they increase enough to make US hard red winter wheat competitive in the global markets? I do think we'll see a pretty substantial increase, but it may not directly translate into a lot of additional US hard red winter wheat exports. So I just want everybody to be cautious. I do think we'll pick up some additional sales, but it may not be the larger volumes that I think some people are hoping for or counting on. So with that, I'll take a short pause. If there's any questions, I'll try and answer them now and then I'll let Tim get set up for his portion of the discussion. Frank, I'll ask a quick question maybe a little bit early, but your thoughts about plantings. I'm wondering about how many soybean acres are going to get planted this year relative to corn. Yeah, and again, when you look at, and we got to separate kind of old crop pricing from new crop pricing, when you look at what's happening in the new crop markets right now, again, a very nice heavy lift, an updraft is what I call it, an increase in November soybean futures, which then is also causing some increase in the December corn futures. So I do think it nationally, we need to have about the same kind of balance between corn and soybean acres as we did last year. We can see a little bit of a shifting, a slight reduction in corn, a slight increase in soybeans, but we can't let soybeans get too out of balance relative to corn because we still have some very strong demand base for corn. Now, so far wheat has been kind of lagging behind. It hasn't been caught up in this competition or bidding for acres quite yet, but I do think in particular for hard red spring wheat, because it's spring planted, that will join the mix here pretty shortly. So if you're looking at spring wheat pricing, I do think we'll see some lifting, some improvement in spring wheat futures markets as we get closer to spring planting to be a bit more competitive with some of the other crops. So in the corn belt, I don't expect to see big shifts between corn and soybeans, but the shifting for acres or the bidding for acres kind of this acreage battle is really up here in the northern plains in North Dakota, South Dakota, Minnesota, because we grow all of these other smaller market crops that can suddenly make the acreage shift more important. So a long winded answer to a relatively short question. Good afternoon, Tim Petra here, Extension Livestock Marketing Economist. If we go to my first slide, USDA NASS in the last month has issued the three annual inventory reports for cattle sheep and hogs. So I'm just going to summarize those in a quick review of they all showed lower numbers, which obviously is supportive to prices. So first of all, let's go to the beef cow side of it in the cattle and I don't have time, you know, I could spend an hour just on the entire cattle report. We're just going to do beef cows because that's what gives us beef production on the top is January 1 beef cows. And then for the commodities, I'm going to say how North Dakota might compare because we differed in many respects in the commodity. So on the cattle, beef cattle side up there, you see in the upper chart to the right hand side, we beef cow numbers as expected declined again, about 2.3%. And again, right now, drought monitor came out this morning, but half the beef cow herd is an area of drought. And so that's why we thought numbers would go down. It's the third straight year of declining beef cow numbers cyclically. And usually we do decline in a cycle, a liquidation phase is usually four years. So our expectation probably in some others on that too, but as dry as it is. And we'll see in a little while some other things that we may, you know, prices are high enough now that would probably stimulate some increase in numbers. But it looks like there is a good chance that they will go down again. But anyway, that's positive for prices. Our calf crop is going to be lower this year. And so again, supportive to prices. North Dakota then, similar in the last couple of years, we did buck the trend numbers actually declined there in 2019. And 20 and then 21. And it's up in the US, but only the last two years in North Dakota. We did fall off 2% again this year. And that was expected with the drought that we're experiencing. And not quite as much as the US, but with similar. So a decline there as well. So we'll have fewer calves in North Dakota. So if we go to the next slide, just on the top then is the January 1 beef cow replacement heifers saved. And so you see, we're down there again, about a little over 3%, 3.3% to start January. So that's maybe funnels into again, that we'll take the beef cow herd down a little bit for the fourth straight years. And again, weather is going to be the big factor there. Again, half the beef cow herd in and drought. We kind of buck the trend some here in North Dakota on replacement heifers. We've been keeping a lot of replacement heifers in North Dakota. You see those. We did go down about 4% on replacement heifers here in North Dakota over last year. But still, on a historic basis, we have a lot, we've been saving a lot of replacement heifers in North Dakota. It's been a good enterprise for people. And we have the highest quality heifers in the U.S. and they're in high demand. And heifers are extremely discounted in the fall. And even now, the lighter weight heifers $30 a hundred weight and so on. So we background them, keep them in the spring, then they can go to a feedlot. And actually, you see, we started off this year now, the eighth all-time high, number eighth place in replacement heifers. And last year, we were in sixth place all the way back to 1920. In fact, five out of the last six years have been in the top 10 for number of replacement heifers held. And so, but those six, that number sixth place that we had at the beginning last year, again, a lot of those that weren't, that hadn't been bred, these are replacement heifers that are really two crops. It's the replacement heifers that haven't calved, that are going to start calving here sooner, calve after January 1st anyway. And it's also the heifer calves save back that were designated as replacement heifers. But again, last year, some of those went to feedlots. And so, when we go to the next slide, I'm just going to, I'm sure I've been having meetings all over the state here since the report came out on January 31st. And the question that I always get is, why didn't beef cows go down more than that? And if you've been listening to my webinars all last summer, I said, yeah, we're going to have a lower numbers in North Dakota, but you know, people were saying there's going to be 30% down, 40% down or whatever. And I disagreed with that. I said we might be down from two to four percent would be my guess. And, and I'm going to show you why that I use that estimate and why beef cow numbers were just down 2%. Cattle producers, beef cow producers in the Northern Plains in particular, but probably all over the US are very resilient and do whatever's necessary to maintain herds and, and, and, and fine feed and, and do all sorts of things. And so I, the top chart there, that purple line admonitizes our state climatologist and the drought monitor first came out in 2000. So he's, he's got a formula for the intensity of drought. And, you know, since the drought monitor started in 2000. And so those numbers way on the top then show the drought intensity and how bad the drought was. And of course, our drought this past year in 2021 was the worst drought since 2000. But if we, but then right in the middle, you see those numbers there and you see some purple circles there. That is the percentage change in the beef cow herd, the January 1st after the drought occurred. And those numbers then the, the, the, the, the absolute numbers are on the chart below that you've seen before of the change in numbers, but I'm looking at percent. So if we go back and look at the second worst drought, which was back in 2006, January 1st of 2007, we had the same amount of, of, of cows go back to towards the right hand side. You see the third worst drought back in 2017. We actually had 1% more beef cows than we had even though it was a drought. Then go back to the left hand side. Yeah, the fourth drought there in 2008, we did go down a 3.2%. Probably the changes in beef cow numbers are more because of prices relative rather than drought is what this bears out. But anyway, we had more there. It also might be a result that we had very dry in 2006, right in the middle of 2007, it did get better, but then got worse right away and then dry in 2008. So, you know, we had almost 2.5 years there and that funneled into it. And then we go to the fifth worst drought there in 2012, we actually had 7% more beef cows. So that's, you know, where I was getting my prediction that, that we were not going to be down major double ditch categories like people expected. Now, on the other hand, let's go to the right hand side of the chart and, you know, drought conditions persist. There's no snow in West River. It's dry. Our pastures are beat down and we're going to need a lot of rain. So certainly we hope it rains in, in the southeastern, south central part of North Dakota. It did get some refreshing last fall, but we're going to need rain. And if that doesn't happen, we are going to have more liquidation than we had this year, but we certainly hope it rains. So move along then to the next slide and just show you how lower numbers then are impacting prices on the top. Then there's our 800 pound yearlings. I usually do show you this. And you see that red line there starting at the, at the left hand side of the chart is higher than the last three years by quite a bit. And then those red squares are the futures market closes today. And you see the futures market is expecting a continual increase from the 165 average last week, you know, up to near 180 by May. And then in the fall up there close just under 191.88 or so. And then that gold square then is the January 2023 futures are showing even higher prices because of those lower calf crops we expect. And then on the bottom are the lighter weight 550 to six weight calves. And the same thing there, you know, last a couple of several years, last three years, we average about 170 at this time. And last week we averaged 195 and expectations like those feeder cattle futures show them. And we're up there 190 to 200 by this fall quite a bit better. So those are, you know, we've got good demand for beef on the fed cattle site. So fed cattle prices are higher in futures and then our lower supply. So moving to the next slide, then we'll just talk a little bit about sheep. The US number of breeding use has been pretty constant at about three million head for a number of years, but did fall off 1.7 this year, two thirds of our since most of our sheep are in Western US and the entire Western US now is dry. U numbers did go down 1.7% all due to drought with the prices that sheep or the lambs are now, we would have expected them to maybe the numbers to go up a little bit, but the drought limited that. Then North Dakota on the bottom, again, we kind of bucked the trend there. We had no, even in spite of our drought, we had no change in breeding U numbers this year over last year. And then, you know, we've seen a resurgence in increasing U numbers the previous two years and that we were up pretty strong there in 2019 to 20. And then 14% and then another 5% a year ago and then leveled off. So anyway, the US of lamb crop is going to be down a little and so go to the next slide is supporting prices and we have, you know, a very good demand for lamb and lower numbers. So there's the purple line then is the average of 2016 to 20. But again, last year, after we got the pandemic, some of it behind us and restaurants started open up again. And so on, we brought lamb prices up and they're already, you know, they're 235 on fed lambs versus about 175 a year ago. So a lot better lamb prices there and our expectation to continue and then the same on the feeder lambs below. So let's go on to the next and talk a little bit about hogs. The inventory on the cattle and sheep was as of January 1. But the USDA does it a month earlier on hogs. So this is of December 1. So the year is 2021. But actually it'd be the start of 2022 numbers. So you see there are breeding herd did fall off in 2020. You see in a minute with prices 2020 was just a terrible year for hog prices because of the pandemic. And we do reduce our herd down and it's the breeding herd is still kind of historically low now on on December 1. So down in the bottom chart, you see on December 1, we had fewer market hogs in the year before. That's going back to those December 2020 hog sows that we had the year before up in the top chart. And we've got the same number. So we'll be down there on market hogs again. So go to while you're going to the next chart, I will mention again that North Dakota did buck the trend. And actually we have 6% more market hogs on December 1 in North Dakota when the US was down about 4%. So we're going to have more hogs to sell at higher prices, which is good news for North Dakota. So the top chart is base slaughter hog prices at the packing plants. You see the purple line there in the bottom again $50 carcass weed hogs in 2020 is what caused us to cut back on sows. Then last year the blue line we saw a significant increase in prices up to mid-year up to $112. And then the seasonal pattern for hogs is for them to go up into July and then down into the fall. And so now we're starting off above last year up there about $83 now compared to 70 last year. And the red diamonds there are what the futures market today is saying back up by July up to $114 there in July, $110 and so on in August and in there in July and so pretty much following last year except a little bit higher. And of course then on the bottom that causes feeder pig prices to be in demand too. We've got fewer of them and they're looking at those $114 slaughter hog prices in July that these feeder pigs finish out on. So like I said all the sectors look very positive in prices with the lower numbers and also the strong demand. So with that this wrap up and say you know a reminder that Valentine's Day is coming up here in case you forgot on Monday so keep that on your calendar and you know a good present might be steak or pork chops or lamb chops and with that then let's go to is it Ron or Dave next? It's me Tim. Yeah, good afternoon Ron Hogan with farm management. There's my contact information. So I'm going to talk a little bit about the NDSU crop budgets that we just released. So the first slide basically just says I wrote a news article the other day and that's the headline in NDSU projects crop profits. And so these were very frustrating this year with a big run up in the input costs and the volatility and the commodity prices. And we try to make these budgets for what we think it's going to be the average for the year. It's not necessarily what things are right today. It's our best guess and it got to be a lot of guessing. These budgets do vary quite a bit by crop and by region and always remember these are a guide. It's just something that a farmer can fill in his own numbers because every situation is different. And one thing to remember too that these are estimates of return to labor and management with no consideration to the risk. So next I want to show you the budget map. We break the state down into four or nine regions and basically there's cropping systems that are unique for those various regions. They do things certain ways. As I've done these crop budgets over the years things are getting a little more homogeneous and maybe at some point we could maybe just have five regions instead of nine but at this point this is what we're doing. So the next slide I want to talk about some generalizations. I won't show you any numbers. The budgets are on the web now. Generally for most all regions there's been an improved profit from the previous year. When I first started these working on these I thought man everything's going to be negative with the high fertilizer prices and the high chemical prices. But it actually didn't turn out too bad. On a negative note of course we know all about the increases in fertilizer prices and then certain chemicals. All chemicals are up but especially some like Roundup and Liberty. But this is what was a surprise to me. Well not a surprise I should have known. I checked with Eggwice and Northwood and they do all the they do a very good job of keeping track of the soil nutrient levels throughout the state. And they're basically double from last year because of the drought. The crop didn't take the nutrients out like a normal year. Now you may have your farm may have had some rain showers and you may have had a good crop during the drought. So as Brian mentioned earlier soil tests are just a must this year. But you could actually see quite a bit on the fertilizer bill. And I put the regional nutrient test for each region. So that helped a lot on the fertilizer cost per acre. The next slide I'm going to talk about the cost. As I mentioned fertilizer cost have had the most increase of all the costs. And even with if even when you factor in applying a less rate because of the higher nutrients it's still the highest cost. Crops like corn and wheat too big fertilizer users they were the hardest hit as far as the cost. And also crops that also you know pesticide costs have increased and also crops that have a lot of pesticide use usage they really showed a significant increase in costs. Everything seemed to be up seed was up for most crops fuel of course we know that's up we see that at the pump repairs and ownerships they that always seems to go up every year. Land rants you know we don't have much hard data on that. And so the data we have shows things fairly flat. We don't get our next land rent survey till April so so at this point we kind of kept them flat. The yields then on the next slide that the yields then that we that we used are based on an average of seven-year moving average. And then of course we got our commodity prices from from Frane and he has he's done his best to try to figure out a price for the for the year and with all that everything seemed to be very positive. I wanted to note that we do a lot of different crops in these budgets a lot of specialty crops and some of them look like they have a very good return and you really don't want to plant the whole crop to a whole the whole farm to a specialty crop you're taking a very high risk. A lot of them have contracts and and and and reduction it and and limitations on on what they'll pay is it with the yield so make sure and use these as a guide. Here is the next slide shows the link to get to the crop budgets and the next slide i'm going to talk about crop compare that is another tool that kind of goes along with these budgets we use our budget numbers and this is available online too. We only use the direct costs and it's kind of a way of of changing prices and comparing comparing costs among among the crops if you're we we can grow a myriad of different crops in North Dakota so if you want to try different crops you can you can pick a reference crop and and then it will actually kind of show you the differences. The next slide I want to make sure that that you understand that this is for checking scenarios until you actually make your final planting decision you you look at break even prices. We're assuming that that kind of an assumption that the fixed costs are static for example you could probably be grow wheat and barley with the same equipment but if you had some crop that you don't have the proper equipment you need to adjust your cost for that so it doesn't account for that. The last slide then shows you the the link to get to the crop compare program on our on our website so with that I will turn it over to Dave. All right thanks Ron yeah I'll I'll share those links in an email following today's webinar. I just have some really quick comments about a recently announced funding from USDA and the reason I want to talk about it is not so much that the funding is there but rather taking it as a signal of what might be coming from USDA and federal farm policy in the next farm bill in upcoming years and so anyways on Monday there was an announcement that was somewhat expected regarding monies available for what they're calling climate smart commodities and this is really part of the push it's been around for you know over a year with a new administration for climate smart agriculture and again this is really just broadly speaking about ways that we can manage greenhouse gas emissions in agriculture and forestry. What they decided to do at USDA is take a billion dollars with monies from the CCC. I remember when a billion dollars was a lot of money I think it maybe still is to some extent but that's what they they've set aside with this and again these are things that you know the administration can do without acts of congress similar to what the last administration did to help offset losses from the trade war but anyways there's two pools of money available and there's actually a really quick turnaround for both of these so with the first pool they're looking for large-scale projects from five to a hundred million dollars those proposals are due in less than two months and then there's a the second pool which is due later at the end of May it's for smaller projects from 250,000 to just under five million dollars so these are obviously quite large projects or could be quite large projects going forward. Anyways you know they're looking for a couple of things this is where I think it's kind of important you know they're looking for pilot projects that help us identify how we can best manage greenhouse gas flows looking at the costs and the benefits you know how to best conduct these practices and again to me I think this might be a signal of the practices that would be approved likely by the federal government for funding and so it's it's kind of laying that foundation first there's this signal that hey we can use CCC to to to find funding and second we're looking specifically at practices that might be good for the environment or good for climate with the actual activities that would be funded here's a laundry list of some of the projects they're looking at I remove the most of those which we're focusing primarily on forestry most of these aren't surprising if you're if you're familiar with what's been done recently in this space but it might again be kind of a signal of where future farm programs might be providing monies to farmers to producers for for new practices so cover crops strip till no till uh nutrient management and the like and you can just see that that full battery of bliss these these aren't anything new but again it could be you know that that some of these all of these would end up being different options for farmers to practice you know beginning in 2024 and and forward with some sort of financial assistance from the federal government again they're really kind of looking at a couple things one is the practice themselves then also how do you monitor and verify these things and finally how do you build a market in each one of these legs are really important to kind of what's going on with these emerging carbon markets and so you can see that this is supportive of things that have been happening in many respects largely in the voluntary markets the carbon offset markets and not federal programs to date but they really align closely with what is evolving or kind of coming together on that private side and so this is to support those private activities to some extent but then also possibly to provide that foundation for future activity that the federal government might be supporting so I do think it's important for everybody in agriculture to take note of this again the the administration found you know a billion dollars out of ccc even though it's you know it's a it's a driven by the administration itself most of these aims are broadly supported in agriculture across both parties and geographically to in in general so I think it is important for us that to keep wind of this to see how this goes also in a in a few months to see which types of projects are selected to see what folks are thinking about how climate smart commodities climate smart agriculture might look both in terms of federal programs and then in terms of what we end up doing in the country to to take advantage or to help support these climate issues that we're facing so that was the official end of the the the remarks that we had prepared we do have some time for questions I believe we might have some already we'd ask you using the q&a tool but the chat tool works as well we'll go through those questions as as we have time as long as they keep coming we'll be we'll be happy to answer them as I mentioned I will send a url for for professor walkenheim survey as well as the urls for the crop budget and crop compare that that ron just talked about so with that I think we can open up the questions if anybody wants to grab some that are up there I see one I see there's a question about the sugar be do we do a sugar beet budget no we do not we have not done that for many many years it was kind of hard to for us to get the information that we wanted and it's kind of and we just decided we're not going to do it we don't do potatoes either I guess and it was just we got enough to do and and it was just tougher to get the data yeah a lot of a lot of the potato especially potatoes potatoes they go they're contracted and it's kind of like private information sometimes so and I think it was the same question on both yeah yep I did anybody else have any other questions or comments or thoughts that came up when others were speaking you know one question I have is you know with this these changes in fertilizer prices what might you know the implications behind how you know how long lived are these high prices going to be is it you know just for this this crop year this marketing year and then also too you know are we going to see shifts in practices you know and and Brian already spoke about you know testing being really important you know more testing but then also even shifts of different fertilizers and shifts of crops you know depending on profitability although Ron like you said you know even though a lot of these input prices are high there's there's these are still profitable most of them are still expected to be profitable but as I don't see any other questions to make best use of everybody's time I want to thank everybody for joining us and the panelists for for presenting today our next webinar will be in four weeks on March 10th at the same URL if you've been registered you're registered for the rest of the year I will try and send a reminder out beforehand to get it get that reminder out to you and of course you can see this recording of this webinar as well as past webinars the slide deck and past slide decks on the URL on the screen usually that takes a couple of days just to get everything edited and up but it will be there shortly and as I mentioned I'll send out the links for the other resources we talked about today and with that I hope you guys all have a great weekend and as Tim mentioned a happy enjoyable Valentine's Day thanks