 Welcome everybody. This is the April edition of the agricultural markets situation and outlook webinar. Thank you for joining us this afternoon. We've got again a full slate of discussion and presentations. Dr. Parman does have some conflicts later on during the session so he will let him go first. And we will pause for just a little bit to see if you have any questions specifically for Brian. And then if we can save the rest of the Q&A to the very end that would probably work the easiest and best for everybody. So again we'll do our best to try and answer the questions as they come up. And with that I will stop sharing and I will let Dr. Parman take over. Alright so today I have two parts to a presentation. First I'm going to talk about the latest and greatest inflation numbers that just came out. That's kind of forefront on everyone's mind and what's going on in the macro economy. And then our recent publication came out yesterday on cropland values across the state. I know there's a lot of interest in what those are based on the trust land surveys. So I'm going to cover that real quick. And then again I have to get off. I have some other obligations I got to deal with here soon shortly after this. So I'll take your questions right after I'm done presenting and then I'll have to leave. So let's go ahead and get started. So here are the latest and greatest inflation numbers that came out very recently. And inflation was up again. It was 7.9% for the year that would have ended February 2022. Year ending March 2022 it's increased to 8.5% for all items. All items less food and energy slightly lower than that. That's what they call core inflation. But energy energy prices remain high and food prices have actually ticked up inflation on that food and shelter items have increased driving that inflation number up that came out today 8.5% was the was the total. So this chart I use is from the Federal Reserve. It's the yearly inflation rate. And so 2021 some of those numbers still haven't been finalized yet and obviously 2022 is the year we're in. But I just put a line and a dot to show where 8.5% inflation is on a historical time scale. And you can see you got to go back to about 1981 to see inflation anywhere close to 8.5%. It's not the highest on record 8.5%. That would have occurred just very beginning of 1981 or so approaching about 13%. But it is very high on a historical time scale. I mean there's only a few years where it was actually higher. And the BLS presents these the last 10 years the monthly inflation rate. And so this is not annualized. This is actually how much in prices increased or decreased in the last month. And the highlighted ones that I show for last year 2021. So if you look at this row 2021 you'll see these were the highest in or as high or higher than any other month in the last 10 years that are highlighted in yellow. Well 2022 is the bottom row and I have them bolded in one of the things you'll notice 2021's inflation rate. So this is for calendar year 2021 not the year ending March or anything like that was 7%. And so it's increased since then and if you look at 2022 each month the inflation rate is actually double what it was starting out last year calendar year 2021. So six tenths of a percent in January as opposed to three, oops, skipped myself ahead, eight tenths of a percent as opposed to four tenths in February. And then 1.2% in March which is the highest of any month in this whole entire pretty much table. And that's double what it was in March of 2021 when it was six tenths of a percent. So if that continues, we're kind of effectively looking at the potential for if it stays on this trajectory, double the inflation rate of 7% we saw in 2021. So that remains to be seen three months is not enough really to say where things are going to shake out this year but it is starting out much higher than 2022 starting out much higher than 2021 did essentially double. So that's prompting the Fed to probably act and act more aggressively as these numbers come in and I show this chart. So the top chart shows the likelihood that the Federal Reserve will choose these two effective interest or federal funds rate. And before these this eight and a half percent number came out. So a few weeks ago, it was about 31% thought that they only increase it a quarter of a point and about almost 70% said, you know, between a pretty much a half a point increase. Well, after this number came out of change, it went from now 91% are saying that that half point of increase is going to occur next month. And the longer range forecast haven't changed that much. But it's looking like folks are starting the markets are starting to bake in these these higher rate more potentially more frequent and larger jumps in interest rates come in the coming months and quarters. So that's one of the reasons you'll see these job numbers you'll see job numbers come out in there and they're pretty decent or pretty strong. And the market drops. Well, why does that happen because they're saying that well if the job numbers are strong and inflation stay in high, then that's going to that's going to encourage the Fed to act even more aggressively than they would have in the past and hiking interest rates faster. So that's what you're seeing there. But one thing to keep in mind any action that the Federal Reserve takes in the next few months or so is unlikely to be felt for for quite a long time. And inflation has momentum. That's one of the things about it is that inflation tends to have momentum. And in order to halt that momentum. A lot of these rate hikes are going to have to happen and maybe have to happen more aggressively and more frequently in order to halt it just they're kind of in a wait and see on how long this persists. So on a shift gears now I'm going to go ahead and shift to land values. And so the Minneapolis Federal Reserve came out with an article where they discussed land values across our district which Federal Reserve. Minneapolis is our Federal Reserve District. And across the the district they had projected that cropland values non irrigated increased by about 22%. And cash rents for non irrigated cropland increased by about 12% across the district so that was a district right thing that'd be Minnesota, North Dakota, Montana, South Dakota, mainly that those those states. And then a survey came out earlier this year from the North Dakota American Society of farm managers and rural appraisers chapter saying the cropland in North Dakota had wrote risen 28%. And of course, the Red River Valley was the most pricey approaching about almost 5500 bucks then then you have the southeast and the and the northeast. North Central so statewide in their estimate cropland prices increased 28% for 2022 heading into 2022. This chart is what we the article that was just put out using the trust lands data. And what we do at North Dakota State is we put all these counties the county level stuff into our budget districts. Our NDSU extension budget districts. So those are the districts that you see there. And then those values going back from 2016 to 2022. And one of the things that we do that's a bit different than you may see in other surveys is we wait the prices. So for instance, if you have a parcel of land, let's say that's 40 acres, and it sells for $9000 an acre. And then you've got five sections, or, you know, let's say one section, an entire field that sells for, say, $3500 an acre. Some people would just take that that 40 acres and then that and then that section or whatever quarter, and, and then just take the average of the two so it would be divided by two well what we do is we waited by the number of acres. In other words, so if a much larger field sells for less than a much smaller field, that much larger fields going to have a lot more weight in impacting the average than the smaller field does because it's just not very many acres. So that's one of the reasons that we wind up coming up with a lot of times different averages than other surveys is because we actually waited by the number of acres sold. Okay, so, so that's that's one part of it and then the other part is some of the data sources but we found statewide about an 11% increase in land values statewide which was lower than the district and significantly lower than the FMRA estimate of nearly 28%. But there were and I have a chart here at the end that shows each region's increase or movement in percentage wise, and there were some districts that were much higher than this 11% and some a bit lower, but pretty much across the board, significant jumps in land prices across with the most expensive farmland being the Red River Valley at $4,500 an acre, followed by the Southeast $3,400, and then the North Valley at $3,400 as well. So that's this is kind of how it looks, and you can go on and find the article. It was it was released in a news released if you want to read more analysis about it. And then, and I kind of suspected that this would be the case. Rents were up across the state, but a lot more modestly 3.1%, as opposed to that nearly 11% increase that land values actually took cropland values. In fact, there were some areas that we found even a tiny decrease percentage wise, for instance, the Northwest went down from about $35 an acre to 3460. That could be a little bit of data noise. I don't think that necessarily they actually came down, but what we can probably say from that is they really didn't move. And then the same true here in the East Central, pretty much the exact same value it's been rental rate wise the same amount that it's been for the last several years. So probably we saw some movement there in the South Valley, but otherwise other areas may and then maybe they're in the Northeast, but not a lot of movement rinse wise. This is that chart I was talking about that I said I would show at the end, showing the rental rate for each NDSU extension budgetary region, and then the land value and then the percent change of rent versus value. I said cash rents, I mean the highest movement that we found and again some of that could be noise was nothing exceeded a rental increase of 5% everything 4.99 is the highest and two regions achieved that one at 4.94. Let's see almost two or three, two just over 3% one at 2.85. And then we'll call the Northwest almost no change down slightly and then the East Central virtually no change, almost zero. And then the values wise few areas around that 1112% mark the Southeast made a significant jump at 22%, but then the other areas six and a half 5% there for the South Central and the South Valley at 6.7%. So a lot more modest gains in rental rates as opposed to land values and you see that there and this one of the things that's significant is you know this is the first double digit increase that North Dakota has seen in land values. In, in, in, you know, since you have to go back to like 2014 2013 to have seen increases anywhere near that high in land values with respect to rents we don't actually have to go back that far, just back to three or four years to have seen a rental change of 3.1%. In fact, you know they've been kind of up 3% maybe down a few percent and that some of that could be data noise but what that tells me for the most part is rents have been holding steady. And at least so far up here to be maybe inching upward but but very similar to to what we saw last year values on the other hand. You know that's that's you get to an increase of 1112% like we saw it to be just over 10% almost 11. It's you're going to have a hard time saying that that was noise or anything else there's definitely an increase that's occurred, whether it's as high as the ASF MRA survey said at 28% or closer to the 11% that we thought. Based on these surveys, it's hard to say but I will say as I mentioned before these are weighted. And so the waiting factor can have have a significant impact on the actual overall increase because it's the number of acres are accounted for when we do our calculations. So again, in summary on that land values across the state are up in every single district up significantly almost 11% for the statewide average and rents up slightly more modestly at that 3.1% mark and it's not something we haven't seen before in the surveys within the last three or four years coming up that much. And just some comments on it. I'm not actually surprised because when it comes to land values you know that's an investment. That's a long range long or should be at least a long term planning kind of a decision where maybe it was paid you know somebody overpaid or they feel like they overpaid or based on the amount of revenue it's generating. It doesn't quite make financial sense but you get the advantage of equity build up the potential for big capital gains in the future. And so the years can go by in that land purchase even if on the after the first year it doesn't look at great I mean you the 10 years from now depending on what inflation does and everything else. It may actually look pretty reasonable and somebody's in good shape or as it comes to cash rents we got to cash flow that decision every single year and with what production costs have done this spring and the end of last winter. You know folks are looking at those high fertilizer prices those high cost of equipment the high diesel costs everything else landlords are well aware of it and rental rates are a lot more reluctant to move upwards because of a lot of what we're dealing with there and production costs. So that's really what I wanted to cover and again if you want a more in depth analysis right up on it. Crop land values the news release was out yesterday. The other thing is on next month's newsletter I'm going to dive a lot more in depth into what we're what the land value numbers are actually telling us or what we've seen and maybe some more speculation and forecasting as far as that goes. So if you have anything for Brian right now please feel free to type it into either the chat or the Q&A function on the bottom. We'll give it just a minute or two to show people a chance to type things in. And I'll just do some after commentary on it you know I just kind of what I expected to see to be to be honest that there would be a significant movement upwards in based on what I've been hearing and what I've been seeing in other areas that have gotten their surveys done that we would see a significant movement in land prices that they would go up for the first time in a while. And I would argue that they've actually been going down because they've been trending sideways for the last seven years. Pretty much zero movement and if you adjust for inflation in real dollar terms land values effectively had been going down because if you hold even and you have any inflation then they're going down. So this is really the first real increase since I've been doing the surveys. And then as far as rents goes I'm not surprised that we saw the pop and land values and then not real not really any movement much at all you know rental rates. That's kind of what I thought would happen because of the scenario that we found ourselves in with high production costs despite strong corn prices despite strong wheat prices despite strong soybean prices. It's a bitter pill to swallow to if you're a tenant to say well yeah let's let's increase rent 10% but I'm also paying a thousand bucks a ton for fertilizer and I'm on an 18 month wait list for a new piece of machinery and diesel prices are five bucks. So again and frame and I've had this conversations many many times that a land purchase is an investment decision a cash rental contract is a cash flow decision. And they can be very different outcomes that you reach because in one year. Yeah the land purchase maybe didn't help you and you went backwards but you can make that up in the future you can't on a cash rental negotiation. All right so we did we did have one question come in any thoughts and the recent purchase recent prices of $12,500 per acre up north or $3,000 $9,300 plus in the Southwest and cast of Castleton investors or farmers buying at these high prices. I am not familiar with those transactions that's that that you're speaking of there. Nobody's brought them to my attention. If I had to guess at those prices. Hate to that probably strikes me as as an investor making that purchase and not a farmer in the region unless the only the only thing that would make me believe that that's a farmer buying it is if there is some special circumstance as to why that. Person paid that for instance in in Iowa you might have a hog production facility way overpay in terms of market prices for a parcel right next to that hog confinement facility because they need a place to dump their manure. And even though they know they're paying more than. Then what they should they go ahead and pay it anyway because it's close and they're really not buying it to necessarily produce and make a lot of money raising corn and beans they just need a place to dump their manure. And at any cost they don't want to haul it all the way across the state or something like that so. And I have an anecdote of our own family's farm where we overpaid for some pasture land because it was right in between two section pastures we already owned we've been running it 30 years. The family decided to sell it we overpaid by 100 bucks an acre because it was more more to us in our operation than it was anybody else. It's kind of a utility thing that we we would we would get more value out of it so we could pay more. The only other answer for this so it was a farmer purchase purchasing it that could be the reason the only other thing is it probably it could be an investor as well. Who's just looking for a place to store some money as a hedge against inflation and diversification of some kind of a portfolio. So Brian yes Brian there was some comments in the chat that the that they were both farmer purchases so they were both farmer purchases. Yeah it was a farmer in Castleton and in another comment both farmer purchasing were very large farmers. Yeah I could see it I mean and if they have the if they have the funds and here's the other thing coming out of 2021 and I'm going to be publishing the FBM stuff. Shortly on the state averages a lot of farmers made solid money in 2021. I mean the best in in almost a decade. So there are some producers out there that are very flush with cash right now. And so it very well could have been farmer purchased by by some of those individuals all I can say though is that the averages are telling me that those prices are right now anomalies. And not the the the norm for what decent productivity index ground is selling for. We've got we've got examples like that that you hear about from from places like Indiana and Iowa where you hear about $22,000 an acre or $20,000 an acre. That's still it's still well above the average. So I guess that's my only comment with it unless unless I could speak to the individuals and find out I can't it's hard to say. So there was another comment just and then we'll try and move on the castle to land was very high quality 92 productivity index. So it sounds like there's some pretty good pretty good ground. All right so for the sake of time and to make sure that we get a get a chance for everybody to participate. I will move on I guess into my section so make sure we get through everything. All right. Thank you everyone. All right. Thanks. All right. So I'm assuming that everybody can see my material I will start moving on so my name is Frank Olson I'm the crop economist marketing specialist with NDSU extension. Here's my contact information if you do have some questions you know feel free to reach out and and I'll do my best to try and answer them. So I'm going to try and give a quick quick review and update on not only the April USDA was your report which came out last Friday but also make a couple comments on the perspective plantings report we got at the end of March and then end on a few comments about what's happening currently in Russia and Ukraine. So just to give everybody some again reference points. This is a table I've showed before. This shows the pre report industry estimates so there's usually a survey taken of private analysts and forecasters on what they expect the numbers for USDA to be published during the WASD report. So the blue line on top shows the average trade estimate there's about 25 to 28 analysts that go into this pool. What they're looking at is what what is their best estimate or forecast for the projected ending stocks how much grain are we going to have left in the bin just before harvest. So these are for the old crop numbers this is for the crop that's currently in the bin and again this would be for the full marketing year. So the blue line on top would be the average trade estimate this is what the trade was expecting to see and then on the very bottom in highlighted in red is the actual number that we got. So when we look at ending stocks for all wheat corn and soybeans again the numbers came in very very close to what the trade is expecting again. Typically this April report doesn't have a lot of shock value in it. You know again we were looking for potentially some adjustments because of the war between Ukraine and Russia. I do think USDA will will continue to include and incorporate some of that information but they're not going to do it all in one report. They're going to be a bit cautious in trying to make adjustments or reporting. Now I also want to comment about the May report so the first part of May we're going to have another update for the WASDE the World Agricultural Supply Demand Estimates. The May report is going to be more significant because the May report is the first month that USDA starts making formal projections in the WASDE for the new crop the 2022-23 marketing year. So that will be that will be watched very closely and again we'll have some more information and updates as they become available. So just keep your eyes and ears open for the May report because that will be a market mover more than likely because of some of the information contained in it. So this is the old crop numbers. We also did get an update on the projected production coming out of South America. So once again the blue row on very top was it just the average trade estimate is what the private analysts were expecting to see out of the report. If you look drop down to the very bottom highlighted in red would be the numbers that we actually received and once again if you start comparing for both Argentina and Brazil you look at both corn and soybean production. The private estimates came in very very close to what the USDA was actually forecasting so again not a lot of shock value involved in this. We are starting to zero in on some of the numbers for in particular for Brazil but also for Argentina. Soybean harvest in Brazil is pretty much completed. The corn harvest is basically completed completed for the first crop corn second crop corn which is the sofrina crop is being planted right now. So the corn the forecast for total corn production that USDA puts out is for both crops. So we beat for both the first crop and the second crop because it's within the marketing year that USDA uses for for us corn. On the Argentine side again corn corn and soybean harvest in Argentina is almost complete. But we still they still do have some acres to clean up so again our estimates the forecast for total bushels produced or in this case metric tons produced is starting to zero one and some some pretty common numbers. So again not a tremendous amount of shock value. We've known kind of had a pretty good inkling of that these numbers were coming out not any major surprises. Shifting gears a little bit I do want to talk about the perspective plantings report kind of the same general format the Bloomberg or Reuters in Bloomberg as well as as Dow Jones usually do surveys of the analysts. On what they expect to see so the blue lines on the very top was what the traders were expecting to see for planted acreage in the March 31 planting intent or planting perspectives report. So as you look across relative to what we had actually planted in 2021 last year we were expecting to see a decrease in corn plantings and an increase in soybean plantings. Which we did get but that shift that swing was a little bit bigger than what we had expected so there was a more of a reduction in corn acres. More of an increase in soybean acres and we expected thus the reason we saw some of the big price movements especially in corn after the report. Now one of the comments I want to make for not only corn soybeans but also when we look at the spring wheat number as well as the Durham number. The survey for the perspective plantings report was taking about the first two weeks of March. So we were aware of Russia invading Ukraine and the war starting but we it hadn't been going on long enough for the market to really figure out what the potential implications of that invasion and how long this war may last. And so obviously we're learning more every day about the situation and about the kind of the ripple effects or the implications not only for agriculture but for energy. So I do expect as we move through but we get another survey based report in June so the June plantings report will get an update on what these acres were. I do expect to see I guess my opinion probably a little bit more of a rebalancing between corn and soybeans. I think the market is trying to signal farmers to say don't switch quite as many acres into corn as we had originally expected. The other question then is what about spring wheat given now some snowfall and some moisture especially in central western North Dakota as well as much higher spring wheat prices. Are we going to see some small adjustments are shifting in North Dakota to try and bring back some of those spring wheat acres into production. Again we're going to have to wait to see I do expect to see a little bit of a rebalancing. So shifting gears I just want to give you kind of an update a current update on some of the core issues in particular with Ukraine and the Russia war. I'm going to talk about Ukraine first and then shift over some issues on on on Russia. One of the things I think we need to start really thinking about previously we've always thought about Black Sea like Black Sea wheat Black Sea corn Black Sea barley or feed barley. We've lumped Ukraine and Russia together because they are so common they got very similar production practices. Their cost of productions are a little bit different but somewhat similar. Obviously they're shipping loading vessels into the Black Sea at ports they're literally within a few hundred miles of each other. So historically we have thought about Ukraine and Russia kind of as a as a as twins. But now because of the war those two are very separating pretty dramatically. So the conditions going on in Ukraine are obviously very different than the conditions going on in Russia. And I think as we move forward not only from a pricing standpoint but also from a shipping and logistics standpoint. We are now going to have to think about the Ukrainian wheat and Russian wheat as two separate types of wheat. Now the class of wheat the quality of the wheat is going to be very very similar. When we look at pricing and accessibility and the ability to be able to deliver the product on time. We're going to think about rushing Ukraine as two different kinds of markets. So let's review very quickly some of the most current information that I have anyway on what's happening in Ukraine. When we look at old crop grain shipments again the crop that was harvested last year for both corn. Malt our feed barley excuse me as well as wheat. So Ukrainian shipments have obviously slowed early on in the war. Some grain had been diverted into Moldova and Romania to be loaded onto ocean vessels. So these were purchases that are already been committed and Ukrainian companies were trying to deliver on those purchases. There is still a little bit of that happening. But most of the current shipments of grain some of the newer purchases and the ability for Ukraine to be able to ship product out of out of the country. The primary focus has really been shifting now to the rail system and in particular moving some grain products into Western Europe. Now one of the big challenges I think I've mentioned this before is that the rail gauges the width of the railroads the rails in the former Soviet Union countries is wider than the than the gauge of the rails in the rest of Western Europe. And again that was done primarily as a military and a safety precaution to prevent any kind of major troop movements by rail. So they purposely made the gauges different. But now as Ukraine struggles with how do we get product by rail across the country then into the Western Europe. They're looking at being forced to basically transload. So the Ukrainian grain hits the end of the rails they have to be offloaded and then loaded on to a different rail car or different train system to be able to move into Western Europe. Now they are starting to make make inroads into that kind of trying to get the product though smooth movement a lot smoother. But it is being somewhat complicated. Okay. And we got to understand that the other issue that I've read a little bit about is the rail cars those cars suited for a moving grain over large distances. They have green rail cars available. It's just again making sure that they're in the right place at the right time understanding that again troop movements and military movements take priority on the railroads. For new crop there's been a lot of discussion about how many acres and are actually going to get planted in Ukraine this year. And then what does that translate into production and yield potential again given the fact that it's getting very difficult to get the fertilizer and the chemical and the fuel is needed to be able to put a crop in as well as maintain the crop quality. Right now the current estimates are anywhere from a 30% to a 60% cut in production reduction in production. And those numbers do vary a little bit by crop specifically by crop again somewhat depending upon the region that the crops are growing in so we don't have a really good read yet on what the potential reduction is going to be by crop specifically. But we do have this pretty wide range where there's a recognition we're going to have lower production coming out of Ukraine. They're going to continue to have some shipping problems because of the ongoing war, but how large will those be and and and will there be able to make some work around shifting to Russia very quickly. Old crop grain movements again this would be crop that was harvested previously. They are being slow, there's slow down but they are still being able to meet the requirements so if there's been grain sales previously and there's contracts in place. The Russians are again are trying very hard to be able to fulfill those commitments. One of the things that is complicating things in particular for Russia now most of the major ports for Ukraine for loading ocean vessels. Again loaded in the black sea and then eventually transported into the Mediterranean and and off to its final destination. Most of the major loading ports in Ukraine have been closed. The the Ukrainian government closed their loading facilities when the war began and they haven't reopened so either they're rerouting it into into other countries or actually trying to move it by rail. However for Russia, their major rushing Russian loading port ports are still open. They are still active. One of the there was a recent report actually out yesterday talking about ocean shipping rates in particular for black black sea vessels and what's happening is the insurance underwriters for these ocean vessels so if I'm an ocean company. I own not only bulk shipments for for carrying grain or if I have some kind of tanker vessel for in particular for crude oil or maybe for liquefied natural gas. You know those insurance those companies take out insurance on their vessels. Well the insurance rates for ocean vessels transiting the black sea have gone up significantly. The example that was used in the in this particular article was that the cost for a one million barrel oil tanker so this would be a standard size oil tanker loaded in one of the major ports in Russia. And then transported it to Italy and unloaded the cost just for the freight the ocean freight is currently about $3.5 million that versus about $700,000 before the war began. So obviously there's a huge risk premium that's not necessarily an area that I would want to be the captain of a vessel going through a military zone. My point is bringing this up is that the cost for ocean freight at least for this particular region has gone up five fold. So this is one of the things I think Russia will continue to struggle with not only for their for the petroleum products but also for the bulk grain products. So even though Russia is able to make some additional sales, they're still trying to push some of their product into the global marketplace. There are countries that are interested in buying it. I do think some of these ocean freight rates and the fact that you're going through a war zone to be able to get your product delivered is going to put a pretty major crimp in the system for a lot of the Russian grain movement. So surprisingly, I guess maybe not so surprisingly given the higher grain prices, there have been new Russian grain sales. There are certain countries Egypt has been one of those that's come in and actually made some new purchases of wheat from Russia. Again that relationship between Russian and Egypt has been relatively strong over the last several years. Egypt relies very, very heavily on Russian grain movements especially for wheat to try and make sure that they have the wheat supplies they need in the country. So there have been some new sales but again very, very slow sales pace and again they have to be at a very, very low price to be able to meet and match the demand base. So again global wheat prices in particular have gone up pretty significantly but Russian wheat has actually stayed relatively low compared to the other prices. Now a lot of buyers that are looking for the some lower priced wheat so that are very, very price sensitive buyers have been going into the European Union to try and backfill some of their supplies. Right now most of the sales have been for French wheat which has some similar milling and baking characteristics to the hard red winter wheat coming out of Ukraine and Russia. So again part of it's a pricing thing part of its logistics piece but also part of it is a quality. The quality of French wheat is actually more similar to probably a soft red winter wheat in the United States versus a hard red winter wheat but it can still make an acceptable bread product. So we've seen an increase in French wheat sales at least most recently I would say really European sales because France, Germany and the UK are the three largest exporters of wheat with France being the largest. So people are rerouting trying to find some alternative supplies of some alternative supply chains. The challenge we have coming out of the European Union is they don't have the volumes necessary to be able to fully refill or backfill all of the sales coming out of the Black Sea. So we're still short globally on on typical or normal wheat supplies in particular but also corn supplies as well as feed barley supplies supplies because the French do sell a lot of feed barley. One might my last comment and I'll hand it over to Tim India is now also emerges emerging as a wheat exporter depending upon the year and the time period India produces a lot of wheat they don't don't always have enough for export. But because of a record large wheat crop in 2021 the last year's numbers as well as some pretty large government owned stocks, they are now starting to sell more volumes into the global market. So some of the buyers that are very price sensitive are turning to India as an alternative wheat supply but again volumes are relatively small compared to the volumes that would normally be shipped out of the Black Sea. The other thing that that is I think given the Indian government some I guess credence or ability to be able to to increase some of the export volumes is that there's also expected to be a record wheat production in 2022. So again, India has had a couple of really good years they have some extra wheat around with today's wheat prices they're saying this is an opportunity to try and get some of our wheat reserves lowered. So with that, I will stop sharing. I'll hand my, my mic and everything over to Tim Petrie and he'll go through some of the information for the livestock sector. Well, good afternoon everybody. Tim Petrie here I'm going to talk about several different livestock and mainly I want to show you what happened compared to last year. Prices are back up to 2015 levels for most livestock and I know in some cases it doesn't seem like that because costs have went up but prices are higher and then also in some cases show you the impact of the Russian Ukraine situation that and how really the big impact and has been on feed and corn prices and and how that's affected to so we'll move along here start off with fed steer prices and maybe spend a little bit more time in this chart like always do showing you the keys because all my slides are color coded the same way. And so just moving along there on the bottom in the middle of the green line. I like to put the last three years on a chart, because to give us that perspective and if it's happening in the last three years it could happen again so the green line is the purple 2020. In some cases I do a five year average so that's the purple line, or else it's 2020 then the light blue line, or the blue line there is always last year and the red line is this year. If there is a futures market, the, since we're using red for 2022, the futures for this year are the red squares and then if there are futures trading into 2023. That's the orange and a few cases and I'll tell you that when we get to it the orange. I've also used that as the futures before the Ukrainian war and then to show you that was that would have been the red ones before the war and, and just a guide to show you what has happened since then So start off with Fed Steers. Again, we're you there's with the starting on the left hand side of the chart there you see the red line. We started off significantly higher than the blue line last year to the turn tune of $30 prices continue to go up throughout all last year. And so, by now we're about $20 higher and we did back off some here recently because of the things that Brian talked about inflation and, and so on and high costs of things and so that's kind of caused the Fed cattle to kind of stall out here. But if you look at those red futures then all across there, we do have that normal seasonal pattern, where they do go down into the, in the mid summer and so you see back down to 136 there by at the end of the year. But then we, you know, we keep that $10 higher by mid summer all the way through the end of the year back up to 150 $10 higher at the end of the year, and then move to there are 2023 futures. So then we add another 10 $12 on them to begin with and that is simply based on that we've had three straight years of coward liquidation. So that's what we see there 2022 is the first year that in the last several that we will have not have record beef production, and, and even on the competing meat side in 2022 here we're expecting lower beef pork, and a lamb production. This is favorable fundamentals and supportive to prices and, and, and that's what we see there. So on the next slide then, just kind of want to show you, there's been not a lot of impact to the Ukrainian Russian situation on Fed cattle, probably a more on the macroeconomic side that Brian talked about and, and high inflation and so on. So in this case, those orange squares are what the futures were trading at on February 15 right before the war, and then those red squares are yesterday's but I just checked and the market didn't do very much at all so that would be pretty current so yeah since February 15. We've taken about six bucks off a Fed cattle futures but if you go then to the end of the year like I talked about there up there at 150. There's been really no impact of the inflationary effects or if there was anything from Ukraine where there's still identical at the end of the year but here, you know right now. You know, there's, we still have lingering effects of Colvin and, and, and high prices for meats and gas prices that that frame alluded to going up going up that's always a negative impact on on the higher proteins because you know, the person stops and goes up with gas goes into the store to buy something for the evening meal and they've just spent quite a bit more on gas than they were used to and, and so that funnels into that but you know that the key bottom line for the Fed steers and as we expect them to go up specifically for the next several years based on smaller calf crops and quite frankly we're going to very likely do another year of liquidation on cows this year given the weather 60 over 60% of the beef cow herd right now is in an area with drought and, and so that does not bode well at all for even maintaining the herd and we've had a high cow slaughter as well so that all funnels into the future of being supportive to prices. Switch now to feeder cattle and then feeder cattle of course, one of the big things that are affecting them is corn prices and frame alluded to that and you know they're at the top and this is the the black bars there are may feeder cattle futures and the green line then is just the the closes on me corn, you know my old adage that you've heard me say a lot of times, change corn 10 cents a bushel change feeder cattle, a buck in the opposite direction. And then I go back there to February 15 where that purple arrow is there, and that's right before the war. And so you see then corn was trading at 637 and a half, and, and feeder cattle were up there at 17695 feeder cattle were at life of contract and then the war head and corn went up, and so you see corn went up quite to probably to the war into into March, and then leveled off. And then like frame said there you go to the end of March they're down to look at the bottom the chart in April the planning intentions came out with fewer acres of corn. And corn spiked again, probably more so because of the planting and take attention to the war so bottom line is from February 15 to yesterday, corn went up $1.46. And so if you go back to my formula there that would mean that feeder cattle prices should be 15 or should be at $14 and 60 cents lower. So you see then, as of yesterday, then feeder cattle were very close that down $15 went from 17695 to 162, or 16195 there was the was the close yesterday and very similar that so you know we've got that why are feeder cattle prices volatile. And that's because corn is volatile and a lot of factors affecting both. So, you know, let's go a look at the different market classes there a feeder cattle here are 550 to 608 calves and again these are averages a wide range still in prices and auction markets and, and none of the auction markets reported the AMS this week even were open because of the, of the weather but this is last week's prices so you see the still much higher there we were down about 170 on an average last year and, and up to 197 or so 98 last week. So quite an increase in calf prices again fewer of them to sell this is the result now of three smaller calf crops. And so, that's very supportive to prices even though corn prices are high and, and you know one thing that's kind of keeping a lid on fire on these later weight calves right now is the dry conditions it's dry all the way from Texas right on up through here. They Texas did get some rain and we did get some snow so we'll see what happens but still, you know the drought monitor that came out this morning showing a dry but you know, we're still, there's no futures market for calves but we're still higher than last year back again to 2015 levels, and we certainly expect that to continue into the fall again October. middle of October is a tough time to sell calves as you see there in the last three years it's been the low for the year and even the previous year 2018 so the last four years and so that's likely to happen again we'll have that seasonal pattern but still the bottom line is they're higher prices, you know we can forecast that for the rest of the year unless something drastic happens there, and even cyclical higher in the next couple of years. Go to the heavyweight yearling type 800 pound stairs that we're selling now, and again the same key on the chart and kind of the same story there increased throughout last year but kind of down there in October. Here I kind of want to show you then how the corn prices and mainly the, you know the Ukraine situation at the beginning here and then of course the planning intentions funneled into that. But you know right at the 160 and last year you know but still about $10 higher than we were last year at this time, but go to the May futures that I just showed you again, we've ratcheted them down $15 our expectation were those orange bar squares up there that was what we were in February 15. And, and so, at least in the nearby we've taken 15 bucks off. However, when we go throughout the year it does narrow down to about $7 and $7 and 60 and change difference just since February 15 in the fall futures. So they're still up there about 180 compared to they were 150 in them, you know, late October there last year and then they did come back and then way on the left hand side that that's that square without filled in. That's what the actually the January and March futures are trading at 180 for next year so again kind of the same story there higher than this year. The one market class that has been helped to buy by inflation and high gas prices and that our call call prices that seasonally this time of the year they usually do go up after again reaching fall lows when we PG check and sell all those cows and so call call prices have went up even more so than they usually do on a seasonal basis and that goes in that hamburger is selling very very well, compared to the higher loin cuts and so on on beef and a big demand for hamburger and and and not getting as much in from Australia because they're in herd rebuilding. So that funnels into call prices and the other thing I just want to mention my series here is that was 85 to 90% lean cows and you see in the top and Montana and South Dakota there isn't a cow prices are not reported by USDA in North Dakota and what these 85 to 90% lean cows now their old call call broken mouth cows that have had a calf on them, all the previous year. And so they tend to be below the market producer sometimes say Tim I'm selling cows for more than that and I agree with that I've just on the right hand side and you know I've got a market report from last week and yeah this was towards the end of the bottom of the range because these are old thinner cows but you know we sold cows last week you see up in the 90s are a lot a lot of cows selling in the 80s that are fleshier and so on maybe we're younger cows with bad bags or the plastic calf or so but the cow prices and have responded nicely in spite of about 17% higher beef cow slaughter this year and last year. Again, it's very dried out in the southern plains, they're liquidating some cows or at least selling cows and some of them might have went in the fall. So this isn't a lower supplies actually got stronger supplies, but it's all demand and and demand for hamburger and and and the cheaper cuts. So let's go to the hog side. Again here the kind of the same thing I showed you before on and and hog prices again seasonally usually go up into mid summer and then go down into the fall with the with the bigger runs we have in the fall and the shorter supply of hogs in the purple line there shows the big impact on COVID and you know only $50 carcass hogs is very tough year and so producers cut back, like I said we're reducing reducing pork production this year, a really tough year and with that even that cut back funnel through to quite a bit higher prices last year and so far have been above last year by a little bit and and kind of right on the the futures the red futures are yesterday's closes saying, you know, by mid summer will have $120 hogs and and staying above last year as well. And actually, since to since February 15, the gold ones there, actually we've seen a little bit higher hog prices so no impact there from the war and again pork is a little bit cheaper than beef there and we're short to the hogs and pigs report new hogs and pigs comes out quarterly just came out at the end of March and was a lower number of hogs and the trade was expecting and no buildup of sound numbers the breeding herd and all across the board is down so lower supplies there, certainly supportive to prices, go to the lamb side, kind of similar story here my purple I know is 2016 to 20 average but lamb prices struggled in, you know, back in in in 2020 in particular but last year rebounded very nicely as restaurants, particularly white tablecloth restaurants on the east and west coast and so on came back on board and and, you know, another lamb was kind of helped by the pandemic as well because there was lamb at the meat counter when they ran out other things so people said I'll give it a try and they did and liked it and so, and we have the strong ethnic demand as well so lamb prices have been higher than last year and and, you know, we expect to lamb prices to stay fairly strong again they're going to be impacted by inflation, probably more than the other commodities because they are the highest price protein but again, particularly the holiday season right now, a good demand for lamb and with the ethnic sector and so on so good lamb prices there a feeder lamb prices compared to last year are not quite as high and that kind of just goes back down to the higher corn prices affecting them as well so just finish up here. You're all aware of avian influenza and seen reports about egg prices and so on and and so just on the upper right or upper left hand corner there, show you what's happened to wholesale egg prices in the last month, you know, in the middle of the year, you know, it's the wholesale price of eggs here in the Midwest were $1 40 and that's went up double it's twice as high up to over over 280 almost $3 and so that's funneling over into the retail level as well and so, you know, and then we have the peak demand of the year right before Easter as well for eggs and so you see on the bottom egg prices usually do spark up into April right at Easter and then fall off but the dramatic increase this year was due to avian influenza and and impacting the egg layers way more than the other industries so far, you know, I was the largest is close to us get a lot of eggs and Minnesota is big too and, and the, the central flyway snow geese have been affected and and so it's affected that so you see those higher egg prices right now we just have to live with them even this Easter and maybe some stores will kind of lost leader but you can expect to pay higher, but you know on the top there I have bad news that way and egg prices good news the other way are the end issue meat lab we just had a big research product and project and they did slaughter a lot of lambs up there and had a lot on hand to to sell and so they have an Easter special and so I got a leg of lamb for 399 again the lowest price probably for quite a few years on that so that's the good news at least for me I got a leg of lamb but we also we're going to spread it around also going to have ham for Easter and I have a son in a lot that makes a real ram ram so we're going to have a lot of variety there so with that happy Easter to everybody and turn it over to Ron and let him talk about some new USDA programs there. Okay, hopefully everybody can see that. Another ad hoc farm program to talk about we've been kind of waiting for for us to get their act together they said they were going to simplify some things and, and this is based on on the PL public law 117-4 free, and it actually targeted 750 million to assist livestock producers. Okay, more acronyms to remember, I do have a few slides here with a lot of words on there but I won't go through everything I just hit the highlights you can you can download this if you want to read all the details. But the acronym now we don't want to learn about is the ELRP emergency livestock relief program. Okay, and what this is doing about there could be producers that are already getting this, it's going to be immediately delivered. LFP was the program that producers got last year during the drought, and they actually just finished the sign up for the 2021 in January 31 of 2022. Last year nationwide there was 100,000 applications for about $670 million for the LFP program. So this new program the ELRP then is just just takes information from that from last year, and whatever you got last year, you get a payment. And it's also, we got, we've got a broken the two different phases, and this is called phase one. So last year, if you were eligible for an LFP, you will be eligible for a L, L, ELRP, and whether you're in a drought county or not, it doesn't matter whatever you got last year you're going to get some money this year. Okay, every single county was eligible last year for a payment in North Dakota. So if you applied and got a payment then you will be eligible. You do not need to submit another application. It's going to quickly be be pushed out by FSA. And last year here are the drought payments that were that we ended up with after the year was done. You can see Trail County kind of sneaked in there with five payments. And then, and then the middle of the state was the worst, they'll get bigger payments. They call it monthly payments, but it's basically bigger payments for those counties. And to be eligible, you need to have, as I mentioned, you need to have an LFP from the previous year, 90, you will get 90% of that if you are an underserved producer or beginning farmer producer or a veteran. Probably don't don't have too many of them in North Dakota, but for everybody else, they will get 75% of what they got last year. It's estimated that the USDA will be paying out 577 million for this program right now. As you remember, these are the, based on the drought monitor, these are the triggers that trigger the payments for the LFP program. And I'll get to more of that in a little bit. This is just for your own information. If you wanted to download that. The current stats as of April 4 from last year, there was 11,000 applications of LFP, paying out 82 million for the state. Now, just tomorrow now, April 15, the new grazing season will start. So the new 2022 LFP program will start right now. The current drought monitor, there's five counties that have hit D3. Billings divide Golden Valley, McKinsey and Williams. And if you hit D3 at any point in time, you are automatically going to qualify for free payments. So tomorrow, people could actually apply for those three payments, three monthly payments. There is a phase two for this program. We really don't know what it's about yet. They're just going to kind of get more information, see how, if the drought develops and kind of go from there, kind of a flexible fluid plan. We've been getting a lot of calls on this. When is this assistance for crop producers going to come out? And we still really don't know. But what we did find out was that it's going to be two phases again. The first phase will likely be attached to crop insurance. We don't know if it's going to be, whether it's based on the crop insurance proceeds you've gotten. But if you had crop insurance or NAP, you probably will, they're probably going to push out some initial payments fairly quick. And as before, the phase two will be kind of based on conditions that develop. There is, I wanted to mention, another program called ELAP for livestock producers. And this is for people that they will get benefits based on their eligible losses last year for feed hauling compensation. And it will not, it will not be, it will not, not only be retroactive for last year, but it will be in effect for this year and subsequent years. So with that information, I just thought I would share that with you. The USDA just announced this lately. And any more information can be found at farmers.gov, USDA.gov. And you can also contact your local FSA for more information. So thank you. All right. Thank you, Ron. So I know we've run just a few minutes over here, but I wanted to make sure are there any questions that you might have. Please feel free to use the chat function or the Q&A type those in and we'll try and get to them as soon as possible. Again, I'll give just a minute or two here for people to be able to type that in. Again, I just wanted one more time to thank you for joining us today. We do have these webinars once a month. It's usually the first Thursday after the WASDE report. So we try and provide some information and update and analysis of what happens within the supply and demand estimates from USDA. So be looking for a notification on that. And we also like to, again, thank you for coming. There's also a monthly newsletter that we've been trying to put out. Again, if you've registered for this webinar series, you should be on the listserv or on the list to receive that. There's no fee or any charge for that, but we do we send it out approximately once a month. So we'll just again give one more chance for everybody. There's a thank you that came across. We appreciate again your your participation. So if there's anything, feel free to to to type that in now. I know that in again speaking for all of the other presenters, if you do have additional questions to come up later. You all know how where we live, you'll know how to contact us. So don't don't feel, don't hesitate to contact us and feel free to visit with us about any kind of questions. Looks like there is one question that came in. This is for Ron. What is the push for these carbon programs lately due to the current administration focus on climate change? Anything worth worth looking at or to take advantage of? Well, as far as I know that this is a big push from the this administration is carbon programs. And of course we did have that $5 carbon carbon program on it for North Dakota. I don't know exactly how it's all going to pan out. We don't have enough information, but yes, it's something that we will have to keep an eye on. And I'm sure there will be programs that deal with it. But all we know right now. And I would also add to that that I know Dave Ripplinger is also following the carbon markets and some of the private products pretty closely as well. So I know that he will have some information as this move forward and we learn more about the different private products as well. So any other questions? All right. Well, hearing none and seeing none. Again, thank you for your participation today and I hope everybody has a great holiday and the weather improves and we finally get spring. So thank you very much everybody.