 My name is Dave Ripplinger. I'm an extension economist with NDC Extension. I'd like to welcome everyone joining us this week for our now bi-weekly agricultural market situation and outlook. A little bit of a shorter version, just three speakers a day with Brian Parman, Frank Olson and Tim Petrie. We'll have questions at the end. Feel free to use the Q&A tool or the chat feature and we'll get to any questions you have at the end of this week's program. With that, I'm going to move right over to Brian. Hey, thanks Dave. All right, so today I'm going to hit on some of the points I have been hitting on before if you can pull it up, Dave, the PowerPoint. I'm going to talk about some unemployment statistics as well as the ag barometer that's put out by the Purdue University. They do a survey that they call the ag barometer and it covers a lot of farm sentiment and those kind of things. So the first thing, you know, like I've been doing week after week is covering the unemployment situation and a big reason for that is the impact that it has. It's obviously an extremely important issue that we're facing as a country and how it affects our economy. And we had been, this last week, I guess this last Saturday, reverses a little bit of a trend that we were having of increased in initial weekly jobless claims. This last week, you can see there on the right edge of the graph has come down a little. We're still well over a million initial jobless claims and we're kind of getting numb to the fact that prior to that, 695,000 was the highest of all time. So we are still averaging well over a million, which would each any week that we've had so far since March would have been a record in and of itself. So these initial jobless claims continue to be high and that they continue to monitor it. And that's a big reason that they're discussing another round of stimulus, which I'll kind of hit on toward the end. And then the next slide is one that they're watching even more so and these are the continuous claims. Okay, so initial claims could be somebody who files for a week and then finds a job or two weeks and finds a job. And these continuous claims have kind of been sticky. You look there at the right edge of the graph, they'd gone up a little as the initial claims went up and they've come down some, but they are remaining troublingly high. Okay, up above that 16 million mark of folks who continue to have a having trouble finding a job and are continuously filing for unemployment week over week that is that is being persistently above that 16 million mark, which is again a troubling sign and something that economists and legislators are monitoring very closely in the nation. So moving to North Dakota specifically, again, it's basically mirroring the greater US as a whole. And we have the continuous claims on the left. It is trended down, although not terribly sharply, it's kind of remained persistent, but it has trended down and then initial weekly claims has moved down considerably off the highs that we saw there in late March and early April. But we're still seeing around 3000, two to 3000 people, newly unemployed folks filing for unemployment in the state. Now the next slide I just thought was kind of interesting and just you see this is the unemployment by age, the age categories that tend to be unemployed in our state. The lion's share are folks in that 25 to 34 year old bracket. Obviously a lot of those people wind up working in hospitality, those kind of things and construction and manufacturing, and they make the bulk of unemployed persons. And there's a little bit of selection bias to this. You look to the right and you see ages 65 and over. A lot of them are retired anyhow, but those that were looking for work, you see that they've been laid off there. But the biggest demographic is 25 to 34 and 35 to 44 years old, which is a lot of your prime working years anyway. So it would make sense that that would be the lion's share of people unemployed, but at the end of the day that's what we're seeing. So the next slide looks at our general fund revenue. I kind of wanted to hit on what the revenue situation is for the state of North Dakota. And actually in the general fund, it's not bad. It's not bad at all. If you look at the bottom right, okay, where it shows total general fund revenues, and this is for June, June to date. Yes, June was a little bit below what the forecast was, but that bottom right block where it says 53.63 million, that's how far above the general fund is above the projections or the expectations that were put out years, a while ago. And so we're actually ahead on the general fund as a state. So that is some good news that's actually coming in from this is that, yes, the last few months have been a reduction that we've lost some income as a state, some tax revenues from sales tax and those kind of things. But at the same time, we're still ahead overall. And the graph at the bottom just shows that, yes, the last couple of months were below the projections for the state, but months before that it was above it. And therefore as a on the whole to this biennium were actually 2% above where the projections were. So on the general fund, things are things aren't looking bad at all. But my next slide shows what I showed last week, which was oil and oil and gas tax revenue allocations. If we can advance that real quick, Dave, the oil and that's way below. I mean, that's a good 9% below where the biennium expectations were. So the oil and gas tax revenues, yeah, those are well behind, but the but the general fund is ahead. And so it's a bit of a mixed bag right now, where we where we sit as a state. Okay, so it's not all bad news, and it's not all good news. And for the most part, we're doing a lot better than some other states that I've and folks from other states have have forecasted for instance, Nebraska's in some pretty tight spots and and other states are as well. But North Dakota, not as bad as others. Okay, so next I want to shift gears a little bit and talk about that ag barometer that I mentioned before. And this is showing the basically the sentiment of farmers that that are surveyed by Purdue University. And there's been a pretty good improvement in the last week or so. Okay, the last month, going from an index of a 96 to 118, well off the high from early this year. So that 168, which was the high that's shown on this graph in the last four years, it declined sharply to that 96. It's improved some. So sentiment among farmers that were surveyed by the ag barometer have improved, still well off the high, but we're seeing some improvement as far as that goes. Now, my next slide shows they asked the question, how worried are you about the impact of COVID on the farms profitability? And when they when they asked that question back in March, those are the gray bars, it says 320 up along the top of the graph 425, 26, 27, 20. Back in March, most folks were very worried. And then that continued to April may got a little bit better. But now only about 26% are very worried. And the fairly worried folks state about the same throughout the time, but a lot more not too worried people about COVID and how it's going to impact farm profitability going forward. So again, this is just showing the sentiment among farmers in the ag barometer has improved quite a bit. And we're probably seeing a lot of that nationwide, as we've seen some improvement in commodity prices. And not only that, but then we have the CFAP payments that have helped out. And I'll talk about it in a minute, but there's provisions in the current stimulus that's being discussed, setting aside perhaps as much as 20 billion again for agriculture. So sentiment is improved because of that. Then my next slide shows quick plans for machinery purchases. And that has basically remained for the most part unchanged. You look at March, 55%. And this is compared to a year ago, are saying that it will be lower. So in this chart, it didn't show up too well. But the red is lower. The gray is about the same. And then the green is higher machinery purchase purchases. Most people are saying that they're expecting it to be lower or and then 38% as of July 20, about the same. And that really hasn't changed over the last several years. And there was another chart that I looked at that looked at this machinery purchase index. And that is, this is basically just continuing a trend that has been going on for the last five years where the expectation is that machinery and equipment purchases will continue to decline. And this may not necessarily reflect mentality changes due to COVID, as much as just general profitability having been down year over year and remaining there. And therefore, equipment purchases have continued to stay lower and the expectation for new purchases remaining lower. And then finally, my final slide shows farmland expectations. And the red signifies expectations that farmland prices would be lower, the kind of turquoise looking bars expectations that they'd be higher. And then what's not shown is remain about the same. And earlier this year, 35% expected lower farmland prices, that's gone down to about 21% saying farmland prices would be lower 16, an increase from seven to about 16% thinking that they'll increase. Whereas the bulk of folks surveyed expect that farmland prices are going to remain flat. And I tend to be in that camp as well. I expect flat farmland prices and probably flat cash rents, simply because even though profitability has taken a hit the last several years, we've had these ad hoc programs like MFP two years in a row. And then we've got the CFAP stuff and potentially another round of payments coming from the whatever winds up getting passed, which we don't know what that's going to look like yet. But there's probably going to be a provision in it for agriculture. And that tends to keep these farmland prices steady. Because even though even though you have people at or below break even if you get these ad hoc programs that help that gets included in their income, there really isn't a big incentive for landlords to drop rental rates. There isn't an incentive for somebody to sell cheaply, because they know that farmers have been kept whole in a lot of cases because of these ad hoc programs. Now finally, the stimulus that's being discussed right now, really there's two competing bills that have been brought forth, the Heroes Act passed back in May by the Democrat House. And then this approximately $1 trillion stimulus, and that was $3 trillion, the Heroes Act. The one that's being discussed now is about a trillion. And in it, there's discussions of continuing unemployment benefits at the $600 federal level or dropping that to $200 in the other bill. There's discussions of payments to individuals again, the stimulus payments like we got a few months ago, discussions on if that's going to happen again and what those amounts will be, and then who qualifies may change. It was 17 years and below I believe in the last one, this one would be any dependent. So those of you with older kids, 18, 19, 20 still living with you that you're claiming, in some versions of what the stimulus looks like, you would get a payment for those. And not only that, instead of $500, it could be the full 1200. We just don't know until they get this thing hammered out. And right now, everything is on the table. But one thing I do want to say is $20 billion has been set aside in one of the programs for agriculture. And again, we don't know how that would be doled out. And we won't know until it's passed. Kind of like the last time, money was carved out for agriculture. And we didn't know exactly the structure of the payments until much later. And I think that we're probably going to be in that same boat in the next round. So there's a lot more questions on the next stimulus than answers right now. And you can go in and Google it and read what versions are being put out there right now. But I'm pretty hesitant to say what it's actually going to look like, because I don't think anyone knows right now, even the people who are going to in the end wind up writing it. So with that, I'm going to go ahead and conclude my presentation for today. And I believe our next presenter is Dr. Frane Olson. So thank you. All right. Thanks a lot, Brian. So good afternoon, everybody. I'd like to this week or this session, I'd like to try and provide a little bit of background and some some trying to help farmers make some decisions about as we move into the harvest time frame, what we do with on farm storage and on farm storage capacity. So this week I'm trying to look at what is the current market incentives for storing crops on farm. So on my first slide, I just want to remind everybody about the there's both the benefits and the cost on farm storage. So we're in this discussion, I'm going to try and provide a little bit of background on both the benefits and the costs as best we can. When I talk to farmers and ask them, so why do you have the level of on storage on farm storage capacity that you actually do, most of them talk about the increased harvest efficiency. And knowing in the Northern Plains here, our harvest window is typically very, very tight. So, you know, to make sure that combine keeps running as over as many acres as possible in a day is obviously a very, very high priority. And you can afford to spend some money doing that, because the cost of falling behind can be very high depending upon the year. There's also in this is the items in blue are the ones I'm going to focus on today in my discussion. There's also the carry in the futures market. So the futures market is trying to allocate, I mean, not only send pricing signals for what do we believe the base price or the value of different commodities are. But as we look forward in time, as you look at the different contract months that are offered within the futures markets, that price change from contracting period to contracting period also sends a signal on to farmers about is the market providing an incentive for you to store, meaning that we have enough supplies, the supplies short term are adequate. We're going to give you an incentive to put it in the bin and hold it until a future time period, which is called a carry in the market where the the futures contract months each price gets a little bit higher as we move through time. There's also the local cash market can be sending some similar signals or even in some cases opposite signals, when we're looking at the change in the basis levels. And again, typically at harvest, we see some very large negative basis levels. And as we move throughout the rest of the of the the winter months and into the spring, those basis levels tend to become less negative. And really what's happening is your local market is also sending a signal that, you know, to try and control the flow of grains throughout the season. A large negative numbers providing disincentive for you to deliver today, it's saying we're going to provide an incentive for you to put it in a bin and store it for later dates. So I'm going to focus on those two blue categories because those are the ones that that I can help quantify and make estimates for. And then the last potential benefit from, you know, on farm storage in particular is speculation. And again, a lot of farmers use this as their justification and rationale for keeping on farm storage or even expanding on farm storage, where they're at, you put it in storage anticipating that prices in the future will be higher. And at the same time, you're willing to accept the risk of potentially lower prices. Now, on the next slide, I also talk about the costs to on farm storage. And again, as I visit with farmers and I ask them about what does it cost you per bushel per month to store on farm. The first thing that pops to their mind is usually the facility costs themselves, the bins, the elevation or leg system, the dryer system, you know, what does it cost to put that infrastructure in. But in this analysis today, I'm going to, I'm not going to evaluate that I'm going to assume that those costs are sunk, meaning that you have the facilities already that that the reason you have those facilities there is to kind of offset some of those harvest efficiencies. And I'm going to focus on the costs highlighted in blue. Now, one of the things that again, the lenders will often bring up farmers sometimes will think about is the interest cost on the value of the grain. So you have an opportunity cost of the money that's tied up in your inventory. If you were to sell that crop, you'd be able to pay some down some debts, which would reduce your interest expense on farm. And so we have to recognize if we keep the grain in the bin, and keep it as an inventory amount that those interest costs continue to climb or continue to click along every day, the longer we store the grain. So we do have to include the cost of this opportunity cost or the real cost of the grain inventory, the value of the grain inventory. There may be additional drying costs. Now, we can also argue, well, as the cost of drying, let's say a high moisture crop like corn down to a level that's where it could be a storable, that might be considered a production cost. What I'm thinking about here is the drying costs is that you need to dry it to an additional lower level to be able to put it in your on farm storage bins and keep it in good condition for an extended period of time. Aeration, again, that's really to try and make sure that the internal air temperature within the storage bin is uniform. Again, Dr. Ken Halevang has done a lot of research on that and has very, very good information about trying to maintain the quality of the crop and as you're using aeration systems to be able to maintain that. Now, there's some cost to that obviously in electricity and depending upon how long you're running those aeration fans, you know, that can add up over time. There is the potential for shrinkage. Usually when farmers think about shrinkage, they're thinking about the cost from a ring it from a very high moisture level down to something that would be storable. Again, a lot of times the elevators will charge not only drying charge but also shrinkage rate. There have been cases that I know where farmers have put grain in the bin at an acceptable storage moisture, you know, again a moisture level that would be acceptable for long-term storage, but they continually ran the aeration fans and over time actually depleted the moisture content in the grain and so when they pulled the grain back out again, it was much lower moisture content and they actually had some additional shrinkage costs. So there's some things that periodically that will come up and cause some problems. When I say when I mention handling costs, this is really the extra cost of not only loading and unloading the bin but also potentially the cost of driving some extra miles to go from the field to your farm and then from the farm back to the elevator instead of driving directly from the field to the elevator. So there is that potential. Again, every farmer is a little bit different. There's also we've included potentially a cost for monitoring your crop condition. Again, whether that be a computerized monitoring system where there's sensors embedded in the grain or embedded in the grain bin or you can monitor the temperature and humidity and crop condition remotely or whether it's that you get out on a regular basis and climb to the top of the bin and check your bin and the condition of the crop, the old fashioned way. There's also the potential risk for quality deterioration and again, this can be for a variety of reasons. It could be bug damage. It could be some spoilage or heating that occurred just because you weren't monitoring as closely as you should have been. So these are some additional costs that periodically come up to be potentially large costs. The risks thing in maintaining on-farm storage and we try to include that in this particular analysis. So the next slide, I just wanted to give a reference point for a spreadsheet. It's an Excel spreadsheet. It was originally designed, the spreadsheet was originally designed by Dr. William Edwards at Iowa State University and he did a very good job of laying this out. But what I did was I got permission from Dr. Edwards to be able to take his base spreadsheet and expand it and tweak it a little bit to better reflect the conditions we have here in the northern plains. And so after some modifications and some small changes, I've reposted that and you have access to the spreadsheet that I'll show you the calculations just a moment. But this is a place where you can go and enter in your own information if you're interested and be able to run your own analysis. There's two different ways you can find it. I put the URL on the very bottom in blue, another possibility is to just use a search engine, type in NDSU farm management. That webpage will pop up on the left hand side. There'll be a tab for tools and then you can look for the grain storage cost calculator. As a sidebar, I will repost a newer version of the Excel spreadsheet. Actually, the version I'm going to talk about today in the next couple of days. So if you want to hold off a little bit and wait, I'll have a more updated version that you can look at here in a few days. Okay, so on the next slide, I wanted to give you some of my key assumptions. So there's going to be some background information, some assumptions I made in particular about the costs for on-farm storage. So this is just a table that provides a brief summary of those my assumed costs. I assume the interest rate at 6%. I'm not assuming any additional drying or shrink charges. I'm just saying if you put the crop in the bin for long-term storage that it's at an appropriate moisture level. I am charging for extra handling and transportation. Last time I checked most farmers, one of the jobs they really don't enjoy very much is hauling out the grain, emptying the bins because that can often happen either at some very cold temperatures or some in-appertune times. So obviously if I'm going to fill the bin and take the bin out or re-empty it, I want to get paid for doing that. This is the net cost of both the extra hauling potentially as well as the loading and unloading charges. I did include about a half a percent quality deterioration, which that's really when you think about it pretty minimal. That would include not only the the spoilage part, potential spoilage, but also wastage. I mean there's always a little bit of the spills on the ground that you never quite get completely in the truck. Electricity for aeration. You can see that it varies a little bit by crop based on my assumptions of how long you're going to keep that in the bin and how often you have to run the fans. There is extra labor I did bill for checking. This is for monitoring the bin after you filled it. I'm assuming about an hour a month we're getting paid about 15 bucks an hour. Again if I'm going to do that on a regular basis I want to get paid for it. And I did make some assumptions about commercial storage just so we can compare the cost of on-farm storage versus something at the commercial elevator. These are the assumptions I made at least for corn and for spring wheat. Five cents per bushel per month with the first month free. For soybeans I just assumed six cents per bushel per month starting on the first day. So the next slide really is a summary of the total cost per month. And again I've got a set of numbers for corn, soybeans, and spring wheat. For corn and soybeans I'm assuming that the grain is going to enter the bin in the beginning of October. That's kind of the harvest month. It's towards the first part of October is where we're going to the cost will start accruing. For spring wheat I'm assuming the harvest will happen about the first part of September. Again these are approximations don't worry too much about the gory details. On the far on the far left hand side I have the month so that will be the month that you took it out of the of storage that you actually emptied the bin and hauled it into town for sale. And I'm assuming again this would be at the end of the months. So from the time period standpoint we're loading the bin or filling it in about the first part of October. And if it was a February month we're taking it out towards the end of February. So the blue columns the blue numbers are the accumulated costs per bushel. So the total cost from when you enter the bin to when it's taken back out again. And then the excuse me the column on the far on the just to the right of that would be the the I mean comparable cost for commercial storage you have a reference point. On my next slide this is information that you'll have to enter into the spreadsheet on what's this carry in the market. So we've talked a little bit about the costs. Now let's talk about this potential benefit or what is the market paying us enough to be able to absorb and bear those costs. Now these the the two columns that are highlighted in in this gold or yellow are numbers that you as a user have to enter. You have to enter in not only the futures prices as well as what you expect the basis to be. So on the futures prices I grabbed these futures prices this morning as of this recording which would be August 6th. I took these numbers during that mid-morning break between that 745 and 830 break between the break between the overnight trade and then the day trade. So these are as of this morning and again the futures prices that you see there I pulled those directly from Chicago border trade or Minneapolis grain exchange. The column right next to it is expected basis. Now I know basis changes considerably as you move around the state of North Dakota within the region. These are I just kind of pulled or surveyed a series of different elevators with across the state primarily in probably the I would consider the central portion of North Dakota or east central portion of North Dakota. The ones that are in black are actual elevator quotes. The ones that are red are my best estimate on what I believe the basis levels will be as we move forward in time. So please understand some of this is actual market information some of it's my assumptions about the future. The column in the blue this expected cash price that would be the you know the the futures price minus your basis level. Okay so now the next slide is really the punchline. This is where we've combined both the sales price that you that the market's going to pay you for and it would include both the futures price and the and the expected basis level subtracting out the cost of storage for each month and again there's a column for corn soybeans and wheat. I've tried to color code this so it'd be a little easier to try and figure out where where's the high point. So if it's a darker brown that's a lower net price versus the the more gold colors or lighter yellows would represent a higher price. So let's just look at corn for for just a moment to kind of visualize what's happening here. I have a column for on-farm storage. I have a column for commercial storage. In the blue on the very top I also have a row for the harvest price. This is if I were to contract today for the delivery at harvest and deliver directly to the off the combine into the elevator that's the price that I would receive. Okay now if I put the grain if I harvest it and put the grain in the bin and I were to forward sell it today for delivery in some time in the future this would be my expected net return so that that's the column for on-farm storage. So again looking at corn the harvest price is 273 again that would be if I directly delivered off the combine. If I were to look at that first column for on-farm storage if you notice the highest net price is 293 in May. So today if I were to contract for delivery of corn in May and I concluded all of my costs I took the futures market price I subtracted out expected basis this should be my net price. So as we look at this column for on-farm storage which is really the one that I want to focus on right now today the the markets the combination of both the futures market as well as the cash market is providing you an economic incentive to store grain in particular to store corn. Okay so what that is signaling then is we have adequate supplies for immediate delivery and when I say immediate delivery I'm thinking harvest but there is an economic incentive to also then spread out some of those sales to a future date and if you notice the column for corn as well as the column on the far right hand side for spring wheat we're getting some very similar signals. The expectation is we're going to have a good corn crop we've got a good spring wheat crop coming at least aggregate within the North American market so the the Minneapolis spring wheat as well as the local cash market is also providing a pretty strong incentive to be able to store grain and and deliver it at a later date so right now the market is saying yes we will provide enough incentive for you to meet all of your costs and potentially get a higher price. However if you look at soybeans in the middle it's the exact opposite store a story. If we look at soybeans and again the as you look at whether you deliver directly at harvest at $8.10 so if you were to contract today for delivery at harvest $8.10 versus the alternative choices we have today to be able to sell today for delivery sometime in the future the market is not giving us any incentive in fact there's a disincentive to store soybeans for an extended period of time. Now again for harvest efficiency and for some other reasons we may want to take soybeans and put it in on-farm storage temporarily but the moral is this the takeaway from this is that the market right now today the combination of the futures market and the basis what we expect basis levels to do is providing us no incentive at all so the soybean market is signaling today farmers don't store soybeans we want soybeans delivered sooner instead of later so we're getting opposite signals because sometimes in in the marketing world I get this question of well you know if I need to store something what should I store now and what should I sell at harvest well this is this is a numerical example we're saying the market today is sending a strong signal sell soybeans at harvest or shortly after but we will provide an incentive to store corn and spring wheat for a later date okay my next slide I just wanted to remind everybody that I've only included some of the benefits for on-farm storage again Dave if you can flip it one more time please there we go I so far only looked at this carry in the futures market and improve basis I was really focusing on trying to help farmers understand what is the market telling you to do today now if you as a farm manager have to make the decision well it still may be a my best benefit my best interest again to store soybeans for example for a short period of time put them in the bin to try and gain some harvest efficiency or based on my personal assessment of the marketplace I think there's some things that might be coming in the future that would cause futures market prices or cash prices to increase above today's levels and so I'm willing to speculate and put grain in the bin on a speculation basis so again I just want to emphasize the numbers I just showed you is the market signals that the futures market the cash market and sending right now today my final slide just as a reminder to everybody next Wednesday August 12th USDA is going to update the wisely report the world agricultural supply demand estimates as well as the production report now that production report this will be the first month that USDA will use a farmer survey to try and update yield expectations okay up until this point USDA has been using trend line yield but August is the first month they actually send out surveys to farmers and ask them what do you think your yield potential is or if you're you know what what kind of yield are you going to get on on your farm so August is the first month we're going to do that this report is usually one of those that provides a little bit of volatility in the marketplace based on what you know the traders and analysts are expecting those those numbers to be so with that I'll close things off and look forward to your questions and I'll hand things over to Tim. Good afternoon everybody Kim Petrie extension livestock marketing economist going to my first slide is one that I left off with two weeks ago with our webinar and I showed you this and said the next day after our webinar on Friday July 24th two important USDA reports coming out one was a semi-annual July first cattle inventory report and the other one was the monthly cattle and feed report I told you that our expectations were that beef count numbers declined and so we're looking forward to seeing if that came through and then the other big unknown was how many cattle are backlogged both in feedlots waiting to be slaughtered and then outside of feedlots waiting to be placed because of the backlog and we thought that these reports would give us that indication so go to the next slide just shows us that you know our expectations held true the top slide is the inventory on July 1st of beef cows in the U.S. now the July 1st report is much less detailed than the January in the January inventory report we get a state by state breakdown this is only the U.S. on the July 1st you know we don't know what happened in North Dakota or other states but anyway as expected beef count numbers fell for the second year in a row and so that means our calf crop was lower in 2019 and the expectations are for 2020 for a smaller calf crop as well and so that certainly would be supportive to prices because we have less to sell however we also got substantiated that we do have a more cattle in feedlots than a year ago and more feeder cattle outside feedlots than a year ago because of the backlog and the big thing affecting fed cattle prices shown there in the bottom is we got just a lot of cattle you know 4.8 million head on feed over 120 days and you know this was July 1st and now we're into August and we've been eating away at this and the packers are are going strong and doing Saturday kills and our kills are you know way up above where and when we had to reduce capacity due to the absenteeism in the packing plant so now but but anyway that's just one of the reasons that we in a while we'll look at fed cattle prices and why they're lower but there is some improvement because we're working through so let's go to the next slide before we get into the actual prices I was on a meeting earlier in the week with Brad the state FSA director and he wanted me to to remind everybody and if you have contact that CFAP applications that were you know Brian talked about CFAP that you know can still be made through August 28th and particularly at the US level the applications are running behind what was expected and maybe some in North Dakota so he just urging if any of you you know probably the people on this call it's like talking to the choir you've done it but there are you know some out there that haven't done it yet and for various reasons and be sure to get that done because the cutoff is August 28th and just then you know looking at North Dakota this would be as a money then up there in the upper right hand side almost 13,000 applications 172 million has been paid out and then the different categories are shown there you know three million for dairy and 90 million for livestock 77 for the major crops and a million and a half for specialty and and so on but you know on a US basis we had 16 billion allocated and so far only about seven billion has been paid out so you know about half and so there's a lot of money there so this isn't for sure but the expectation is that the additional 20% that you didn't get paid again these payments to date are based on 80% of what you qualified for the payments that have been made so it looks like we'll get 100% so I just did some quick math there if we you know we're expecting to get more in North Dakota some more applicants which will raise it up a little bit but I just said as of Monday well what would 100% be and so that would have been about 215 million in the North Dakota total and 112 and a half million there for livestock so you know a nice chunk of change there like Brian mentioned is help out and we have that farmer optimism increasing and and like he said this is one of the reasons because we've pumped some money in plus the expectations so again if you know people or you can get the word out of some way please urge people to apply so go to the next slide and well just that's okay that you know we you know on the livestock side for instance we had if you see there in the middle so far we've done seven a little over 7000 applications 720 so go to the next slide I just said you know how much realm and again this was basically this first round covered cattle hogs and and lambs in North Dakota how did we do and so I think we did pretty well and also we'll talk about dairy but these are just out of the 2017 census is the last reports we have of how many actual producers there are farms with cattle and so you know the first glance up in the upper right hand side you see total farms with cattle and calves about 8000 over 8000 and yet we had 7000 applications so you may say even you know wouldn't the cattle been more than that but I took a little bit closer look at that you know there if you look at the top numbers there there were over 900 farms that had nine head or less so some had one or two and actually almost 1700 1674 had 19 head or less so you know these might be roping steers or some 4-H FFA or people that had one or two steers or something to keep from eat or something so I think you could you know some of those aren't going to be applying for sure so that brings it down to about 1660 people with cattle of over 120 head and you know 1674 or less so about 6600 total farms that have cattle about the same thing over on the beef cow side there you know we had 70 a little over 7700 with beef cows but in those top categories under 19 another 1200 of those very very small again brings it down to about the same about 6500 maybe what you would call commercial cattle producers and again we had 7000 applications go down to the hog side again 156 operations with hogs in 2016 but those top categories 100 of them alone are less than 24 which again could be 4-H or something like that and so that brings it down in a hurry and on the lamb side again again some small ones there so I think you know when we look at it that way that we did get a lot of people although I'm sure there are some that are still going to file and qualify go to the next slide on the just on the dairy side here's the number of licensed dairy farms by the North Dakota A department and so you see we had as of June 1st about 56 dairy farms 49A and 7B down in the lower left and so we had 56 dairy farms we actually had 58 applications for the dairy program more than licensed dairy farm but I think that's kind of an FSA deal where the farms are licensed but you might have more than one owner brothers or father and son or a husband wife or so on that report that way so that might have been a reason for actually more applications than the actual number of farms so again on the dairy side I think we did very well but again urge people to that do qualify to apply because there's certainly money there and FSA is taking applications but this is the last one so go to the next slide talk more about the uh what were some prices here and I want to kind of focus on feeder cattle because prices have performed better than we originally expected there are two things and you know basically talking about fall feeder cattle is the big thing now the two biggest factors that affect fall feeder cattle prices are slaughter steer prices and corn prices and so I'm going to talk about both here's slaughter steer prices and again you see that red line there prices are depressed because of that big backlog of cattle still waiting to be slaughtered although we see improvement in the last month and we expect continued improvement the red squares there you know the futures market is indicating that seasonal increase that usually occurs and and moving up there so that's good news that the fed cattle price could go up would be good news for feeder cattle although again somewhat below last year and maybe feeder cattle would be even more important on the 2021 futures and you know so we've got you know up there into the February live cattle futures up there at 115 and by the April futures up there 117 118 not a lot different than that gold line and that green line or what prices were actual prices were last year and so the April futures getting pretty close that so again that's kind of supportive for feeder cattle even though that fed cattle are low right now so go to the next slide kind of an interesting slide here what I did is I the black high low and closes there are November feeder cattle futures and then the green line is the December corn futures that you know frame just talked about I just used yesterday the deice corn futures closed at 322 shown on the bottom left your chart and like frame said they were 323 or so there when he took them today so life of contract lows and very low the interesting thing is when right before COVID started we had about 148 November feeder cattle futures and they after going down significantly down to 114 they've continually bounced back up and we're right back to where we were at the start of COVID right there at 148 147 77 yesterday the close on the November feeder cattle futures so again I think that is higher than our expectations out we're back there in March and April when they were so low and but you know I've said this quite often there's a lot of times in agriculture one sector's gain is that the other's loss and obviously it's the low very low corn prices that have stimulated feeder cattle prices and just looking on the right hand side of that chart you see all that corn did bounce up there for a while at the end of June but is really crashed with the good growing conditions and so on again down to the relatively low levels and like frame told you the market is saying store corn because of the low prices but you see that opposite relationship corn going down and feeder cattle going up so go to the next slide shows you what those futures look like compared to the cash market the red line again is 800 pound steers which is what the futures market is based on there isn't a CAF contract and again there's the red line showing you that we've had seen gradual improvement throughout the year after the low there in April and there's the the square bar blocks there red square blocks are the August September October November futures interestingly enough the green line was last year and the futures market right now is saying 800 pound steers are going to be the same or a little better than last year and even by the November futures up to 2018 levels above what they were in 2000 last year in 2019 up to 2018 levels so again up beyond what our expectations were back in March and April when we didn't know what was happened this COVID and again corn prices have really funneled into that and also the fed cattle went up and that those those April futures up there on 1718 have helped to on the on the fed cattle site so what's that mean on the next slide then for CAF prices keeping the feeder cattle in mind we're at similar prices to where we were last year we didn't see the big decline in feeder cattle that that we did on some of the other cattle particularly fed cattle and even the heavyweights because you know there was still a demand for cattle for the lightweight cattle for grazing and not a lot so you know are available for selling so not a real market test there so in the fall usually there is seasonal weakness but you know we're we're at similar prices to last year and looking at the the previous slide to talk about feeder cattle that the futures are similar to the heavier weight feeder cattle last year at about 10% price on to the 550s compared to the 750s or the 8s would put them you know at at similar prices to last year or even you know by November maybe could even be a little bit better again and and I agree the corn crop isn't in the bin last year was a good example and we're a long way from that things look good now and things can happen and you know we have high unemployment as Brian said and things can happen on the on the fed cattle site too but that's just what the fundamentals kind of are showing us now so go to the last slide I've talked about livestock risk protection before and so I know at least a number you aren't interested in livestock anyway but I want to do a couple of things here just a reminder if producers that have calves are because prices have went up and and are wanting to do some livestock risk protection for fall calves you're going to have to do it pretty quick because the closest contract we have is the 13 week contract this is the yesterday's offering by USDA so that red circle line on the right hand side shows it if we would have done it by nine o'clock this morning have a November 4th maturity date so if you sell on October it's already kind of too late for livestock risk protection and today's offering will be November 5th so if you have sell calves in November you got a and want to do some livestock risk protection you have to do it pretty soon off you don't sell till January and have background at cattle and then they move up into the over 600 pound category you still have a couple months and you know the market it's been going up so maybe if watch it to see if it continues up I'm just talking about this as a as a time deadline and then the other square that I'm just going to mention and again not get into the other particulars and people do have more interest they can get a hold of me and in the ins and outs of livestock risk protection but USDA's expected ending value for under 600 pound steers and on this would have been November 4th then as a 162 dollars as you can see there in that square which is actually above what some as we saw in the previous chart they were a last year and you could lock in 160 coverage so USDA is kind of looking at that futures market and again dependent looking at the low corn prices and so on and saying that's a that's an expected price level so you know I think there's some good news in that at one time we're saying expect the worst on false calf prices and I I realized last year wasn't the best year for calf prices but to think that we could have similar prices you know improvement and and but we'll have to wait and see because we've got some time to go so I'm just going to wrap up there and I think that's the end of our formal presentation and turn it back to Dave to monitor any questions that you might have. Thanks Tim so just a reminder first before we get into questions we do have two more webinars formally scheduled between now and Labor Day two weeks from today on August 20th and then two weeks after that on September 3rd again at 12 30 at the same URL so if you're already registered you're good to go. Going from there just looking at some some questions we have one already which I'm going to throw over to Brian. A question asked by many folks how much do you think the extra six hundred dollar jobless benefit is hurting employers? I know it's several employers that can't find applicants. One is a large employer with over a hundred job openings in Fargo. Okay so yes it hurt that the answer is a bit mixed and we can I can I can answer this without throwing philosophical comments onto it because one of the challenges the federal government had when they put this additional benefits package together is antiquated state systems for calculating and determining unemployment amounts. For instance North Dakota has a great a system such that you get a percentage of your wage as an unemployment insurance up to a certain amount then then it limits out and they and they they calculate that. A lot of states do not have a fancy enough or state-of-the-art system to be able to relay those kind that information to the federal government such that they could do a graduated system where they give the federal government additionally gives you a percentage of your lost income when you go unemployed. So what the federal government did is they came out with just a blanket six hundred bucks okay and there's a problem the problem with that is and what they were trying to do if you it's very different living in Grand Forks the cost of living versus San Francisco okay and so six hundred dollars might not be enough money if you're renting an apartment in Manhattan New York whereas in Grand Forks it's more money than maybe between the North Dakota's unemployment benefits the state level and the federal combined is maybe more money than you are actually making working. So it speaks to a problem of cost of living differences across the nation and remember the federal government is trying to do it for Florida North Dakota Nebraska New York California etc and this also goes on to you know federal minimum wages if you live in New York City for instance again when you're renting an apartment in Manhattan 15 bucks an hour is is not enough money to live on hardly so so setting that minimum wage of 15 bucks is is too low whereas I used to live in Mississippi 15 bucks an hour is a pretty pretty good wage because the the property values are lower the cost of the living is just flat lower so I know this I'm getting kind of long-winded on this but the problem that that's the problem that they ran into is the states a lot of them do not have a system such that they can relay to the federal government what so-and-so's percentage of their lost wages is and then they can compensate them accordingly not so much to discourage going back to work but enough to get them by or hopefully get them by for for a few months so to answer the question yes in some areas six hundred dollars is can absolutely be a deterrent to going back to work especially if the government assistance plus the state government the federal and the state government assistance is above what they were making in the first place and I think I calculated in North Dakota that if you worked a 40 hour week it was something like the federal plus the state it ran out come something like it typically 20 bucks an hour became if you were making that that was where you were indifferent about going back to work or not so if you were making 25 dollars an hour you were way better off going back to work if you were making 17 16 15 dollars an hour you were better off taking the benefit rather than going back to work so yes it provided a disincentive but I also wanted to explain in the question why the federal government did what they did is because it was extremely difficult if not impossible to figure out a proportionate way to divvy out these this this extra federal help so that's what it boiled down to it kind of goes to the stimulus payments we all know that there are some people who do not need the $1,200 per person stimulus payments they have a job they haven't lost their job nothing very little has changed for them but determining who that is who actually needed it and lost it is difficult or or lost a percentage of income is difficult because just because you didn't lose your job doesn't mean you didn't lose a totally didn't mean you didn't doesn't mean you didn't lose a lot of income so how do you determine that well to get the money out quickly it's it's impossible to determine that so so they just cut the checks and then there's the final argument to that which is that it's a stimulus to the economy that even if somebody like myself or Frayner Tim or whoever didn't need the $1,200 per person the hope is that we go out and spend it and then that helps stimulate the economy increases consumption and keeps keeps job flowing so they kind of looked at it that way that even people even though we're giving some to people that we know don't need it truly need it if they could then go out and spend it that's a benefit in and of itself when you looked back this is the same logic that the under president Bush and then you know Obama when they came up with those stimulus payments when the economy was in in trouble they basically did the same thing it's the same logic that if we give you $800 you're hopefully going to go out and spend it in Fargo or Bismarck or wherever you may be and that's going to help stimulate the economy so that goes back to that $600 benefit thing as well that yeah maybe they're paying too much which by too much I mean a disincentive to go back to work but then if people are spending it more than they would normally spend then then we're getting a stimulus sort of a stimulated reaction out of it and keeping businesses open so it's not a simple answer is the problem I wished it was but that's the competing sides their arguments for the whole thing is that yes it does provide a disincentive but to go back to work in some cases and in other cases it's not enough money but at the same time it's a it's sort of a stimulus plan as well all that hopefully people spend it and that's and that's where we're at so so what you take away from that obviously your own opinion I can't dictate that but I'm just trying to explain where each side is coming from with the logic to the decision that they're making or that they're advocating that that's where it sits so I'm not going to try to say one is better than the other they just have different they're just coming at it from different angles is all one side saying well we need to push people back to work the other side might be saying well yeah maybe this is a disincentive in some areas but hopefully they spend it and it keeps the economy rolling until we can get through this COVID thing so yeah nothing I can put on a bumper sticker with that but that that's that's really the the explanation but thanks Brian there's no more questions just throw it back to the panelists and ask if there's any other comments that they want to make is a few times past or other panelists have spoken and then during that time is you guys mull over that and anyone else can ask a question if they'd like just a reminder that you know the recording of this webinar and all previous webinars is online this one will be on shortly once we get it edited as well as the powerpoint deck for all of the speakers uh are there any other last-minute comments any well wishes uh from the panelists there's a question there Dave wonderful thanks Ryan uh any comments on early harvest results because we are we're there now Frank um I guess sample size of one so I had uh I had one conversation with the farmer here a day or so ago they had started wheat harvest in kind of the southeast part of North Dakota uh you know wheat yields were actually better than they had expected they considered them to be kind of an average or slightly above average yield uh when I asked about quality um it was it was a little bit light on the test weight it was about 58 pounds uh proteins were coming in about a 13 and a half but again it's it's sample size of one so I want to be very careful I haven't I haven't heard much from from others yet thanks Frank in two weeks you'll have a bunch all right well if there's no more questions I uh want to thank the panelists for their presentations today and answering questions and for everybody for taking part again we'll be back in two weeks on august 20th at 12 30 hope to see you then bye