 Well, good afternoon and welcome to this week's ag market situation outlook. My name is Dave Ripplinger. I'm an extension economist with NDSU Extension. I'm going to have the same program we've had the last few weeks as we go forward. Then afterwards, after the webinar is over, we ask that you, if you can, please give us some feedback, including things that you might want us to cover in future weeks. With that, I'll hand it over to Brian Parman, who's going to talk about the macro economy. Yeah, thanks, Dave. So today's talk, I'm going to talk some more about unemployment because it's been in the news and it's ever changing. It's and one of the biggest reasons that I spend so much time talking about unemployment is simply because of all the macro economic data that unemployment essentially contains in it. For instance, wages are typically higher when there's lower unemployment. People have more disposable income. Consumption is higher. And then we all see these statistics. So low unemployment, higher consumer sentiment and vice versa, even for people who don't lose their jobs, they see that everyone else is losing their jobs or jobs are being lost. And so it gives us a pretty good barometer of how things are transpiring in the economy. And so that's why this metric is all over the news. That's why we spend a lot of time talking about it. So my next slide, what I want to show is, again, that table that defines basically the three or the six different metrics of unemployment. And it's important when you hear those numbers to realize which ones being discussed, the one that's touted the most, the one that you see the most frequently is the U3 total unemployed as a percentage of the civilian labor force. That's the official the official unemployment rate, but that does not count people who are stopped looking for work or that doesn't count people who are underemployed. In other words, they took a job they had to take in order to make ends meet best they can, but they're they're not employed in the based on the skill set they have, for instance, an electrician who's taking a job doing something else that pays a lot lower, but they did it to make ends. OK, so that U3 is the one that's cited the most. The U6 is total unemployed. OK, that's the one there at the bottom. That's people who've gotten frustrated and just given up looking for a job because to be in the U3, you have to be actually actively looking for work, but can't find it in the U6. You said, perhaps maybe forget it. I'm just going to give up. There's no jobs out there for me, etc., etc. And it counts the underemployed. So the number that came out in my next slide shows that from the BLS data and that was this morning that this number came out and this was for April. Non-farm payrolls lost 20.5 million jobs in April. 20.5 million jobs lost in April alone. This is the largest one month drop in history, period. More so, they don't have the data like they do for the depression like they do now, but I can almost assuredly say that even during the depression, 20.5 million jobs were never lost in a month. Again, that's a big difference. That's the difference. One of the biggest differences between the current situation and everything else in history, again, is the rate at which it occurred. Typically, there's a run up to these large unemployment numbers and then a slow trickle back down as we get employment numbers improved. This time, all the jobs were lost in a relatively short time. And then, of course, the question is how fast will they recover? So that's the U3 unemployment number. And again, this is that official one that's often quoted hit so far at about at the end of April, about 14.7%, almost 15% before the crisis. It was three and a half. And at the height of the financial crisis, it was almost 11. So we've blown by that by a wide margin. And then the U6, what people, some people call the real unemployment rate up from about 8.7% before COVID-19 crisis to almost 23%. So that is a big change and a big reason why there's some sour sentiment about the economy. So my next slide shows the weekly jobless claims that basically led to this. And you can see this one, the last one, that 3.169 million new claims. That was for the week ending last Saturday. That report came out yesterday. We can see that it's trending down in terms of number of new filings. It's trending in the right direction, but these are still huge numbers. 3.169 million again before COVID would have been a huge record. Many fold over had it happened before. But since we're coming, looking at where we were, we've added a lot of newly unemployed people in the last six, seven weeks. So my next slide shows the that number and this this chart I took from CNBC rather than make my own, but it shows how many jobs were lost in April. So this is monthly job loss is going back to 1939. And we can see where April's minus 20.5 million ranks on a historical timeline and the Great Recession, which is just a little upside down triangle just left of that big line going down. That's the single biggest monthly. So just to put it into perspective, how big this is on a historical scale. So my next slide, I just want to talk about the labor force a little bit more just real quick. And the question is, what jobs will come back and how fast? We lost them extremely fast. There's some comments that have been made out there that a lot of these jobs will come back almost as fast or or somewhat quickly. Opinions vary on that. And then and then here's the thing. How many of those businesses will still be around for those jobs to return? And if new businesses come in and replace them, how fast will that happen? And then the other thing is when you have this level of unemployment, how is that going to impact hourly earnings? Because typically periods of high unemployment, periods of recession or depression, those typically drive down hourly earnings, which again leads into consumption and consumer sentiment. If you're making less money, you're obviously your consumer sentiment is reduced. And and if we have prolonged unemployment, that keeps consumer sentiment down as well. So that's the things to look for on the especially and as it pertains to the ag on the demand side, is it going to be there? And is it going to be as strong looking at the quarters ahead? So my next slide, I just want to hit on forbearance requests again and mortgages. This is what forbearance requests have done since middle of March through the close to the end of April. And you can see that Jeannie Mae, Freddie and Fannie and Freddie. This is weekly forbearance request rates as a percentage of service volume. These forbearance requests have declined, kind of like the the unemployment filing. So they're headed in the right direction. But so far that's this is still an extremely high amount of forbearance requests. And if you look all the way to the left of the chart, you can see just how high they were before COVID-19 hit. I mean, they spiked and they've continued to be relatively high the last month or so. So my next slide, I just want to show forbearance plans. And what what they kind of look like. And there's really two plans, two main plans that have kind of been given to be granted to folks who've requested forbearance. Some some plans add the payments on to the end of the month. OK, so it says if you you don't make payments for six months, let's say, hypothetically, and so what they do is they add they add interest to it and then roll it on to the end of the month. So if you had 270 months left on your on your 30 year mortgage or something, you go into forbearance, you'll still have 270 months of payments remaining. They're just going to roll to the tail end of the of the. Of the loan. And so in total, we had 3.5 million borrowers have requested forbearance, and that's approximately 7 percent of total mortgages. OK, so just a shift in here, shift gears real quick. And the Purdue University's ag barometer came out recently, and this is for the survey period in April, so this report just came out this week. And this is the lowest reading of the it's that it's basically what this chart says is it encompasses a lot of different things. Sentiment among farmers among a whole wide range of ag businesses and farmers and what they're trying to gauge is it's kind of like consumer sentiment, but it but it's a farm in a ranch rancher sentiment. And what we see is how much it has declined in the last week. I mean, it has went down the last month, went down rather dramatically from a sentiment of 168, which a lot of that being reflected in optimism about trade and other things all the way down to 121 at the end of last month and then down to 96. So it is precipitously dropped. Now, my next slide shows the index of future expectations and current expectations and future expectations are still quite a bit more optimistic than current conditions, the index of current conditions, which is to be expected because right now it's it's not real promising in ag. But we can see that the expectations for the future are pretty well muted as well. You look at where we were just just a couple of months ago. The index for future expectations was 175. It's dropped almost, you know, a third little over a third and then current has gone, you know, less than half since it was a couple of months ago. So in other words, sentiment among farmers, ranchers, producers is weak right now. Folks are not overly optimistic. They're the current situation is tough and the expectations down the road, at least in the short run, are not real promising among among our producers across the country. So my last slide and I'm going to shift totally shift gears here is regarding hemp policy. We had a hemp meeting yesterday on hemp production hosted by Dave Ripplinger and a slew of other sponsors. And I had the opportunity to moderate two different chat rooms or discussion rooms and the rooms that I was in were on policy. And so I just wanted to hit four highlights from the policy discussion. And the first concern among potential producers, producers and policymakers in Minnesota and North Dakota is crop insurance for hemp over the 3.3 percent total TH3 threshold. If that happens, if you get over that 0.3 percent, the crop has to be destroyed. And there really isn't a and to my understanding, there isn't an insurance mechanism to recoup that the loss if that was to happen. That especially affects CBD producers. So if that happens, the crop test hot, as they say, yes, if you get a crop failure from drought or these other things, there's crop insurance mechanisms for that. But there doesn't tend to be one for a crop to test hot. The other discussion was, is there anything that can be done with these crops that test hot, for instance, turning them into fiber, using them as fiber rather than CBD or whatever oil that they were going to be used for in the first place, give some sort of some sort of recouping the cost through another use that it doesn't include CBD or whatever else. Then another concern is consistency among testing facilities and equipment. The thresholds may not be changing, but there is some concern that one facility might have one testing set of test equipment. Another facility has another and the air margins and whatnot on these test equipment can be different or they can test slightly differently. And they want there needs to be, according to these folks, some research done to see what the consistency is among test equipment or set guidelines such that every all testing procedures be exactly the same, including the equipment. And then finally, and this one, this idea was kicked around a lot as the possibilities for use of hemp as animal feed, either the grains or the fibers. Fibers don't really make the best animal feed from what I understand because it's just two fibers, but the the oil seeds that are produced, the grains can that be used as animal feed or parts of the plant that are not used for anything else right now? As far as I know, it is it is not legal to do that. But that's some of the legislation that they are they're talking about and discussing with their lobbyists and folks in the Department of Ag. So with that, I will turn it over to Dr. Frank Olson, who I believe is up next. Thank you. All right, thanks, Brian. So I'm Frank Olson. I'm the crop economist and marketing specialist with NDSU Extension. I just thought today I would provide a little bit of a preview for the May USDA WASDE report, which will be coming out early next week. So my first slide to just provide an overview of kind of the background of this. The May WASDE report again, WASDE stands for the World Agricultural Supply Demand Estimates, is that's the first month that USDA and the World Board that oversees the publication of this provides their forecast for the new marketing year or the new crop marketing year. And in this case, it'll be 2021. And so this will be our first look into what is USDA looking at or forecasting for new crop supply and demand conditions. We've been so far to this point, we've been looking at old crop, the 2019-20 crop. We're now moving into the new marketing year. And again, just as a reminder for everybody for corn and soybeans, the marketing year begins on September 1 and runs through August 1. So that's the 12 month time period that these forecasts are for. For wheat, the marketing years from June 1 to May 31. Again, the time is a little bit different, but the information is basically the same. They're trying to track not only the production, the total inflow of grain, but also then the total outflow. USDA will also update, at least for the old crop portion, the demand side or the usage numbers. There might be some slight adjustments on the production side. USDA was going to resurvey corn and soybean farmers in several states with the exception of North Dakota to find out what their actual harvested acreage was and to confirm their average yields. But again, I don't expect those numbers to really be changed at all. This is really be an update on the forecast for the usage numbers. As a reminder to everybody, the reports always come out. They're predetermined. The time is going to be 11 o'clock central time on Tuesday, May 12th. You know, USDA gives us a calendar of when this day is going to be available. You can see it up to 12 months forward. So there should be no surprises on when the reports are released. Obviously, the contents of the report is what everybody's looking for. So on my next slide, this is just a quick summary of what's called the pre-report industry estimate. So some of the large agricultural news agencies, like Reuters and Bloomberg and several others, will do surveys of private forecasters and say, what do you expect the USDA numbers to be? And I want to emphasize before I go on any further, this is not these individual companies' individual estimates. This is not what they're estimating the actual number is. What these companies are trying to do is estimate what is the USDA number going to be. What do they expect the USDA information to look like? So these are actual estimates for what they think USDA is going to provide us on Tuesday. And because this is a little bit unique where we have both the old crop, the 2019-20 marketing year as well as the 2021 marketing year, try to divide this table up. So let's start with the old crop information first. The top row is the average industry estimate. That's the one in red. And if you look at the April estimate, which is the number in blue, so let's compare the red row to the blue row. And we look at wheat, basically unchanged. They don't expect the ending stocks. Now this is, again, the forecast for ending stocks. How much grain are we going to have in the bin just before harvest of the upcoming year, of the next year? So when we think about harvest of wheat this year, how much wheat do we think will have an inventory just before harvest begins in July? Again, primarily for winter wheat. And right now the average industry estimate versus what we saw last month from USDA is really unchanged. I would consider that to be unchanged. It's a rounding error difference. When we look at corn, the April estimate was about 2.1 billion bushels, excuse me, 2.1 billion bushels. The average trade guess is about 2.25 or 2.2, excuse me, which is really an increase in ending stocks, which to me implies that I think most traders and most analysts right now are thinking that the total usage of corn for ethanol production will go down again. That's about 130 million bushel difference, which seems like a lot, but there could be also be some cut in the forecast for exports. We'll have to wait to see. Again, this is just a private estimates of what they think the ending stocks number will be for old crop. When you look at the soybean numbers, again, I would consider those to be basically unchanged. Average trade guess versus the numbers we saw last year, they're not, doesn't seem that there's gonna be any big expectation in a change in that. But I would like to shift over now into the far right-hand columns, which look at the new crop numbers for 2020 as well as 2021 for that marketing year. And I wanna compare the new crop numbers with the old crop numbers. So again, these are forecasts for how much grain do we think we're having to be in just before harvest of 2021. So we're looking at year forward in time. And I guess this I think will signal some of the information that what are the traders expecting to see. So if we compare wheat for old crop versus new crop, the expectation is that new crop ending stocks for the new crop for this coming year, will go down slightly. And again, I think part of that is because we're gonna see a slight cutback in planted acreage and there's an expectation that we'll have more of a trend line yield at this stage of the game. I guess the one I think is causing some concern and angst amongst people is the corn number. So when you look at the forecast for ending stocks on corn in new crop versus the ending stocks of corn in old crop, there's about a 1.1 billion bushel difference, which is very substantial. And I'll go through the reasons for that in just a moment. So just hold off right now, but I just wanna show I guess the difference in expectations between the crop we harvested last year versus the one we're planting right now. And on the soybean side, it looks again, right now based on the numbers, we're expecting to see a slight cutback in ending stocks on soybeans. And again, there's a pretty substantial reason for that that I'll talk about on my next slide. Thank you. So how does USDA come up with the production estimates? So for some of this, we can anticipate because there is a process that USDA uses as they prepare this information. So for the production side of the ledger for new crop production, they use the perspective plantings report, which we got at the end of March. And they will use those planted acreage numbers. They'll adjust for the difference between planted and harvested acreage. But these will be the numbers we start with. And those numbers will not be adjusted until we get into probably July, because there's another survey of what in June of what farmers actually planted versus what they intended to plant. So the July USDA WASDE report then we'll update the planted acreage numbers based on the new survey. So this is really what farmers were signaling earlier this spring on what they intended to plant. And as we've talked about in previous sessions, those planting and intentions were based off of information in the marketplace before, really before the COVID-19 issues hit the market and we've seen the rapid adjustment. So right now, I'm very confident that USDA will use about 97 million acres for corn, corn plantings. Again, that's planted acreage, not harvested for soybeans, the 83 and a half million acres, and for all wheat, about 44.6 million acres. And then again, I put in last year's numbers just as reference, looking at a pretty large increase in corn acreage cutback. I mean, another increase in soybeans, but again, recognize we had a lot of PPE last year for soybeans and on the wheat side, a very small cutback from last year's numbers. The other thing USDA is gonna do is use a trend line yield that's been adjusted for planting progress. So they use again, historical long-term averages, they adjust for growth in trend line yields or growth in yield potential, but there's a slight adjustment they also make for how quickly are we planting the crop? And obviously if the crop goes in much earlier, we tend to have higher yield expectations or at least the potential for above average year versus if we have very slow plantings like we did last year, that yield forecast typically comes down. So I did wanna provide a quick refresher on what the crop progress report as that would release last Monday, it's as of Sunday. We'll get a new crop report again out on Monday of this year, excuse me, next week. For corn plantings, we're about 51% nationwide, about 51% complete in plantings versus 39% as a five-year average. On the soybean side, we're about 23% planted versus an 11% as a five-year average. And on spring wheat, again, this is nationally about 6% planted versus 16% as a five-year average. Now those fairly aggressive corn and soybean plantings numbers, a lot of that is really contained in two states which are the big corn states and soybean states of Iowa and Illinois. So if you were to look at a state by state breakdown, the Iowa Illinois planting progress has been exceptionally quick. And again, that's where we have a lot of our acreage and a lot of our yield potential. So I would not be surprised to see a trend line, an estimated trend line yield to be slightly above what we would have seen if we had had normal planting progress. So on our next slide, I talk a little bit about, how does USDA forecast the usage numbers or kind of the demand side of the equation? And this is really where I'm gonna be spending most of my time studying the numbers when they come out. So I wanna explain a little bit about the process before we get into the analysis portion of it. But what USDA does is it's based on, the demand side is really based on statistical forecasting. So they're using historical relationships, historical information and saying look, what are the trends? What are some of the relationships we see? And then they try and put forecast forward for the forecast, the total usage by category for the entire year, okay? And they do that for both the national level within the United States as well as the global level or the world level. And the reason they have to do the global stuff is primarily because of the export pace or preparing a forecast for US exports, which again, you have to take in the global dynamics as part of that. I just wanna emphasize, this is really a very complex process and it's very, very difficult to do well. There are a few private forecasters that will do their own forecasting. But a lot of the private forecasting firms, when they come out with an estimate, their own estimate, it'll be actually some more subjective forecasting. They'll use what was embedded in last year's numbers and they'll increase it or decreases on more of a subjective basis on what they think the new numbers would look like. So I just wanna emphasize that this is a really, really difficult thing to do. And there's a lot of firms that look to the USDA numbers as kind of that starting point. And I also wanna side note, I wanna emphasize that export levels are by far the most difficult to forecast accurately just because of all the moving parks and the dynamics. And I'm gonna come back to some stuff that we've had talked about previously that in today's world and the global economy with the concerns about COVID-19 and concerns about global recession, this is becoming more and more challenging as we move forward in time. So on my next slide, I also wanna talk a little bit about the 2019-20, the old crop. At this stage of the game, again, there will likely not be any major adjustments on the production side. This will be some adjustments on the usage side. Again, USDA is using these statistical forecasting techniques, but they're updating the information every month based on new values. And these are the actual values. So for example, when it comes to forecasting total exports, they use the historical or the actual export pace based on weekly export sales numbers and say, well, based on the trends we see right now, what do we expect the total to be by the end of the year? On ethanol, again, when they're using forecasting total ethanol use of corn, those forecasts revised based on the weekly ethanol production numbers so you get an idea of are we head of normal or behind normal. And then finally, another example of soybean crushing. Again, this is using the information that they have a survey of oil seed crushers to say how quickly are they crushing up the soybean inventory. So again, they're using real live data to try and update and make their forecast going forward as accurate as possible. So on the next slide, I tried to provide a brief summary of what am I looking for? What are the things that I expect to see? A couple of things. I think there can be a lot of focus on the corn usage numbers, not only in the production outside, but then on the corn usage numbers as well. We have three major categories for corn usage under the ethanol, I mean, under the USDA definitions. First one is ethanol. Again, the recovery in miles driven, I think is the greatest uncertainty right now. How quickly will people recover and start using it more gasoline? My expectation is that I think the ethanol number will be down slightly from what we would typically see. I'm not using today's conditions as that reference point, but if we were to go back a couple of years before all this came into play, I think there'll be a slight cutback because I don't expect USDA have the full ethanol, the ethanol mandate included. I think it's gonna be very difficult to get to the levels that we're talking about, even as we recover into the new crop year. On the feed side, a lot of that's gonna, the feed demand is gonna be influenced by livestock inventories and the herd size. Given the drop in meat prices, I know Tim's gonna talk about that in a moment. I don't expect the feed, the total herd size to change a lot, but we may see a slowing of the growth rate in meat production. Again, this is all forecasting this point and so it can be updated as we move forward. So I'm not expecting to see a big change in the feed number. The exports number, I think, is gonna be the biggest challenge just because corn, again, that hits the export market typically goes for livestock feed. And there's a lot of uncertainty now on the global market on what does that meat demand really look like? Again, given that we've seen a strong economic downturn at the global level as well as within the United States. On the soybean side, I'm really focusing on those export numbers. There's a lot of questions right now about this US-China phase one agreement and its implementation process and will China be able to live up to their expectations? Again, as well as the concerns about the global production of meat. My guess right now, my expectation right now is USDA as a rule, generally forecasts, exports, given current policy. So again, given what we know about current policy, they're assuming that policy will stay in place throughout the forecasting period. I do expect to include the impacts of a fully implemented phase one agreement. So again, those soybean export numbers may seem a little bit strong given today's information, but again, we'll have to wait and see. On the wheat side, again, exports in the wheat market is really the key pricing piece. Big question is, will USB price competitive? And again, a lot of that depends upon the slowdown or potential slowdown in global growth in this global demand base. And so again, a lot of uncertainty, a lot of unknowns. My last slide, I wanted to provide also just a little bit of insight into the, something that the trade analysts and traders will be also be looking at is, what do we expect to see out of production from South America? Again, I just wanted to have a reference point for this is what the industry traders and analysts are kind of looking at as an average versus what USDA has said last month. So the red line on the very top is the average industry estimate. The blue line is what USDA had forecast last month. So again, when we look at Argentina corn, basically I would consider that unchanged. So down maybe slightly as an average. On the soybean side, very similar. Either I would, my personal view is that's basically unchanged. Maybe a slight decrease. Brazilian corn is the one that's getting a little bit more attention right now. When you look at USDA estimate last month was 1.1, 101 million metric tons. The average trade guess is closer to 99. I know there's some concerns now about the Sofrina crop, which is their second crop that makes up about or what they call the winter crop, which they're seeding right now. Because there are some dry areas in Brazil starting to show up. And the Sofrina crop just as references approximately 75% of Brazil's total corn production. And so that does have a major role to play in kind of what their total production out of Brazil is going to be. On the soybean side, I think there's some traders that are thinking we would see a slight decrease in the average or in the total production forecast for Brazilian soybeans. But I do want to remind everybody that even if it gets cut slightly, if it goes down to 124 or 123 and a half, those are still very, very large numbers. If you look at the row just below the blue line, that's the USDA number for total metric tons produced from last year. So this would be basically two seasons ago. So you can use what we're expecting now versus last year's numbers. And as you can see on the Brazilian soybean column, the far right hand side, even with a slight cutback, the Brazilian soybean crop is going to be a monster. It's going to be very, very large, even in historical context. The last thing I just want to point out for reference just so everybody can get a benchmark for relative size. I also put in last year's USDA numbers for US production. Again, this has converted to million metric ton instead of billion bushels, which you're used to thinking in. So I just wanted to give you a relative size of the US corn crop last year, the US soybean crop last year relative to what we see in both Brazil and Argentina. And again, if you look on the far right hand side, the size of the US crop last year, even though it was cut because of a lot of prevent plant, is still considerably smaller than what we see coming out of Brazil. So Brazil has grown into a major, major powerhouse on the soybean side. And with that, I'll hand things over to Tim. Okay, good afternoon, everybody. If we go to my next slide, we'll see that most of the calls I've been getting are really two-fold this week. One is, are we gonna get a payment? What's going on there? And so I kind of talk about that and do some other issues as we go along. And a lot of issues in the livestock industry now. And so we are gonna touch on those with another webinar. So to begin with the coronavirus food assistance program is supposed to put $5.1 million into cattle producers and so on and some more for hogs and dairy and so on. And expectation the president wanted to get this through as soon as possible. But as we've been saying all along, it's a monumental task that USDA has to try to figure out how to distribute all this money. And we've talked about that in previous webinars, 85% compensation for cattle sold from January 1st, April 15th and so on. Our cow is gonna get paid and all those things we don't know about. But here's the progress. Our USDA on Tuesday of this week, as you see in the red at the top did send the final proposed rule to the OMB and the office of management budget. They have two weeks to try to figure out where all the money's coming from and how to do it and so on and get a rule set up they have been working with USDA. So the anticipation is that they won't take the full two weeks and in fact, some saying that it could come out next week. On the bottom, one of the consternations in the livestock industry is kind of not, you know, on the same level on this, there's a question. The law when it come out didn't put any limits on individual producers but the farm bill has limits on individual producers and so the question has been will USDA raise those cap limits or not? And so the next one just yesterday, Secretary Perdue was in a meeting and he said that payment limits would be increased but if you go on through down there, I'm just skipping ahead. He said we've adjusted these payment limits but we'll have to wait and see when the rules come out or when they are. So that's about all we know for that on the next one. Again, Senator Hovind is saying that there's interest in adding even more money to the commodity credit corporation for them to use, you know, on the crops and livestock side. On the packing side, again, I could talk for an hour on this and plants and so on but I just wanna kind of summarize. All beef packing plants that were closed have reopened but we had one closure this past week, Cargillus, Skyler, Nebraska, the plants that opened, Tyson opened their plant in Washington State and Dakota City and JBS opened their Green Bay, Wisconsin, Agrily plants and then a smaller plant in Aurora, Illinois opened up and then the national plant in Tamayo, again a regional plant. So we're, you know, back open, the bad news is that, you know, they're not at the capacity they were before they closed with all the distancing and so on but got some plants back going and if we go to the next slide, I'll just finish up by the, you know, the hog plant and our two closest plants in JBS and Worthington and the Smithfield in Sioux Falls are back open but at a much reduced capacity. So, Frayne talked about exports a little on the grain side and so the new report for meats just came out again just to review a little bit that we do have record production of beef, pork and chicken and so exports are important and we were expecting record exports of US for sure, beef and pork, maybe not chicken but more above last year. And so again, the problem with this is it's a little bit dated, it just came out this week but it's the March numbers and so far in March on the top left you see that beef and exports were quite a bit above last year and on a record pace and however, I know both on beef and pork some anecdotal evidence in the last couple of weeks one, of course our wholesale prices have increased and then, you know, some other problems with those higher prices it limits other countries ability to buy. So we'll have to see the April will likely come down whether they'll come down to last year or whatever is we'll have to remain to be seen on the pork export side again, we're just going gangbusters there started in last fall and November and greatly ramped up pork exports at just all time record high, you know not quite double what they were last year but really, really high more on that in a minute of where it's going on the bottom left then is where is our beef going? Japan is usually our best market and then, you know, Korea, Mexico and Canada and so you see in that square box, blue box there last year our exports to our number one exporting country of Japan kind of fell off while Korea picked up and so there were quite a few months where they were at the same level very good reason for that because we settled our trade agreement with Korea early in 2019 but we didn't settle with Japan until the end of the year in fact, our new trade agreement with Japan became effective on January 1st of this year and so, you know, since the new agreement with Japan you see what happens they're back up quite a bit higher than they were and, you know, a really good market for us and back up above Korea on the right hand side again, as pork exports obviously, you know, there again it's Japan and Korea and Mexico and so on but which we're all holding fairly steady but the big increase China was number four and they have just skyrocketed into the number one place in taking pork from us because of their significant downfall 25 to 40% reduction in their pork and so they're needing a lot of pork there is, you know, some complaints by consumers of why when I go to the grocery store can I only buy one package of pork or whatever and whatever and when we're doing all kinds of gang buster exports but again, it's similar to, you know there are plants geared up for exports just like there are plants geared up to provide meat to restaurants and there are plants geared up to provide it to retail stores and it's hard to make the switch, you know we have a hog plant on the east coast that just does pork into carcasses and ships it to China that way they don't break it down because China wants carcasses so they can cut it the way they want to and they've got cheap labor and so, you know, those carcasses that could not find easily a home in the US side because wholesalers, retailers here want to buy boxes of hams or loins or ribs or bellies, whatever it might be so go to the next slide just want to give you an update again like I usually do on the markets USDA again reports auction markets at when we're going full blast particular in the earlier in the spring and in the fall at West Fargo Napoleon, Mandan and Dickinson and this time of the year they stop reporting when the markets receipts fall way down and so last week actually only Mandan got reported and but, you know, that's the base that we have to go by and, you know, prices for the lightweight cattle in the box there still selling about what they were last year at, you know, fairly decent levels given all the pandemonium that we have going on there, you know, a 570 pound steer that bring 160 is $925 so, you know, that's for most producers above the cost of production at about a normal level and again, we've always been talking about these 750 to eight weight down with the next box or on the average, you know about the same as last year up about a dollar so but, you know, now with planting going on and even harvest of corn, you know, our receipts are dropping off like they do usually seasonally when we get rid of the last background cattle so go to the next slide is the, just the slide that I've been showing before and again, how the cash market is doing for the 700 to 800 pound steers that we have the most of rather than the lightweight the big news there is from last week again, the cash market is at red line is just about the same but the big news is that the futures market last week was quite strong went up $10 our May futures last week and I talked to you were 120 and yesterday were 130 and then the fall futures that were 130 last week are up to 140 so fully a $10 increase we had two strong we had a limit movement on Wednesday so we had expanded limits yesterday and so quite a move up there interestingly enough November feeder cattle now are the same price that cash feeder cattle were in North Dakota last week so, you know, quite an interest there and if we go to my next slide then that has sparked some interest in livestock risk protection I had several calls of why is an LRP being offered and some other issues so just cover that when the feeder cattle and or fed cattle move the limit then LRP is not offered and so again, we had both in fed cattle and feeder cattle limit up or expanded limit up movements on Tuesday and Thursday so there it wasn't offered today the market has been down last I looked down 50 cents to a dollar and so that would mean maybe that the LRP for cattle would be offered lamb LRP has not been offered since March 30th over a month there because of insufficient price reporting there isn't a futures market for lamb so depend on the cash market there to do that and very limited lamb trading has caused that to be done so I think with that that is probably the end of what I had to say and oh, one more, yeah one more important thing all this a lot of talking in the beef industry about different things like imports and exports and packer profits and how can we get more local meats out and mandatory cool and all that so we've set up a whole series of webinars to address those issues in detail along with Texas A&M and West Virginia so here's the schedule we did the first one last night where we just did an overview of cool and imports, exports, packer profits and then we're gonna hit them in depth so feel free to log on to those webinars next week in depth on cool and imports, exports and then on Thursday on packer profits and you can read the rest on down so in depth on what all these issues that are being discussed in the beef industry now and what's the scientific evidence there so I think then with that I'm through and we'll turn it over to Ron to give his update Good afternoon, Ron Halbin Extension Farm Management with NDSU and I wanted to talk a little bit today about the IRS updates and the PPP updates the Payroll Protection Program so my first slide, getting to the PPP updates the Treasury Department has said that businesses will have till May 14th to pay back any PPP loans if they had other adequate sources of liquidity so they're trying to crack down on some of this abuse that had happened they did have the date set at May 7th but they extended it to May 14th so there's some businesses that probably could have gotten by without getting these loans they had other sources and they're starting to crack down on that so the last allocation that was put in for the PPP loans was that 210 billion and of that 175 billion has been used for approximately 2.2 billion loans and if they get some payback from some of these larger businesses that pool will increase to make allocations to other businesses so my next slide I'm gonna talk a little bit about the taxation of PPP and as always these regulations and laws and are changing by the minute and just as I was preparing this presentation I just found out that Congress is working on some other legislation here and I'll get to that but the IRS just on May 5th passed a notice or prepared a notice number 2020-32 and what the IRS says that if you have gotten a PPP loan and the unforgiving part, the loan part then you can still deduct the expenses that you paid from those proceeds just like any other loan you may have gotten the loan may be borrowed you may borrow money as a loan and pay your expenses but anything that was forgiven you need to go through the hoops of course to get the loan forgiven or parts of the loan forgiven there is no deductibility of these expenses allowed from those proceeds and that's the IRS double dip rule because the CARES Act had already said that money from the PPP would not be for the forgiveness would not be taxable typically any loans that are forgiven that amount needs to be tax would be treated as taxable income with some exceptions for insolvency insolvency and things like that but so just this morning then Congress had put together some bipartisan legislation Senator Grassley was just adamant saying we wanna fix this problem we wanna override what the IRS has just said so that you can deduct your expenses even if some of your loan was forgiven and so it's just a matter of time they said they were gonna put that fix into the next COVID bill or maybe some other legislation and get it through very quick so that's the update on that the next slide I just wanted to get into a little bit about the payroll deferral all businesses as I mentioned here in a few weeks ago they all businesses are eligible for this payroll deferral whether your business has been drastically affected by the COVID or not but any payroll deferrals are you can defer from payroll paid from March 27th to the end of this year and what you can defer is the employer part of the social security taxes that's 6.2% you cannot defer the 1.45% Medicare tax for self-employed there was a little more guidance on this now 50% of the 50% can be deferred now of your total deferments for the year 2020 then 50% of those deferments you don't need to pay until December 31st of 2021 and the other 50% you don't have to pay till December 31st, 2022 but the thing is if you defer them that long and some businesses which are on dire straits right now may not even be in business or maybe in more dire straits they might not have the ability to even pay those deferments and then you'll probably be in bigger trouble but my main point I wanted to get to on this slide though was on PPP loans that were forgiven that were used for payroll then you are not eligible for that payroll tax deferment after the date of forgiveness so if you go through all the hoops and get your loan forgiven or partially forgiven right at that point you're not allowed to take part of this deferral program and so any payroll paid after that forgiveness date cannot be deferred but if you deferred payroll before that date that will be continued that will continue to be deferred so with that that's all I had for you today just a few updates on the PPP and the IRS and with that we'll go on to Dave. Thanks Ron. Dave Ripplinger, Bioenergy Economic Specialist just some really quick remarks about what's going on in the biofuel sector again focusing primarily on corn ethanol what we're seeing is a slight recovery an increase off the bottoms for gas and ethanol use gasoline supplied as of a week ago was up 30% from its low at the beginning of April which is very good news unfortunately it's a bit of a mixed bag for those of us here in North Dakota with an announcement from Great River Energy yesterday about their plans to shut down Coal Creek Station which has a coal located corn ethanol plant Blue Flint with it a little bit of uncertainty of what will happen with Blue Flint and that refinery in terms of obviously corn purchases which would be our interest at the same time with that announcement Spiritwood Station which is the plant just east of Jamestown they announced that they would be converting from lignite over to natural gas you know with those plans in place you expect that Dakota Spirit corn ethanol refinery would stay in operation bigger than that or in other things we're definitely watching as those crude stocks are continuing to build not at the rate that they were and again looking particularly at Cushing and WTI to see exactly when they might run into some problems logistically and then also kind of big news international news because of its severity is we're continuing on this track of seeing a number of North Dakota oil wells being shut in the expectation is in the next few weeks almost all of them will be we're at least a third of the way there in terms of numbers as well as production that we would have had online six weeks ago with that just basically continuing given the current economics of production here in the state and obviously going along with that too no new development the rigs numbers are continuing to fall going back to a slide kind of similar to what I had a few weeks ago first I'll talk about the chart itself and then the table within it the red line is gasoline supplied has a certain scale on the right hand side and then ethanol production and input are the blue and the yellow on the left hand side and basically where you can see as we go back to the start of COVID is this precipitous drop really really in tandem with one another in terms of use primarily or supply as we call it as well as production not unexpected again as ethanol essentially finds its home domestically as E10 so as gasoline pushed out to ethanol refiner's decline or excuse me it was pushed out to to racks and to retailers as that declined obviously the use of ethanol fell with it production alongside already mentioned there's been a really strong recovery in gasoline off of its bottom in the last two weeks the big question now is will that continue just looking at the calendar we'd expect that it would as we move into summer driving season of course the question is how much are folks gonna drive relative to previous years you know we still have shelter in place in much of the country a slow recovery affected incomes so a lot of leisure travels gonna be offline but we would expect that number to continue to grow on the gas side and ethanol in tandem with it going back and kind of looking what this means for profitability for ethanol refineries again looking at those South Dakota ethanol prices which USDA reports on a daily basis if we look from about a month ago where we were at to today we see lower corn prices higher ethanol prices and lower distillers grains prices with a net increase in crush of about 20 cents which is definitely sizable for refinery so things are moving in the right direction and so we kind of have simultaneously good news as plants are coming back online or just increasing their crush as well as their profitability and again there's this expectation that if that continues for the next few weeks that we'll continue to see more ethanol production as well don't have the days in stocks this week for ethanol but they're continuing to decline as we see that use increase My only other slide for today is just talking about oil stocks and again just kind of looking at pushing and where we're going we're basically at 83% full down in pushing come a long ways gone from about 36 now to 63 billion barrels in storage which is a massive amount of fuel has slowed down a little bit which is good or at least the pace of increase in stocks especially in pushing is decreasing and also the same across the country so that's good and also if we actually look at the use as use is picked up that the actual days in stock so that would be stocks over use as declined for the first time since the start of the crisis and so again a bit of optimism there but there's still gonna be this pushback we still have too much production of crude oil we're still refining the refiners are definitely it's throttling back their purchases and then we really have to wait to see just how much gasoline is used this spring and again this goes back to Frane's thoughts too I mean this is really kind of the big question but in general things are moving in the right direction so with that I will move on to questions and I saw that we had a few of them already and again if you want to use it says chapter please use the Q&A function this week and we'll try and get through those and I'll go ahead and start moderating those but feel free to continue to ask questions as they come to mind and so first thing to talk about would be and this is actually a clarification issue for Brian I believe going back for the Purdue Egg Sentiment Survey was there something that happened in April of 18 that caused sentiment to drop? Kind of a pretty in depth question if you have an answer for that one. Yeah, thanks Dave. I responded via the chat but I'll just go ahead and say that when we were heading into the summer of 2018 what was ramping up and that was the trade dispute. We know that there was discussions of it there was talk about it and a lot of that stuff really came to started to come to a head there in June but sentiment on trade tensions really started ramping up that early part of 2018 and I believe that was reflected there in the sentiment for ag headed up to that point was what was going on in politics and the geopolitical sort of trade situation that in hindsight folks were right to be worried about it but that period that April, May, June period was some of what was leading up to that. And the other thing that was happening in 2018 was rising interest rates. That was something that was going on we had rate increases in 2018, several of them so and toward the end of that year we also were worried about them headed into 19 as well. So I think that that had a lot to do with some of the poor sentiment and then of course the commodity prices weren't all that strong so there were several things going into it all at once and if Fran wants to add anything to that or Tim that'd be fine too but that's probably the biggest driver between that low sentiment in 2018. Thanks Brian. Another question obviously for Fran, pulse crops you know are they included in the WASD? They're not really traded. Well, there's not a futures market for pulses. So what's the difference? Yeah, so yeah we do not, we don't have USDA doesn't do any forecasting or anything formal for the pulse crops on the supply demand side. The WASD report was created many, many, many years ago and it follows kind of what we would consider the traditional feed grain and oil seed and food crops. So it would be the feed grains, corn as well as barley, oats, sorghum. Obviously they have the wheats and actually have some information broken down by wheat class. They also have the oil seeds primarily soybean. They also have cotton and they do a little bit on rice. So the WASD report really covers kind of those long history crops we have in the United States. Nothing for the pulses. The fact that there is or is not a futures market really doesn't dictate which crops are included. It's based much more on history. For example, there's no futures market for barley here in the US. There is one in Canada but not here in the US but yet we still have information on barley. There's no futures market for sorghum, grain sorghum but yet we do have supply demand conditions that USDA puts together for grain sorghum. So short answer, there really isn't a strong correlation between USDA numbers and whether there is or is not a futures market but there's definitely not information on the pulse crops. It's very difficult to get supply demand numbers for pulses. It's just a really, really tough thing to do. Great, thanks, Frank. I will make a plug for an upcoming chamber event here in the Metro. It's a virtual event sponsored by the Fargo Moorhead, West Fargo Chamber on the morning of the 12th next week. They're having an egg focused event and you can go to the chamber's website to learn more about that. So it's fmwfchamber.com. Just to make a plug to you, NDSU is a proud member of the chamber as well. If there's no other questions, I wanna thank you for participating and let you know that we do have, that we did record this and we'll make both the recording and the presentations available online at the URLs on the screen. And if you do have any other questions, do feel free, have any feedback first. Excuse me, please go to the URL on the site and give us some feedback. It is much appreciated and helps guide our programming with NDSU Extension. So with that, I wanna- Yeah, there is another question for you about Great River, Dave. Okay, where's- Do you have any details on if Great River will sell the power plant so it keeps running, is the question. Yeah, so is somebody gonna buy Coal Creek? I would be surprised. The economics for Lignite have been very challenged for quite some time. And unfortunately, they've continued to, they've been under duress and the COVID has been in many industries is really just an accelerant. There's been a decline in energy use, in energy prices and the trading price of power to some extent. And it's really a longer term issue. And I would be surprised to see if anyone does make an offer. And obviously that's bad news for the state is there's a number of the individuals who worked there and who worked for the associated Falkirk mine. The Spearwood Station was announced yesterday and I have no reason to think that anything would happen with that. It's a newer facility. And it's actually kind of one of the shames too about both blue Flint, especially about blue Flint, but also Midwest egg. They're very efficient, well-designed corn ethanol refineries among the most efficient well-run in the country in terms of downtime. And it would be a shame to lose those in general because of that. And then obviously, of course, in terms of corn use. But going back to the original question, I would be surprised that there's a buyer, but obviously can hold out some degree of hope. And again, they did mention in their press release and other discussions that it was on the market, they were trying to do that. Okay, then in the chat, there's one, whoops. Yeah, and so this is a question from Cody down in Wishick. Let's see here. Thoughts about the, yeah, the underlying recession, doom and gloom regarding COVID. What are we thinking about long-term? And like, Brian, I don't know if you have a response you want to summarize again what Cody's thoughts are. Well, that's a lot there in that question. I'm kind of reading it here. Let me see. Inverted yield curve near full employment without wage growth. In curiosity. Okay. The underlying recession, doom and gloomers before COVID. Well, I think a lot of that actually stemmed from the fact that we were in one of the longest bull market. No, not one of the longest bull market of all time since it had been recorded in terms of number of quarters and months before recession. Now, recessions do happen, business cycles do happen and there are indicators that can predict them. They don't predict them, what they call leading indicators, things that occur before a recession happens and that let people know that, hey, this is what's coming. And like Fran would say, and him and I have talked about this, the recession and the likelihood of it coming for a long, many times, indicators are just that, indicators and you have to take all of them into context and evaluate everything before you make a decision. In other words, the inverted yield curve thing, I gave a lot of talks on that over the last year or so. And it was a little bit of an outlier and one of the things that was happening with that was there was a lot going on globally in terms of, well, stagnant economies and negative interest rates and a lot of foreign investment was drawn into T-bills and T-notes and when that happens, obviously it's a supply and demand thing. If demand for T-notes and T-bills is really high, then the yield on it goes down. If demand is high, the price goes up, the yield goes down. So you can have inverted yield curves without any underlying concerns with the U.S. economy because of what's going on abroad or first for whatever the other reason may be. Now, if U.S. investors were flocking into these T-notes and T-bills and those kind of things, that'd be one thing, but that really wasn't the case. There wasn't a huge increase in that. It was mainly foreign investment because you had negative rates and other things in Europe. And then the near full employment, that in and of itself doesn't pretend anything negative other than that we had near full employment. In fact, that's actually a good thing. And so there really weren't any underlying economic factors besides an inverted yield curve and fears of a, the fact that we were in a long bull run or bull market to be concerned about a looming recession. And we kind of saw that happen as we turned the corner headed into 2020. Now, obviously we are going to be in a recession now or we are in a recession now, which will show from the first and second quarter, but I don't think anyone predicts, can predict pandemics. In other words, back in November, nobody thought there was going to be a pandemic. So, it's going to history is gonna show a recession like clockwork, but the reason for it was not economic. Unlike the financial crisis that we had 10 years ago, that was a economic and financial fundamental problem in the system that there were warning signs going into it before the whole house of cards collapsed. This isn't like that at all. We literally shut it down, not some sector or set of sectors or portions of the economy went under. This was to use the lack of a better word, artificially induced recession because we literally just shut the economy down. I mean, just shut it down. Never before been done to my knowledge in US history ever. So, I guess I don't know if that answers your question, but it was a lucky half course shot. Basically, that's what it was. Yeah, I mean, an inverted yield curve, it would be like saying an inverted yield curve predicts pandemics. That's just not true. And the reason that it inverted is not the reason that typically happens before we wind up in a recession. In other words, it wasn't because US investors were leaving equities and flocking into the safety of T-notes and bonds. It was other countries were doing, were kind of going there because there was some fluggish and stagnant growth abroad. And that's really what it amounted to in that case. And home prices weren't lagging and sagging and employment was strong. So, yes, it did, an inverted yield curve did precede a recession by about six, eight months. But I think that that's pretty much coincidence in this case. Question for you, Dave, do you see that about how do they get natural gas to Jamestown? Yeah, so that's a great question, yeah. The question is, how are they gonna get natural gas to Jamestown? Yeah, right now, the pipe along interstate is not large enough to support a generating unit of that size. They'll have to build something. There's been a lot of discussion in the past been involved in development work with Spiritwood Park. And so, maybe a little bit of silver lining in this is as they build that pipeline across the state from Bismarck or so over to Jamestown, Spiritwood, that there will be opportunities for economic development in that area. But again, yeah, that pipeline will have to be built, which is not an inexpensive proposition, but obviously there's a very valuable asset at Spiritwood that Great River Energy wants to make use of. So that would be part of the deal. And maybe again, silver lining, that's a major infrastructure project and would mean jobs and all of that economic activity for the state. And so if I do double check, right? I think that we're through our questions and our chat. And so once again, I wanna thank the panelists for participating and Scott Swanson with A Communications for providing IT backup and all of you for joining us here today. Again, if you wanna check out the recording or the PowerPoints or the presentation, we're gonna have those posted shortly. And then of course, if you do have time, please provide feedback because it is greatly appreciated. And with that, I hope you have a great weekend. Thanks.