 Well, it's just after one o'clock And this is our January situation and outlook normally Dave Ripplinger is kind of emceeing this for us for the most part and has been for a few years We've been doing it, but he's on the road out Spread knowledge to the state We have our usual panel of presenters Including myself as well as Tim and and Frayn however Frayn is going to be doing his via Recording as he was He's busy out, you know, he gets pretty busy this time of year on the road So his will be a recording that he prepared for the outlook today. So I'm gonna go ahead and get started I'm just gonna talk briefly about the fertilizer update and outlook Heading into this spring Something I've been talking about and tracking now for several months and a lot of a lot of folks wanted to know What's going on with that? So this isn't gonna be in great detail, but just sort of some of the information we have as a stand So a report came out not long ago From the world bank on some of the global things that are going on with fertilizer production and supplies and Essentially one one of the things The background is natural gas prices and energy prices and Dave Ripplingers talked about this many times They were really high in europe and have been high for quite a while And somewhat recently started to come down some but as of october of 2022 70 percent of the ammonia production capacity Was halted due to due to these high prices in europe and again prices of yeast some recently which some think Is going to bring some of that that production capacity back online And and the reason I bring up ammonia so much is because uh and talk about it in nitrogen fertilizer It's certainly sort of the precursor for all the nitrogen fertilizer It's the the building block for whatever Is being produced as far as that goes And so as I've told folks in the past Fertilizer is a globally traded commodity now and a lot of the price that used to be Um hint solely on natural gas prices It does still have a lot to do with it and rising natural gas prices certainly as high as they've been Puts upward pressure on fertilizer But so does global market conditions concerns over exports Concerns over the conflict in in russia and ukraine And then as well as what's china doing with the halting exports and shutting down some of the phosphorus production other things that they've done and so Though the conflict with in russia Uh, they they had a there was a carve out in the sanctions that were put on them that allowed fertilizer exports to continue But belarus has still reduced potash exports by 50 percent or more So just to put into perspective how big of a player russia and belarus are in fertilizer In ukraine for that matter in fertilizer exports in the world If you look at urea russia makes Just over exports just over 15 percent of the world's urea and As far as ammonia goes just over 30 percent of the world's ammonia exports actually comes from russia As well as sulfur which goes into a lot of other products as well And then they produce about eight percent or export Roughly eight percent of the world's dap and then ukraine also exports You know around five four to five percent of the world's urea and then you have belarus who puts out a lot of the Mop as well so The conflict that occurred in this region And is still ongoing obviously had a big impact on folks concerns on what was going on with fertilizer and How that was going to impact supplies and the ability to secure it Then we look at china and as I said on the on the world stage china Is a big exporter of dap they export 30 percent of the world's diamondium phosphate And that fell by 50 percent and then your urea exports declined by 60 percent last year So the blue line is 2019 to 2021 from january through december's cumulative million metric tons exported Of fertilizer of these products and then the red line is 2022 and you can see significantly less and one of the things that they did was they they had them basically a band so to speak on exporting Phosphorus out of china that was they talked about last summer it kind of ending last summer Well, they extended it all the way through to december doing sure they had the supply needed And and obviously having a major impact on global supplies And then so when we talk about prices in the us and that's what i'm going to talk about here here in just a second We do produce pretty much all the ammonia that we need and nearly all the phosphorus that we need in the united states We import all the potash that we need Pretty much all of it the good the good news is though we get 75 of that from canada so Our supply of fertilizers is pretty safe As safe as it is just about anyone in the world. It's just that We're subject still to world prices and a lot of the these other countries brazil for instance argentina large agricultural countries Are not independent in terms of fertilizer acquisition india as well And so the the global price winds up going up and then our fertilizer Distributors because it's globally traded commodity our farmers here in north dakota and the rest of the us for that matter subject world prices The good news is though we've seen some relief on fertilizer prices the the graph on the left Shows the different nitrogen products in cost per pound to end urea being the red one which we use the most up here in north dakota and hyders is green uan's 2032 or orange blue And that has come off like urea to start last year was around a dollar ten per pound of n so Uh, it's come down below 90 cents. So off lower by by nearly 25 percent 20 Lower on the urea market, but still and i'm gonna show it in a minute way above the five-year average potash I mean it It was three hundred and seventy five dollars a ton. That's the five-year average for april and Uh This year Or or 2022 it was clear up to almost 900 dollars a ton It's come down some but still 800 dollars a ton right now, which is the cent more than double the five-year average so Down some but Again holding that holding that pretty high And if we look at urea and starter fertilizer urea peaked last april at at over a thousand dollars a ton It's come down to about 750 dollars a ton And then starter fertilizer came down pretty sharply last fall And went from a high of about 900 dollars a ton last spring starters about again around 750 dollars a ton Also, but you look at those gray dotted lines near the bottom of the graph That's the five-year average And so typically this time of year if you go back and and and you see how the great gray line picked up That was because the prices were so high last year But you go back February Typically we're looking at urea low a little bit below 400 bucks Still almost double that and then same thing for starter fertilizer And then our phosphorus products dap and map About 975 dollars a ton or so for for 875 for map and about 900 925 for dap And so they've come off their highs too those those were both well over a thousand dollars a ton last spring Coming down in that 20 percent But again still Double what what we would typically see on that five-year average So some relief compared to a year ago But those who were thinking that fertilizer prices were going to come crashing down last summer and into the fall That didn't really happen now A 20 percent or so decline is not insignificant I know As producers we would like to see it a lot lower than that but you can imagine This is kind of what some of the co-ops were concerned about if you go out if they had bought let's say Urea at 1100 a ton and it comes off 20 percent in a few months When we're talking about numbers that big let's say it's a thousand dollars a ton They could lose up to 200 dollars a ton on that going from a thousand to 800 bucks And if you got several unit trains purchased of urea and you're sitting on it now I bought it for a thousand and now I got a salad for 850 I mean that was enough to Break some of the especially the smaller ones and that's that's some of the issues that that they were concerned about But so far Not not it's been a pretty slow gradual decline. So no bottom falling out or anything like that And typically this is when we see December or so the least expensive fertilizer of the year and it tends to ramp back up in cost as we as we approach spring planting so I wouldn't be surprised to see some of these prices go up in the coming in the coming months As as planting ramps up because a lot of the issues That existed last year They're kind of something a lot of them are still there Again restricted exports from china conflict in ukraine in between ukraine or russia hasn't really resolved and Commodity prices are still strong. And so you have those factors going in and there's just no Not not a lot of resolution to any one of those three things that are supporting them staying as high as they are So I just wanted to show Uh, so those numbers I showed on those charts come from those are national averages We don't have data for north dakota yet not enough purchases that have have occurred to actually have btm Give you an average, but I just wanted to show some of the somewhat neighboring states of east made purchases Uh, so the national average anhydrous price was uh, $1,300 a ton Uh without south dakota not enough purchasing the data of minnesota almost $1,400 is what it was selling for in Nebraska 1,315 $1,315 per ton Then we could go to urea south dakota almost $700 a ton minnesota closer to 850 in Nebraska 750 and then A map products in dap 910 almost $900 a ton for either one Potash $775 A ton as well. So those are those are more state by state And and and we get more data as the spring ticks goes along and we get more more actual purchases So these are actual purchases not not projections or anything like that They go back and they look at the week before whatever the average They talk to several distributors and co-ops or whatever and then you get those prices So one of the things Uh, we have uh, we have a faculty member dr. Dave franzen. He puts out a lot of information on Fertilization rates and how they compare How they the relationship that and commodity prices as far as fertilizing at what rate And and many other recommendations If you don't want to try to remember this long website link that I pasted here You can just kind of google ndsu extension fertilizer and it'll pull up the page with all the information that those folks soil scientists Put out on fertilizer and the other thing i'll plug is our crop compare tool That we we use at ndsu And and that's something that you can use to kind of put in your own costs What or what you think you're going to have to pay for these products per acre Then look at your projected yield and what you expect to get in a commodity price and try to see you know, maybe if planting One crop versus another for instance beans versus corn or wheat versus corn wheat versus beans, etc To see which one may have based on what you think commodity prices are going to be in your production costs are as well As yields which one is is possibly going to pay out The most for you or have the big of best net of any of those Good afternoon. Uh, this is train olson. I'm the crop economist and marketing specialist with ndsu extension. Uh, unfortunately I'm not able to join you live today. I'm traveling So this is recorded But if you do have any questions or have anything later on Please feel free to reach out to me and i'll be happy to try and answer the any kind of questions you might have So again, here's my contact information If you do think of something later on and you want to visit about it I'd be happy to do that So usda gave us a major data dump. Uh, we had four major reports that came out this morning We had the monthly update for the wasdy, which is the world agricultural supply demand estimates Looking at both domestic and global production and usage consumption We had the annual crop production numbers, which is our final estimates for planted acreage harvested acreage and Uh, total production total bushels produced for the major commodities We had the winter wheat seedings report, which is the first survey based estimate of farmers seedings for winter wheat And finally we had the cordial grain stocks report, uh, which gives again is a quarterly or every three months Survey of inventories both arm farm and off farm of the existing available supplies So i'm going to go through each one of those very quickly So we'll start out with Uh, the production numbers now this would would be for the united states Uh, the heat numbers we got earlier in the small grains report But this would be give us the final numbers then for corn and soybeans Um, the row on the very top in blue is the average trade estimate So that's what the trade was expecting to see out of the crop report Um on the very towards the bottom it highlighted in black is the numbers we got in november So that was the last official numbers coming out of usda And of course the numbers on the very bottom in red are the numbers we got today So what I do what I do is kind of compare the numbers we received today versus what the market was expecting to see Okay, so let's go through these very quickly for corn We got about 13.73 billion bushels of production Which is actually lower than what the trade was expecting They were seeing they were expecting numbers very similar to what we saw in the november report now that reduction in Total bushels produced is a combination of a slight increase In the yield if you notice this 173.3 versus what the trade was expecting at 172.5 But also a reduction in harvested acres So there wasn't quite as many acres harvested for grain production We don't know exactly where those acres disappeared to my suspicion is We had a little bit more corn harvested for silage than was first expected so some of those especially in some of those drought areas In the western corn belt and my guess is that some of those those acres that were originally intended to be harvested um For grain turned out to be harvested for corn silage instead. Thus the reduction in harvested area On the production side for soybeans. We're looking about 2.4.27476. Excuse me billion bushels slight reduction from what the trade was expecting and the numbers we got last month Most of that was actually a reduction in yield So the largest portion was a reduction in yield for the national average yield estimates We also had a slight reduction in the area harvested but again, most of that was in the yield numbers so Again, we're doing the official counting now or cross checking with not only the survey based information from From farmers through nas the national ag statistics service But also cross checking those numbers at least cross validating those numbers with the rma data from crop insurance As well as the data we get from fsa, which is the farm service agency for farm program analysis All right. Next would be the ending stock. So how much did our expectation for inventories the amount we're going to have in at In the bin just before harvest of next year. How did that change? Small reduction or in in the available supplies for wheat There was a slight increase in the amount of wheat going into the feed channels Thus the adjustment so a slight reduction from what we saw last month The trade was expecting a slight increase On the corn side a most of that reduction from what we saw What the trade was expecting to see but also from last month It was a combination of obviously a reduction in total production But we we also had an adjustment or reduction in the consumption port with portion with about 150 million bushel decrease In exports and that's been something i've talked about before that so far our corn export pace Has been relatively slow compared to last year in the previous years at this time of year So the fact that we saw a slight reduction in corn exports was not Unexpected the unexpected portion portion was actually the reduction in the production areas On the soybean side when you look at the numbers we got last month versus the numbers We got this month as well as the numbers that the trade was expecting trade was expecting a slight increase In ending stocks, we actually got a slight decrease in ending stocks primarily because again of the reduction in the production numbers there was a reduction in in the Crushed oh, excuse me the export demand for soybeans um to compensate for again some of those tighter supplies um and and I guess Given what we see right now today I think a lot of that is not our current export pace But actually what they anticipate the brazilian harvest being a little bit earlier than normal And therefore some of our the window for our export export season is going to be a little bit tighter and shorter than we would normally see So thus expecting adjusting our expectations for total soybean exports this year Looking at south american production. There were some adjustments made Several of those were anticipated. So let's go through argentina first argentine corn Last month. They had 55 million metric ton production. There's to be total corn production out of out of argentina dropped down to about 52 million metric ton, which is very close to what the trade was expecting soybeans again a pretty significant reduction in Uh in expected soybean yields and soybean production out of argentina. Obviously, they've had some very very dry conditions They're coming into their third year of continuous drought And so total soybean production was expected to be down Again very similar to what the trade was expecting But a little bit more than than I think I was anticipating We are expecting some of these reductions to occur, but there's coming a little faster than anticipated On the brazilian corn A slight reduction in corn And I do think some of that is because of the first crop corn and some of the drier conditions showing up in southern brazil But again very small changes It's a little bit early to try and put a solid number on brazilian corn as well as brazilian soybeans now Notice that there was a slight increase in in brazilian soybean production estimates USDA's been kind of flip-flopping back and forth between 152 and 153 for the last several months So I guess this is not into not a major adjustment It is some fine tuning. We'll have to wait to see obviously their weather conditions over the next month or so We're going to have have big big implications for the size of the soybean crop Moving on to quarterly grain stocks So this would be again a survey of how many bushels do we currently have in inventory both commercial as well as on farm These numbers came out a little bit tighter than we had first expected on the on the wheat side There was a slight reduction last last year at this time. We had about 1.3 billion bushels the us The average trade estimate was about the same. We came in just a little bit under that number Thus, I do think that was the reason USDA tweaked or adjusted the feed consumption On wheat just because that's very difficult to track and follow The inventories for corn The trade was expecting about 11.1 billion bushels. We got about 10.8 billion and again I do think that's a reflection of the lower yields that we and the lower harvested acreage for corn On the soybean side again some small reductions They were expecting some numbers very similar to what we saw this time last year We're a little bit behind that I do think that's because of a little bit more rapid export pace For soybeans now not total exports, but just the pace of exports We some of our exports were kind of front loaded this year And then finally coming to the winter wheat seedings report I guess of all the numbers that we came out with Today, I think probably the the two Numbers that were or the two areas that will get the most attention Of course will be soybean will be corn production numbers total corn production But also I think this winter wheat seedings number So if we look at what actually came out about 36 point of almost 37 Million acres of winter wheat Planted this last year versus what the trade was expecting about 34 and a half And and up pretty significantly from last year about 33 million acres This this is kind of a supplies surprise not that it went up, but just to the degree that it increased Most of that came in the form of hard red winter wheat So when the trade was expecting about 23.8 we got 25.3 So again a little bit higher winter wheat hard red winter wheat seedings and we had expected Also a slight increase in the soft red winter wheat So the hard red winter wheat would be the kansas, oklahoma, colorado wheat The soft red winter wheat is primarily in southern illinois, missouri parts of kentucky, etc So slight increase there And then also a slight increase in white winter wheat, which is primarily in the pacific northwest But we do have some of that also growing in michigan and wisconsin So as we add all those up a little bit higher Greater increase in winter wheat seedings than we had expected Has a slight impact on the wheat market Obviously for heart for the winter wheats in particular But also potentially having some some interesting ramifications as we begin into spring Planting for corn and soybeans and cotton kind of that division of where are we going to get all of our acres and what acreage It may planted for 2023 Just final comment before I Finish up here just as a reminder for the hard red winter wheat folks The soft red winter wheat area, which is kind of in this in this part of the u.s The southern illinois missouri kentucky area some of indiana You know that that is a little bit on the dry side right now Most of the attention that we're gaining in the winter wheat area of course is because of the hard red winter wheat in western kansas Um, and that is something winter wheat conditions in both kansas and oklahoma are below What we normally see this time of year But again the weather conditions that occurred during spring As the winter wheat is starting to break dormancy is going to have a huge huge impact on their ability and the potential yield So I don't want to put too much weight on these dry conditions right now We will have to wait to see as we move forward So with that i'm going to stop sharing I want to thank you for your time and attention and again if you have any questions Please feel free to contact me if you if in in the near future. So thank you very much Good afternoon everybody kim petrie end-of-show extension livestock marketing economist what i'm going to do today is just kind of preview the uh cattle inventory of usd cattle inventory report that comes out at the end of the month and then Just look at what the current cattle prices are are doing and so The uh usd every january does a survey of all cattle producers by state And so our new report is going to be out on january 31st at two o'clock if you're interested in that in our next webinar I will go through the All the details of that so if you uh want to get the report though you can look at it on january 34 so on the screen Uh, it just shows what the report for the us beef cow numbers are for the last 20 years and i'm just going to concentrate on the the Right-hand side of the chart there what's happened the last several years and so on a cyclical basis we topped out in 2019 at 31.7 million head went down Three years so on january 1st 2022. We were just over 30 million And if you've been hearing me before on these webinars, we had a huge One of the largest cow slaughterers ever and uh, and we have one of the lowest numbers of replacement heifers on record And they went into the feedlot and so because of that We are expecting to to be down of the fourth year And the question is not whether we went down because we did it's how much did we go down? and the numbers of course on Did come out on january 31st? It says of january 1st of the year are going to show that now on also on the right-hand side there you see cattle facts Is uh estimating that's the arm of national the information arm of the national cattle ones beef association Their estimate just came out. They're estimating 29.1 million head Which would be down three percent or so and the LMIC livestock marketing information center that I am part of here. It's Many extension services in the western u.s. Makeup that We came out at 28.8. So Regardless, you see the previous low was in 2014 at 29 million head And so our expectations are to be very close to that cattle facts just a hair above and and let me see a hair below So we'll be back very close to 2014 levels and then remember 2014 was our previous record high For cattle prices. So from a numbers Standpoint that isn't looking at beef demand and other things but from a sheer number standpoint We're going to be back to where we were with those record high levels So let's look at just to go through the different market classes here in north dakota and we'll start off with fed cattle there and my chart Key there in terms of the colors will be the same for all the charts I'll spend a little bit more time explaining it here and I just started now with the 2023. So the colors are The the year colors are a little bit off. So on the bottom. Usually I put three years on a chart when I'm leaving 2020 on the chart that green line on the bottom because that's the colvid year just to see how Abnormal we were there in 2020. So that's the green line the Purple line then is 2021 the blue line is 2022 And then the red line as we progress across the year will be The 2023 numbers and then if there is a futures market The red squares then will correspond with the red line that with the futures And so And then if there is a 2024 futures market, those are the gold squares at the top. So Again, I'm not going to dwell on the last couple years go back to to last year We started off about 140 and ended up there right where we are now about at 160 and and there's the This year at at 150 we're just last week right at 158 and so Our all-time record high then like I mentioned record highs before was back in 2014 the record And this is on a live basis which would correspond to the red line or the blue line last year the record high at 2014 was 153 84 certainly looks like we're going to break that If you just average those six futures contracts of yesterday's close I just did that before we came on and and the average is is over 160 as you see across from that 160 line So that would be a record the was the report Came out today that frame was going to talk about for grains The usd has been at an average estimate for 20 for this year 2023 at 155 50, but they raised it today to 158 25 and so all indications are now that we will have record high Cattle prices next year and certainly the low supply is a part of that. We had record high beef production this year and And again in the was the report that just came out today usd is backing that off Considerably our beef production for next year and our cattle and feed numbers are going down and a week from friday We'll have another cattle on feed report showing likely less cattle on feed So all that then is pointing the way to higher prices Then of course those gold bars as we go into 2024 You know, we just add another $10 on them likely and so cyclically a last time I talked more about What our expectations are and cyclical higher prices and so on but but looks like record high prices for fed cattle next year barring some catastrophe there and Then you know beef production likely in 2024 is going to be down again And it just depends on when it rains the reason why our cow herd has went down For for four years is because of the intense drought that we've had in the us But in the western us and that is improving somewhat We were up this summer at 75 percent of the beef cow herd in drought and now the lat the today's Drought monitor that comes out shows that we're closer to 60 percent of the beef cow herd in drought So it is going down a little with the rainy bad in the southwest but still a lot of cattle and in drought and so You know when that drought breaks and we keep the heifer calves back and and quit slaughtering cows That's when we're going to see a big big spike in prices quite likely So move on to the calf prices then again the same color code there and no futures for calf prices, but You know the covet year A bad year down there with the green line some improvement in 2021 and then last year throughout the year We did about 30 dollars better on calf prices the blue line there towards the top with the better With the lower numbers that we've had and you know even in spite of the drought the record high for 2014 for calves was $250 and so we're quite a ways from that and probably won't get a record next year It is possible, but but not probable and you know we're starting off there just You know about 208 and we expect them to do better By $20 or so and we'll be off the top of the chart. I think by April above 220 there and and You know the last week's Average price there was like right about a little over between 207 and 208 at North Dakota auction markets Yesterday had kissed there. They were about $10 higher at 2017 and so we'll see how we end up for the week So again expect better of calf prices throughout the year But not to record levels maybe by 2024 depends on the rain and so on and or certainly by 2025 We could be up there and the reason why is because corn is much higher now than it was back in 2014 Our previous record on cattle four dollar average in 14 and seven dollars average last year and we'd you know Fraying what I talked about You know usd lowered the production for this year by By some and that's sparked the futures market for corn a little bit today We don't know what corn price is going to be next year and that'll weigh into it too But but still no matter what because of our lower supplies We're going to have higher prices and you know $20 higher or so on calves quite likely So I'll go to the heavyweight yearling cattle then the more the 800 pounders kind of the same story there is $20 higher last year and and starting off there at 180 this The first week this year and again there On the market so far about five dollars higher this week. See how they end up But anyway the red bars then for This year are indicating kind of gradually increasing prices throughout the year getting them up to average about Right about two 10 there at the end of the year our 2014 record high was 2008. So again, we're probably not going to quite hit that Record high this year because we're starting off at lower But we'll be up to those levels by the end of the year and then bring those over to start out 2024 Certainly could be a record year again a lot of things go into that and isn't going to rain and and corn prices And so on but looks like gradual improvement there throughout the year so Kind of end up with cow prices and uh, you know very seasonal pattern there They usually go up into the summer But then they really crash there in the fall when all the cows are PG checked and come to market But we had again $20 Higher cow prices throughout the year in spite of slaughter being up 12 percent over the previous year when it was up 5 10 too because of the drought So we killed As many cows as we have for quite a number of years and yet we had Pretty good prices there And again a little bit on these prices. These are these are average 85 to 90% lean cows So these would be broken mouth cows that had a calf on them all year And You know and and are being sold so they would be at the low end of the market at the upper right hand corner Shows a market report for cows from the market in North Dakota from last week You know producers tell me I got 75 or more or whatever 68 or for for my cows And you're down there at 63 But this would be the low end of the market and you can just bring that that trend up for all those but anyway Looks like probably if things go Like they usually do by mid-summer we could be up to 90 dollars on them We expect them to do better throughout the year, you know if it rains and cow slaughter drops off significantly Then they're really going to spark to the record high in 2014 was 100 dollars for the year That was the annual average and so we'll see again in If not probably won't hit that this year because we're starting off at 63 but by uh next year the year after that probably Uh, if it rains and we start rebuilding the herd and beef cow slaughter goes down so on