 Let's go ahead and get going. My name is Dave Rippling, or I'm an economic specialist with NDSU Extension. This is March, our continuing our webinar series moving into March. Same format as usual, we're going to have a series of presentations by specialists with Q&A at the end. Please use the Q&A tool to ask questions, or if you prefer, you may use the chat. I will get to those at the end of the webinar. With that, I'll hand it over to Brian. Hey, thanks, Dave. Today, I want to cover and pull this up real quick. I want to cover and talk a bit about fertilizer prices because they've shot up pretty dramatically here recently, and then talk a little bit about some of the numbers that have been thrown around with the old CFAP and then the new stimulus package that was passed here recently. When we get started, my first slide that's being shown is showing the average weekly retail debt price. When you look at it, the red line there is 2021, purple is 2019, green is last year, and then that gray dotted line is the five-year average, and that'll be the same color scheme for the next several slides real quick. But you can see, since the first part of the year, and it really started happening in the fall around October, we started seeing some increases in phosphorus and nitrogen-based fertilizer prices, and then that continued into 2021. You see the red line, and really dramatically there in February, increasing almost actually over $100 a ton in almost a month on DAP. And then the next slide shows MAP, which, as you know, you use one or the other typically for your phosphorus application rates. But it's slightly higher than DAP is, obviously, because you got more and more phosphorus per pound or whatever of fertilizer, but it's basically experienced the same thing. So both phosphorus fertilizers, a really remarkable increase that started in October, but really ramped up after the first of the year, and especially there, the later part of January into February, increasing just over $100 a ton in a month. I mean, that's a really big increase right there. So then my next slide shows Urea prices, and they've basically behaved the same way since January, up over $100 a ton from it. And these, let me just be clear, the slides I'm showing here are national averages from DTN. I have a regional specific one to show sort of what the prices were as of last week that I'll show toward the end of this fertilizer portion of things. But yeah, there's a big increase in Urea as well, all the way up from $370 a ton just under that to start the year to the early part of March, up over $470. So another big increase, about a 25% increase, 22.5% increase on Urea. Then even potash, which is my next slide, has increased. And that really started ramping up about November of last year. If you look at the green line on the right, you see it started trending up quite a bit there in November and then into December. And then you go back to the left and you look at the red line. And yes, potash is up as well. And really since the early part of November, potash is almost up $100 a ton. So that's pretty close to a 33% increase in potash prices since November that we're seeing right now. So across the board on the major fertilizers that we use, just really big increases. And then my final graph slide on fertilizer is anhydrous. And anhydrous, that's the precursor to whether you use an UAN 28 or 32 starters, Urea, or just applying anhydrous, it's kind of the base for any nitrogen fertilizer. And you can see that it's really ramped up in price dramatically since about that mid-November timeframe moving up quite a bit toward the end of the year. And then here recently, since January up nearly, definitely over $100 a ton since November. And since January, about $70, $75 a ton increase there. So really big increases in fertilizer prices since the first of the year. And not coincidentally, really starting to happen when we saw these big price rallies in our major commodities, corn and soybeans and wheat to an extent. So my next slide just kind of highlights a research article that came out at the beginning of this year by a fellow I know, an economist at Kansas State University, Greg Eibendahl, who kind of looked at a statistical analysis on fertilizer and evaluating, you know, what drives fertilizer prices. And his model was predicting, and this was, paper came out a little before, but about a month or a month and a half ago, that the national anhydrous price could reach $600 per ton before not, and then maybe falling off some in the fall. But the thing is in some places, it's already well above $600 per ton. So we're even to an extent overshooting the model that was saying that the $600 a ton price would happen. And I believe that if we exceed that 600 bucks that we're gonna be talking about 550 to maybe even $600 per ton cost of urea. So that's a big difference from where we were, not that long ago, six months ago, with what these prices were heading in. And, you know, he goes on to say in the paper, a lot of it is just an expectation of what is to be planted and essentially a demand question among farmers. You know, how much demand is there going to be for phosphorus and nitrogen? And with higher prices comes the expectation that more acres of these fertilizer demanding crops will be grown. And then you couple that with potentially whatever the weather's going to do and how much PPE is gonna be taken and so how much fertilizer is applied. And let's not forget, we had a pretty dry fall. And so there was already a lot applied of anhydrous and other fertilizers in the fall. So the fall applications for the most part already happened and yet we still have this big increase in fertilizer costs heading into the 2021 planning season. So my next slide shows a table and this is the closest I can get to North Dakota. And it's actually from Minnesota on how each fertilizer category breaks down in terms of price. And this is in dollars per ton. I tried to get North Dakota but there just aren't enough observations yet to actually put a table like this together to get an average that would mean anything. But you look at Minnesota, so that's who I chose as our proxy. And their anhydrous price was already as of last week over $600 per ton with Urea getting close to 470 bucks a ton. So really that 500, 550 mark isn't very far off at all already. And then you have DAP at 623 and MAP at 700 and Potash at four and a quarter. And then we can see starter prices approaching $600. So fertilizer costs, I've shown a bunch of slides and given a bunch of talks already this year on what production costs are going to do. And for the most part, the expectation is flat with the exception of this one. And obviously it's not insignificant because when we look through our budgets, especially crops like corn that uses a lot of fertilizer and wheat uses a lot of nitrogen and soybeans doesn't use any nitrogen hardly but it uses more phosphorus and those kinds of things. Definitely something to consider and that we're gonna have to think about and budget in and perhaps revise our enterprise budgets, producer enterprise budgets when we're making our planning and marketing decisions that look, this is gonna be a big increase in cost upwards of 50% higher perhaps than what last year's bill looked like. So my next slide, I'm gonna shift gears here just real quick the last few minutes and talk about this third stimulus package that passed this week and is expected to be signed by the president here relatively soon. And sort of the nuts and bolts as it pertains to a lot of us everyday folk is this $1,400 check per individual making less than 75K or married couples less than 150K. That was the benchmark in the original stimulus one and two actually, but the slide in which that is reduced was accelerated. So it used to be, if you were a couple, it slid at a pretty steady rate up to 200,000 to less than 200,000. Now I think it's been moved down to 160,000. So it slides down to zero much faster than the previous. The other thing that's big there is it's $1,400 per individual including dependents and that are living with you and not just that $2,000 per person and $600 per child, which was the original stimulus. And then the number two, it still had that provision for kids and now it's $1,400 per individual and that includes dependent children. So for instance, I put an example, a family of four would get about 5,600 bucks assuming they're below that 150K AGI threshold. Then there's a $2,000 tax credit moved to $3,000 per child, so per dependent child. And then for children under six, the credit moves to $3,600. I think the logic that is they're thinking about childcare expenses and those kinds of things. And then finally, another big portion is extending the federal unemployment benefits to September 6th, which is that $300 federal kicker that goes on to whatever the state benefits are. And obviously there is a whole lot more in this stimulus than just this. This is just something I'd had some questions on. So I thought I'd kind of lay it out there on what you would see as far as that goes. There is, I mean, I think the bill's 76 pages long or 80. So there's obviously a whole lot more in there than that. But for a lot of Americans, but I just wanted to lay out there what it's showing. So my next slide, I just wanna talk real briefly about concerns over inflationary pressure which is tied to this stimulus thing. Folks have been worried that with this, another infusion of almost $2 trillion in cash that there's gonna be big inflationary pressures. We've seen it in the bond markets where the yield curve has gotten much steeper, where the yields on these longer-term bonds are getting much higher, which is folks are being concerned about inflation in the future. And bond yields moving inversely to bond prices. So what happens is these longer-term bonds, they have a lower rate. So in order to get a higher return, I have to pay less for it. So that means the price goes down and the yield goes up. So that's what's been going on with these rising rates is this concern over inflationary pressure moving into 2021, partially because of this stimulus package and a big influx of trillions of dollars. Now, on my next slide, I just kinda highlight one of the things that's happened in the markets is the Fed has actually shifted the way they're buying and acquiring bonds, adjusting their balance sheets, so to speak. But this was in place long before any stimulus was discussed, well, not discussed, but any third stimulus was being passed or anything like that. And that was they were just unloading a lot of its shorter-term bonds and buying up longer-term bonds. And when they buy them up, it drives up the cost there and then on 10-year notes. So this was something that was in the books long before any of this happened. And so they just basically stayed true to their plan and it's had a little bit of an impact on bond markets. My next slide just shows that yield curve I was talking about. If you look, the darker one is the yield curve in February of last year, okay? And then the light blue one shows as of January of this year and how much steeper it is. And what this basically says is the yield on longer-term bonds is much higher than shorter-term bonds. And in fact, there was an inversion in the yield curve this time last year for different, depending on which maturity dates you're looking at. The biggest one they look at is the two-year and the 10-year and it wasn't inverted, but it was pretty flat going between those two points. Now between the two-year and the 10-year, it's a lot steeper. I mean, we're talking about over 100 basis points. So that's quite a bit steepening. So that in this case, it's a reflective of possible inflationary pressure. So this next slide is just a plot and what this basically does is it shows how the Federal Reserve Board of Governors who controls the Fed's actions and how they're going to behave voted and what their expectation of interest rates should be over the next several years. And each light blue dot represents a voter, okay? And then the red dot is, that's the actual chairman there. But if you look at 2021, okay? The interest rate there is basically zero. It's like less than a quarter of a point, which is almost zero. If it goes down to zero because there's a range, they actually project a range of values. We say zero, but really in this case, it's zero to 0.25. So they just pick a spot in the middle of that. And so if you look at 2021, everyone on the voting board is basically saying zero. And then pretty close to the same thing for 2022, okay? Pretty close to zero with the exception of one lone individual thinking it would be about a little over a half. And it isn't until 2023 that we get more than a couple of people thinking that rates should be higher. And then by the time we get to, it isn't till the long run where you see folks saying, okay, interest rates should be or the Federal Reserve rate should be increased quite a bit over where it is right now. Now, there's not a lot of agreement on what the long run actually is, like how many years or weeks or anything like that. It's just saying, okay, sometime in the, not so distant future, but certainly not 2023, we expect rates to go up to 3% and kind of stay there in the long run. So just to give you an idea that right now, all the board of governors, all the voters are basically saying holding interest rates extremely low for the next couple of years. Now, things could change and they often do, but as it stands right now, that's what they're projecting. All right, so finally, just a couple more slides. There's a CFAP-3 out there. Ron's gonna has a slide on it, but I just wanted to show you that what's already been paid out in the last three years in terms of these ad hoc payments. And MFP-1 was 9 billion. MFP-2 in 2019 was 14.3 billion. And then CFAP-1 and 2 was just over 24 billion. So we've basically been ramping up these payments the last few years. And what, and if exactly CFAP-3 is going to be, means to be seen, there's been a number tossed around a 13 billion, which would make it smaller than MFP-2 and just a bit over half the size of CFAP-1 and 2 combined. We'll see if that happens and if and when that actually happens. There's been some comments out there, but nothing definitive on that. And then finally, just a few other notes. I know we're heading into planting season. So this is an opportunity I thought to plug some of the tools that NDSU Extension puts out. And I know Ron's been, Ron Haugen's been working hard this spring, getting these up to date and ready for you guys to use. But our Crop Compare tool, our ARC PLC and ARCIC calculators and tools. We have a nitrogen decision tool, which may be big this spring when we're looking at commodity prices versus the cost of nitrogen per pound. So that may be something you guys want to dust off and look into. Yes, prices on our commodities grown or have improved quite a bit, but still there's that whole marginal benefit, marginal cost kind of thing. And is it worth it to bump our yield another bushel or two, given what these fertilizer costs are and the yield response rate? We have our PP analysis tool. We may have some folks in the state thinking about prevent plant, if for no other reason than extreme drought that we've got going on in the West. And then finally, our grain storage costs calculator and tool. So with that, I'll hang on for any questions and things toward the end of our talk, like always. And I believe our next speaker is Dr. Frane Olson. So thank you and take it away, Frane. All right, thank you, Brian. So good afternoon, everybody. I'm gonna try and provide a little bit of an outlook here and give it a brief summary of what happened on Tuesday, the WASI report, World Agricultural Supply Demand Estimates got updated by USDA. With the exception of a few little tiny changes and tweaks here and there, it was basically the identical report we got in February. So no big shock value within the report itself, but as we move now into the end of March and we get closer to that perspective plantings report that'll come out on March 31, things I think will start to get a bit more interesting. And as we look longer term even into this summer, I want you guys to be prepared to be prepared for price volatility, which is kind of the topic I'm talking about today because we're going to see it. We've got ending stocks numbers that are relatively tight. We've got a lot of uncertainty coming into the marketplace, especially with weather. So be prepared for a lot of volatility which opens up opportunities, obviously opportunities to try and get some higher prices, but it also means that prices can go lower. And so not to get too panicky or too upset if things do go lower for a while. So on my first slide, I just want to try and provide a quick overview of the soybeans. We're gonna start with soybeans first because the supply demand conditions on soybeans, especially old crop are by far the tightest. I just want to put this in historical perspective, looking at the blue bars in the bottoms, that's the stocks to use ratio for soybeans. And again, I just remind everybody that that's the ending stocks number, the amount of grain we're gonna have left in the bin just before harvest divided by our total use. So what percentage of our needs are we gonna have in reserve in case there's a problem going into the next marketing year? And if you look at soybeans, the current USDA forecast is the one highlighted in red. That is an extremely tiny number. And we've been able to bring our ending stocks of soybeans down very rapidly, partially because we've got acres, partially because the demand base has returned in the form of China. But if we compare our stocks to use ratio, the current forecasted one, relative to our historical low, which was back in 2013, 14, their identical numbers about 2.6% carryover. What I want to remind everybody is is as that ending stocks number gets smaller, as that percentage gets smaller, two things happen. First, average prices get higher, and we've seen that. But the other thing is prices get much more volatile. We get a lot more bouncing around, both upwards and downwards. The reason for that is because those ending stocks are forecasted to be so tight, you know, the marketplace is trying to ration the use. We know about the available supplies. The question is how high do we have to have prices to go in order to ration use so we have something left over just before harvest? Well, if we get new information, new news, that, oh, it looks as though we're not gonna have as much, the demand base hasn't been choked off yet, or we have some kind of new information where we need to stretch those supplies even longer, we need to really tighten down and increase prices very dramatically in order to get some of those end users to stop or to switch, stop using or to switch to something else. On the flip side, if we suddenly see, well, it looks as though the high prices have done their job, we've rationed our use, we don't have to be quite as restrictive, we don't have to be quite as aggressive in trying to choke off or limit demand base, well, then all of a sudden prices drop. And so we can see this volatility in the marketplace obviously depending upon what we think the future is going to bring. On my next slide, I just wanna put this again in historical perspective. So this is the nearby Chicago Board of Trades soybean prices. So this would be nearby. So it's a continuation chart. Every time we get to the end of the nearby or the contract month closest to today's date, we roll it into the next contract month. But I wanted to give you a long-term kind of historical view. So the blue line is the weekly average futures price, nearby futures price going back to 2004. And if you notice that 1416 is the number we had as of about 11 o'clock this morning. So I tried to be as current as possible. I'm getting this question a lot saying, well, we're in this $14 for old crop. There's $14 a bushel range. Why don't we see that $15, $16, $17 that we did back in 2012? And the reason is very simple. If we look at those really tight supply chain years like the 2011, 12, 13, and even into 2014 crop, the mid-range kind of the midpoint of those prices during that time period was about $14 a bushel. So I put in the red lines and the black lines. So I'm trying to give you kind of what's that normal range that we saw during that historical time period. Even if you go back into that 2007, 2008 time period, we're still looking at this $13 to $15 range, which 14 being the midpoint. Now really quick, what caused prices to go up to $17 in the summer of 2012? The short answer was a drought. In starting in about June, it got very hot and dry in the corn belt. So those high corn and soybean producing areas of Nebraska, Iowa, Illinois, Indiana, Ohio, those guys got really hot and dry. And every day that that weather forecast continued this hot and dry pattern, we took soybean prices higher and higher and higher until we got to the peak in the first part of August. And then the first part of August, the weather flipped. We got a shift in the weather pattern. It started to rain and it cooled off. And those rains as we got into August and September and the cooler temperatures allowed us to have a, it wasn't a fantastic year, but it was obviously much better than we had first expected. So in order to get into those that really, really high end range, we need to have something weather wise occur that really causes a lot of uncertainty. So when we look at old crop supplies and we look at the ending stocks values we have today relative to history, we're right in that same range that we saw during that 11, 12 and 13 timeframe. So I just wanna remind everybody about that. We can, and again, notice the volatility. You know, we're gonna continue to see this high volatile trading in the soybean market in particular. On the next slide, let's shift into corn and just make a relative comparison between corn and soybeans. If we look at the current forecast for that stocks to use ratio on corn, we're at about 10%, which is getting to the low end of the range. It's getting to be kind of tight. And I will say about 10% is kind of that tipping point. If we get less than 10% carryover stocks, the corn market starts to get really excited. They get start getting really nervous. If we have more than 10% carryover stocks, then the corn market is a little bit more relaxed. We don't see that price sensitivity. Also, again, remember we got back here in the 2011, 12 and 13 timeframe. We had that dip. We had relatively low carryover stocks for multiple years. We're at 10% now. We were at about that 67% carryover range in that timeframe again, 11, 12, 13. So, and also notice back in 1996, 97, 95, 96, excuse me, we had the record low corn stocks. And that was really because we did have a drought in the corn belt and our production was much lower than expected. So the next slide, let's look at that historical pricing, the futures prices and how volatile they were back in that 11, 12 and 13 time range versus what we see today. Well, yes, we have seen a very nice, significant increase in corn prices from the 2014 on timeframe, right? So we have seen this rise in corn prices, but we're not seeing those really high, high values that we saw in 11, 12 and 13. And again, that's for two reasons. Number one, we have bigger carryover stocks. We got more buffer or bigger shock absorber fuel coming into the 2020 planting season than we did back then. So we had a much, much tighter margin for error back in 11, 12 and 13. However, just like soybeans, we do have this uncertainty, not only about planted acres, but also potentially now weather and what might come up this summer. So the corn market, I do expect to see quite a bit of volatility in corn, both up and down, but probably not as much sensitivity as we do as we see in the soybean market, simply because that margin for error in soybeans is so much tighter. Now the next slide shows all wheat. So this would be all the classes of wheat blended together. So we just kind of look at the wheat complex. The wheat complex is very different from corn and soybeans. We are not in a very tight supply condition, supply demand condition. We've got plenty of carryover stocks. We're having okay export sales, but not fantastic sales. We are starting to bring those wheat ending stocks down, but not to the levels where people get really concerned. So the way I'm looking at it, about 40% carryover stocks, I usually consider 30 to 35% normal or typical for wheat long-term. So we're on the kind of a high end of the range for the all wheat stocks. On the next slide, this is the same information for spring wheat only. And again, spring wheat, we've got good inventories of spring wheat from last year. I know the Canadians have pretty good carryover stocks or inventories of spring wheat from last year. We had a lot of good production quality was relatively good. We are starting to bring those downs, but not to the level that the wheat markets getting really, really super nervous. So right now the wheat complex and spring wheat in particular is really a follower. The price rallies that we're seeing in the wheat market is really more driven by the corn market and the wheat market having to keep a premium above corn to prevent it from entering feed rations. Now we don't feed a lot of hard red spring wheat in our rations, but if they do, I mean hard red winter wheat is an alternative, not only for beef, but more importantly for the poultry sector. So right now again, I wanna emphasize this corn prices have come up high enough that if wheat doesn't keep a premium, some of that high quality milling wheat is gonna end up in the feed pile. And of course domestic millers really don't want that to happen. So my next slide just shows again this historical variability in spring wheat prices. Yes, we've seen this improvement in the spring wheat market, but we're not seeing this larger rallies, those big price volatility, their price swings that we are based on history. So you'll compare today versus that 11, 12 and 13 timeframe, which I'm using kind of as that benchmark, we're still quite a ways off the mark for those kinds of price levels. Again, primarily because we have those carryover stocks, we have those inventories available. So if we have some slippage in spring wheat planting this year, I know it's dry in a lot of parts of North Dakota, even if yields are a little bit lower, we have that buffer, we have that carryover. Now my caution, and this is my caution that I want you wheat guys to be thinking about is in my opinion, in my opinion the spring wheat market has not fully built into especially new crop bids the fact that we may get a larger cutback in spring wheat plantings for both the United States as well as Canada, then I think we're gonna see in that March 31 planting report. So the March 31 intentions report is gonna be very important, especially for spring wheat because I do expect to see probably a larger shift away from wheat than I think what is already bid into the marketplace. So my next slide just shows the current drought monitor map. And I wanted to make sure that everybody understood what this drought monitor map represents and I'll do this as quickly as possible. The different colors on this map really represent how deep within the soil profile does that dry layer extend? So if this was the middle of the growing season, anything in yellow or that D zero, that's where the dry layers within the root zone of the plant. So the crop conditions are under stress. So anything in yellow, the crop condition will be under stress. But by the time you get into the Bayesian, the Browns, what happens is that dry layer in the soil gets deeper and deeper. So by the time you get to the Brown layer, you've got stock ponds that are starting to go dry, pastures are really starting to suffer where again the root zone of the grass plants can go much deeper than a normal root zone of a crop. Then by the time you get into the Reds and the Maroons, you've got wells that are going dry. If you're in the corn belt or excuse me, if you're in Nebraska or Kansas, all of a sudden those guys that are trying to pump water from a well for irrigation, they're having a much harder time because those aquifers are starting to drop because it's been so dry so long. The point I'm trying to make is, yes, this drought monitor map does provide information, but it's misunderstood. You can still have a very, very good crop if you get these regular rains. And you got, you know, the farmers in the group understand this. If you get an inch of rain a week, even though the soil moisture is dry, you can have a tremendous crop. But what it does mean is if you miss one of those rains or if you miss some of those showers or don't get as much as you really need, the crop condition ratings can drop very quickly. So the weather forecast this summer, because of that Western corn belt and even into the winter wheat regions, because that's so dry, the market is gonna watch the weather forecast and they're gonna have a much larger impact than they normally do. And normally it's a big impact. So again, adding to this volatility is the expectation about what kind of yields do we expect for fall harvest? It's gonna be extremely critical for soybeans. It's gonna be very important for corn and it's gonna be somewhat important, I would say, for wheat in the wheat crop. So my last slide, I just wanna remind everybody, March 31, mark that date on your calendar, make a great big circle in red. March 31 is the perspective plantings report. And that's gonna be a survey of about 80,000 farmers across the U.S. USDA is gonna ask, what are your intentions for planting? How many acres of the different crops do you intend to plant? We know that can change based on relative prices and what the weather conditions are, but that's the information the market is gonna use until we get updated information in June. So there's gonna be several months we're gonna be using, whether they're right or wrong, we're gonna be using those perspective plantings numbers to do the math on what do we think the crop size is going to be. At the same time, we'll also have the grain stocks report which is kinda looking backwards and making sure that we're tracking our inventories as accurately as possible. So 11 o'clock, Wednesday, March 31, I guarantee the markets are gonna go crazy. I just don't know whether they're gonna go up or go down. So with that, I will hand things over to Tim Petrie for a livestock outlook. Okay, good afternoon, everybody. Tim Petrie here, go to my first slide. Just a week ago on March 4th, USDA NAS put out the inventory report for the cattle inventory report for both the United States and Canada and due to our close proximity of Canada and some important issues that we can discuss there and particular in the case of prices of feeder cattle and so on that we'll get to. So anyway, on my first slide here, I just go back to 2006 and you see quite a bit of difference in what beef cows have done. The blue line is the US and the brown or orange line is in Canada. So you see that V-shaped in the US compared to the pretty much straight downward trend in beef cows in Canada. And so just a little bit, some of you have heard me before on the US, our last cyclic high in beef cows was in 2006 and then we declined four years to 2010, which should have been the end of the liquidation from an economic standpoint, prices were high enough. But we went down another four years all the way down to 2014. And so we were in 2010, we were at 31.4 million head and then by 2014 down to 29 million head. So that was forced liquidation, the reason being the drought in the Southern Plains, Texas, Oklahoma, Missouri in there and I'll show you in a minute how important those states are. So that forced liquidation is why we had those extremely high prices in 2014 because we took beef production. But when it started raining then in the Southern Plains, we bounced back quickly and went up 2.7 million head up until peaking cyclically again in 2019, there at 31.7 million head. And, but we weren't gonna get back up to where we were in 2006 anyway because in 2019, we had record beef production. Cows have gotten bigger, beef cows have gotten bigger every year. And so we didn't have record production in 2006 but we did have record production in 2019 and in 20 and likely again this year. But then the last couple of years then in the US we went down about a half a million head the last two years. And so my expectation is that we'll level out there more on that in a minute. Okay, contrast that to Canada then. Canada started out in 2006 at an all-time record high number of cows. Our all-time record high in both the US and North Dakota was way back in 75 and we've been kind of declining cyclically since. But Canada kept increasing, was all-time record high in 2005 actually and but then have been declining as the line shows there ever since. And one of the reasons why cow numbers were so high in 2004, five and six is because of the BSE that hit up there in May of 2003. And so they did ship a lot of cows for slaughter down into the US and obviously when they got BSE we cut them off. So they had no market for cows. So all prices went to basically zero or very low, so they either had to shoot them or keep them and so in many cases they just kept them. And so the quite high numbers there in 2000, actually starting in four there, five and six and then the constant decline since. And so they ended up then at the, this year then in January 1st had about 3.5 million head and that was a 33% decline. In other words, they lost a third of their cows there from 2006 to 2021. Again, I thought probably we're gonna stabilize there from a replacement heifer standpoint and maybe mention it now I was gonna a little bit later, but we had just a few more replacement heifers kept on January 1st of this year and so did Canada had about 4% more replacement heifers. So I think there was interest there, prices are better now, we'll see that in a minute. So I think some leveling off there but go to our next slide then is just shows us numbers and importance of the states and where cattle are between the two places then I guess I didn't mention before I was going to we we have about 31.2 million head of beef cows on January 1st here about 3.5 million candidates. So they only have about 11% of the cows that we have in the US. Kind of start with the top chart there. Kind of interesting, a lot of people think is the Western States being cattle country that IE Montana, Wyoming and down in there and it is important probably more important the cattle production in those states and it is in North Dakota. It's just that we have more cows through the plains because we have better grass. And so the number one state there is Texas and then we just move on up in the US then Texas is the big cow calf state and then we come right up, right up heading right up for North Dakota and you can see the numbers there and kind of fun is we think a cattle being in the West but a couple of Eastern States there, Kentucky and Florida are also big. Sometimes we're a little bit larger than Kentucky so we're in eighth place. We kind of share eighth and ninth places but Texas you can see there has 4.68 million cows and they're a million bigger than all of Canada just Texas alone to kind of put things into perspective there. And then on the Canadian side then their numbers kind of parallel ours. The biggest state there is Alberta right above Montana and then East of Saskatchewan between Montana and North Dakota and then Manitoba above us in third place. So those cow numbers just continue right on up through the US right up into Canada as being important. So like I said and Frayn has showed you this so I don't have to go through all the colors but I've extended this drought monitor up into Canada and we think probably we stabilized the beef cow herd in both countries but the big wild card is weather and like Frayn told you it's dry all over here but you know Western Texas is very dry and right up and on right up into Canada in those big cow calf states up there Manitoba, Saskatchewan, Southern or dry like we are Alberta not as bad when you get into the Pacific Northwest there but up in central Alberta as well it's drought is getting worse and some blue there. So you know that's the big, if it continues dry obviously we're gonna have forced liquidation of cows and we won't maintain the herd like we expected. So something to watch on the cattle side as well. So just a little bit on cattle on feed here. Here's the cattle on feed on the top in the US and on the bottom in Saskatchewan in Alberta, Saskatchewan where they feed all the cattle but you know you see there the red line to begin with on that top chart is 2015 to 19 that's when we were rebuilding the herd quite dramatically in the US and so as you would expect cattle on feed numbers were down because we kept heifer calves back instead of sending them to feed lots and so on and had less cattle. And then as we got to those peak numbers in 2019 then last year you see our cattle on feed numbers picked up quite substantially except right during when the pandemic hit there and March, April and May the auction markets closed down and so on then the blue line there were up too but that's expected because we've got more cattle and bigger calf crops and less heifers going into the herd now. But go down interesting go to Canada you see there's the line the seasonal pattern is about the same the red line there we kind of run almost not run out but have much fewer in September and then as the new calf crop comes to market we pick up cattle on feed and so on but the interesting thing to me for Canada is even though we increased our herd and so that would be a reason to have more cattle on feed every year Canada's beef cow herd went down but last year they had more cattle on feed than they had back in 2015 and 19 and like I said every year 15 through January 1st, 21 the numbers went down and they're still above so why would that be? Well, there's a very good reason for that and that I know producers in North Dakota a number of years ago complaint feeder cattle coming down from Canada and maybe hurting our mark and so on and there's even some border issues and so on but that tide with the Canadian herd continuing to go down and ours going up that is turned now and so the last several years really started in earnest in 17 that I don't have in this chart I have just that green square on the left hand side that's this January is the current we have available but in 19 and 20 and 17 is really when it started particularly you see in the fall a lot of calves about 30, 40,000 head a month going to Canada there in the fall and maintaining actually that January number is the most calves that we've sent to Canada I think for 10 years or more so how they are keeping their cattle on feed numbers are is they are importing cattle from us a lot I'm right out in North Dakota, Montana and that bolsters our prices here because we've got another buyer on the seed and it kind of makes sense for them because they still do send cows down here for slaughter then the trucks go back empty so they can just stop at Rugby or wherever you know they want to and pick up feeder cattle back haul them back up to Alberta so a lot of not a lot but I mean way more than we have seen for a number of years except last three going up to Canada and then just a little bit on prices here to wrap up you see these are on the top are our slaughter steer prices in the US and on the bottom and in Alberta where all the cattle feedlots are and similar patterns there and so on and the dotted line is last year and how COVID affected and so on but just want to move quickly along here and show you how they're doing now in those purple squares there that in fact the fed cattle price in well anyway I'm about done there is about $5 higher than it is in the US simply because they're short a kind of shorter cattle up there and their exports are doing very well they joined the CPTPP, the old TPP and we didn't and so they got a leg up on us on a couple of markets there for a while so prices are a little higher there and so now our feeder cattle are going that way so I'm going to stop sharing there and I just want to have a few slides talking about the FSA agency deadlines farm service agency deadlines and the quality loss program which I talked about last time that did get extended to April 9th there's a lot of work involved for producers they need to call their elevator and get all their discounts laid out there's still a little question on whether wheat protein is a quality loss from what I understand if you've got a protein discount put it in there and when FSA determines what they're going to do they will take it out if they may not accept it but put it in there just in case the ARC PLC, the big deadline is Monday now March 15th, last check about 1.4 million farms have signed up about 81% FSA we've been for our calculator we've been really battling trying to get data they just released some data here a few days ago and it's a little too late for anybody anyway and the data is just filling some holes and so we really hope next year at this time that the FSA gets a better handle on releasing their data so farmers can make their decisions whether to go at ARC County PLC or ARC IC as Brian mentioned we have those calculators online ready to go crop insurance deadline is also March 15th you can also check into the supplemental coverage option you need to have PLC for that there's also the enhanced coverage option to go up to almost 95% coverage but there of course you gotta pay a higher premium there's talk about drought of course especially in the Western part of the state and people are being a little confused crop insurance they do have prevent planting but just because it's a drought doesn't mean you can have prevent planting because you can still go out there and plant it may be stupid to plant to plant some seed and dry dirt but so crop insurance is still discussing that it had to be this situation would have to be pretty disastrous for them to call not planting because of drought a prevent plant prevent plant means you cannot absolutely get out there and plant at this point the NAP program also March 15th that's for the spring planted crops for your basic coverage and your perennial forages conservation reserve there's basically an indefinite deadline there for sign up contact your FSA office for that and the CFAP technically it's called CFAP AA everyone's terming at CFAP three maybe that's what it'll be eventually called it's still under review last I checked Secretary Vilsack said the decision is still several weeks away and then whenever the decision is made the deadline will be 30 days from that decision so it gives people some time as Brian mentioned, it was passed last December it was around 13 billion we don't know if that's gonna be enhanced or cut back or if the whole program will be changed we heard that livestock producers would get a payment and there was talk about $20 an acre additional on the crops so we will see how that turns out so with that I think Dave you're back online so we will turn it over to you I'll stop sharing here and I'll stand by for questions. Yeah so Dave Ripplinger economic specialist focusing on bioproducts bioenergy just a highlight of what's happened over the last month and really nothing new and a lot of things new so we're basically following or trying to deal with high corn prices but the big news is that the power crisis in Texas dramatically impacted ethanol production and we still haven't fully recovered but we're doing better than the oil refining business who is still there's a few plants that aren't online and at least one that's probably not can be back online until April. As economy continues to recover we're expecting to see increased gasoline use and ethanol use with that and then there was a big export announcement or at least it made the news early this week about a sale or at least three ships going to China which may be providing some optimism that they might become a buyer a regular buyer of ethanol so just looking at production so that 2019 is in blue 2020 is an orange and 2021 is in red we can see that steep drop over the last three weeks and for the most part of recovery and that is almost entirely due to the power issue in Texas as they dealt with those issues the price of natural gas soared which caused some ethanol refineries to shut down because they couldn't afford to buy natural gas at the spot and it also caused other folks who had actually already contracted for natural gas so corn ethanol refineries who contracted for natural gas decided to forego their contract or redirect it to someone who's willing to pay significantly more as you can see that there's been a pretty steady recovery not the same on the petroleum oil refining side again if you look back to last year we're getting right at that point too where we saw production fall dramatically looking just a little bit comparing ethanol and gasoline being supplied so this is really kind of trying to look at that blend and so the darker line is the ethanol and the lighter line is the gasoline and we're actually seeing is that ethanol right now is only going, you can think of it as going into the 9% blend rate but is that exports instead? Usually it dances pretty close to 10% and that's why I can have different scales on each side of the screen and it looks like pretty close to the same line and we've seen a bit of a detachment recently exports a little bit and then the disruption in the petroleum refining and then that entire supply chain. Stocks we had a rapid decline in stocks as we had to get ethanol to folks when we weren't producing it that was more two weeks ago and then into last week there's been another continued draw of stocks nothing close to where we were a year ago and actually lower than we were in 2019. Next slide. So this is just the margins. This is from Iowa State aggregates it but it's from a few different sources really big thing to bring up and they do their math a little bit differently than I do they do account for natural gas all the time which I usually don't and if you look at the far side of the screen it's not on there yet because the data hasn't been released yet for the series that Iowa State uses but basically you use about 30 cubic feet of natural gas for a gallon of ethanol that was averaging about 20 cents ish pretty consistently for industrial natural gas delivered to the gate. And if we think to what happened three weeks ago the spot price of natural gas went from $2 or $3 to 500, 600, 800, 1200 again just trying to get folks to stop using it unless they absolutely needed it and trying to bring absolutely anything online that they could and again that affected corn ethanol margins and this is one of the things that I always have to think that you lose in these margins is we're talking about the average so some folks are gonna have a really horrible February and some folks are gonna have a really fantastic February just based on if they'd already contracted for natural gas. Talking just a little bit about exports so this is a chart for the last 11 years to our top export destinations not all of them biggest export market is Canada again that's one of the things if anybody asks you who our biggest trade partner is in a particular area and you don't know who it is just guess Canada and you'll probably be right. Brazil has been a major destination or at least was through 2020 basically we would supply them and when they were interseason so when they were running out of sugar and the mills weren't running and the ethanol was not there we would hit that pretty hard. And then if we look for China and that's why I brought this up there's a lot of talk about China in agriculture certainly even in the biofuel space there's been a lot of enthusiasm and this was beginning in 2016 but the thought was always will they become as big of a buyer in ethanol as they are in some other agricultural commodities and it's never really come through and in fact it's been really sporadic with significant rapid drops and just disappearance where they just leave the market. China does have to figure out how they're going to fuel their vehicles they have an internal combustion engine fleet they have significant environmental issues they really don't have the luxury of messing around with smog and the question is where they get their fuel almost their major petroleum importer they're not a major ethanol importer yet might they be that's kind of the question this only goes through 2021 because these are monthly numbers so we don't see that next little bit these are actually that if you look in the bottom right corner that little red blurb so that was actually sales at the end of the last calendar year and we've had about that same size again I think that was actually 70 million and we just did I think they were counting 28 million so quite a bit of interest a bit of excitement not knowing where things will go with the trade agreement they've committed to buying a significant amount of agricultural products which could include ethanol so optimism there so that's what we had for presentations to bring everybody else back and we'll try and field some questions and I'd imagine since I fell out actually a couple of times I probably lost a few questions so I'll need some help the one question I do have and this is directed to Ron what's the best guess as to whether CFAP 3.0 will be paid as initially planned materially modified or not paid at all? Well, that's a real guess I guess if I had to guess I would say that there probably would be something they wouldn't probably not pay anything but your guess is as good as mine is what it's gonna end up to be maybe it'll be the same who knows but I think there'll be something that's my guess and I didn't see were there any other questions up on the board? I was watching for you and I haven't seen anything else come in yet did you guys have any other thoughts as others were talking? I'm quite interested in the inflation issue broadly and now it will affect agricultural commodities specifically again, as Brian was saying, we don't know but it's and I'm probably more concerned that it'll actually pan out to be but it's interesting and it kind of goes back to the economic issue that every time you have something pushing one way there's always something pushing back and is inflation gonna be the thing that gives? I know the Fed watches that pretty close and if you look at I don't necessarily always agree with this that they pull food and energy out of inflation you have to have a definition I get that and just like some people disagree with how they define unemployment and these other kind of things but a definition is a definition so one of the things that we watch though as consumers is energy and food costs because that's such a big part of our budget that when those prices go up we feel it and yet in some instances that's pulled out of the inflationary calculus and we're focused solely on the price of new cars or some of these durable goods or couches or whatever else they put an index together so we may as consumers see prices at the pump going up or heating bill increasing electricity cost per kilowatt hour and then you see ground beef and chicken and pork going up at the supermarket and you think well there's inflation but again on the flip side I also see that those are such highly seasonal and supply and demand driven that it's hard to rest that solely on the shoulders of inflation on is the value of the dollar going down? Yeah I mean and that's one of the things you've seen in energy prices retail gasoline prices have gone up considerably 30, 35 cents in February and when I heard it on the radio they were saying well let's take that out well if I'm a consumer and especially if I have trips I need to take that's a real true cost and that's the one that ends up stinging and so if we're concerned about the wellbeing of U.S. citizens those who are really struggling but still need to travel and the price of fuel goes up by 15% that's significant but if I was gonna play their advocate and say why they do it what costs typically have the most volatility unrelated to the buying power of the dollar? I mean so the price of couches just does not go up that often and that frequently and so when you're thinking about inflation that's your benchmark or the price of glassware or whatever the case may be food and energy costs do a lot of this and it's not necessarily that the overall buying power of the dollar is declined it's just that we had supply chain problems or something like that and so they wanna remove some of that but I also get the other point so yes I'm the typical wishy-washy waffling economist but I do see both sides but I tend to look at these the food and the energy thing is fine as long as you're looking long-term I mean I don't think anyone would disagree with that but the problem is when they look at these inflationary numbers they're trying to go quarter by quarter by quarter and Tim can show some graphs that a quarter's volatility can be quite high but if we're looking at 10 years that's a different kettle of fish so to speak so right now the indicators are that there's not a lot of inflationary pressure the job numbers though better are not great I mean they're a lot better than they were about this time last year or a month from now last year 11 months ago but still not good housing prices are actually pretty strong right now but again that's another demand-driven problem we have this big group of so I just had a thought I guess I could define inflation as if the price goes up and the buying power goes down regardless of the reason then it's inflation by definition but that's a whole nother thing anyway I don't see that in the traditional definition there just doesn't seem to be a lot of inflationary increase there just doesn't see an upward movement and inflation going on right now and that's why they haven't taken any action just because people are afraid of it in markets doesn't mean it's true Frank can tell you that very very well the fundamentals do not have to support crazy behavior in the market and that's kind of what we've seen with these yields and interest rate movements nothing's really changed except for people's impression of what might happen that's it not that that's irrelevant only that it's one piece of a very big pie well if there's no more questions I'd want to thank everybody for joining us today thank the panelists I hope you have a great weekend even though the snow is back at least here in Fargo bye everybody