 Well, good afternoon and welcome to this week's agricultural market situation and outlook. My name is Dave Ripplinger. I'm an extension economist with NDSU Extension. This is part of our ongoing series on what's going on in egg markets, especially as they're impacted by COVID-19. With that, I'm going to turn it over to Brian Parman. Hey, thanks, Dave. So I'm back after a week off last week, but some stuff has happened. We got a new monthly employment report just came out this morning, and the continued weekly jobless claims. So I built this graph from the St. Louis Federal Reserve website. They have a nice feature that allows you to build graphs on their site and download it. And this is just a different representation of the same information that I've shown before of the weekly jobless claims reports. And so you'll notice when you look right there, those first few weeks of the COVID crisis. They had very extremely high weekly jobless claims, people filing for new unemployment benefits, exceeding six and a half million for two weeks, just following the last half of March and early part of April. But since then, it's been trending downwards. You can see that weekly jobless claims have been, ever since that third week of March or so, have been declining steadily. This last week, below two million for the first time since the crisis started. Now keep in mind, these are weekly jobless claims. So some of them are new people being added to the unemployment payroll. But you can see on the next chart what we're really talking about and what most folks are concerned about is the continuous jobless claims. Because you can file for unemployment and get a new job in relatively short order, maybe a week or two, or it can take much longer. And what you'll notice here is toward the middle to the last part of May, the week continuous jobless claims have actually started to decline. In other words, some businesses, those businesses that are opening back up, some of the jobs are returning and folks are able to find unemployment. This kind of peaked there mid-May for the continuous claims. And then has tapered down a little bit. Now, you'll notice that the weekly jobless claims from the previous slide and the continuous ones do not add up. Because again, just because somebody filed for unemployment a week or two ago doesn't mean they didn't find another job in the meantime. And therefore this continuous claim, while still very high, still very high, has basically declined some and stabilized. So the report that came out this morning is the June 5th jobs report I'm calling it, and expectations were that we were going to approach 20% unemployment for the month of May. And at the end of April, it was about 14.5, 14.7%, actually. Well, it turns out that the expectations were way off and the report was a pleasant surprise, actually. Because the US economy actually gained two and a half million jobs in May. That means we had two and a half more million jobs gained in the month of May than lost. And so the unemployment rate actually dropped from 14.7% down to 13.3%. So this is a big change or a big difference from what was expected. And what the data actually shows has taken place. And that's the big reason that the stock market was way up today was the big difference between the expectations and what actually happened. You'll hear the marketing talks when it comes to commodities and so forth. When the USDA reports come out, the big swings in the market occur when the analysts' projections are missed one way or the other, either bearishly or bullishly, same thing happened here, but this was a bullish move. So one of the things that is a continued concern and something that we're going to be focusing on going forward is of the businesses that we're able to return, what does it look like for them right now? And just an example, if you think of a restaurant or some of these hospitality type industries, social distancing is expensive. When you think about the fact that you've got reduced business hours in some cases because they've got to do more sanitizing and cleaning. And so they're not able to stay open as long. Stores are doing that, for instance, like Home Depot had been doing that or Menards or whatever. Then you've got increased costs of all this equipment and everything that's needed to operate. And then you've got the same overhead, if you think of a Buffalo Wild Wings, for instance, the building didn't get any smaller. It's cost the same heat and cool, the whole thing. But they're only putting in a third as many tables or half as many tables. So the number of customers and the amount of commerce that they can do is greatly reduced. So they're open. But there's a good chance they're not bringing in the revenue that they need to continue to operate profitably. And then the other part is consumer behavior. There's reports out that the consumers are not returning to their habits as they were before the COVID crisis began, which is understandable. We kind of expect that. But there again, you have this issue of, okay, the businesses were shut down for two, two and a half months. And then they are able to reopen, but they only have 50% or however percent of the revenue going forward, and that's a big problem. So here's an interesting bit of information on this slide here. And it talks about survival after a disaster. So we don't have any history to rely upon when it talks about the general economy going forward after something like COVID, but we can maybe kind of look at what happens after other disasters. Okay, for instance, hurricanes and floods and wildfires, those kind of things, tornadoes. And so FEMA has collected some data as well as the small business administration. And one of the bits of information they put out is that 40% of small businesses never reopen after a disaster. They get destroyed, never to reopen. Maybe they take the insurance money, maybe they weren't insured. Maybe whatever the case may be, they never reopen. Then 25% go on to fail after one year after a disaster within a year. And then 90% eventually fail within two years after a disaster. Okay, so that's a huge percentage, 90% fail within two years after a disaster. But I do put in this little caveat at the bottom. Under normal circumstances about 30% of small businesses fail in the first two years and about 50% fail in the first five years. So it's a little bit misleading to say that 90% of businesses are going to fail and it's all because of a disaster. There's a big percentage that fail anyhow. But the other part of that is these failures to reopen also include not startups but established businesses that were once profitable and never reopened. So I'm doing a little bit of apples to oranges comparison here, just the fair warning. But this is the best kind of information that we have to kind of assess going forward how many of these jobs are actually going to return in the future. And when you look at the market today, you can see it's up pretty high. In fact, it was well over 27,000 point out. And the high watermark before was about 29 and a half. So there's a lot of optimism among investors right now. But I really think that there's a lot that we just don't know how this is going to shake out. And there may be some misplaced optimism going on. So the Congressional Budget Office, they put out their projections. This report came out the beginning of this week and the link for it is at the bottom of the slide if you want to look at these charts and the little write up. But the projections for the second quarter, real GDP was revised down 13.3% from the January projection. And what this chart shows is the cumulative loss in dollars for the next 10 years due to COVID. And the way to read this is if you think about compound interest, you get this exponential growth in your 401k or in an account. At the same time, if you knock out 20, 10, 20, 30% of an economy, yes, it will be recovered. But you almost can never get back what was actually lost because as time goes by, not only do you go backwards, but you lose the gains that would have happened, that would have been stacked on top of it. So basically they're projecting over the next 10 years, we lose almost $16 trillion in real GDP because of the COVID crisis. And then the next slide shows the percentage difference from nominal versus real GDP and projecting out to 2030. So there was a big dip and they're thinking that it may take 10 years in real terms to get back the lost economic activity and the lost output due to the COVID crisis. 10 years may sound like a long time, but when you go back and look at things like the depression or even just as recently the great recession, it took the better part of half a decade or so to recoup a lot of that. So 10 years, a 10-year planning horizon on something this catastrophic, that's really not outside of the realm of possibilities. Now a lot can happen in 10 years. We may have a period of rapid growth, but there again you ask yourself, had this not happened and you still had that period of rapid growth, where would we be after that? But that's just something to think about going forward. The biggest, the key points I want to make though is as we reopen, as the folks, the fortunate folks wind up going back to work and we find out exactly what businesses remain viable, remain profitable, or those that are going to wind up limping along for the next few months after reopening and wind up eventually folding because things have changed. The environment has changed so much that they just simply can't keep operating. So that's what we're going to be watching really closely going forward. Going to have a big impact on consumer demand and on consumer sentiment as well. So with that, I'll go ahead and turn it over to Dr. Frayn Olson. Thank you. All right. Thanks, Brian. This week I would like to try and kind of do a springboard off of some of the things that I talked about last week about, you know, preparing kind of a skeleton or a general outline for a marketing plan for your crops. And one of the challenges that I commonly face as I talk to farmers and try and help them understand what's going on in the marketplace and help them, I guess, form the right set of expectations moving forward is they, and we're all guilty of this, but we tend to get this backyard syndrome where we look at what's happening in our local community or what's happening within the region or even what's happening within the state. And we say, well, you know, why doesn't the market respond to this? Don't they know that we're having problems or don't we, you know, don't they understand that we're having these kind of particular issues? So I want to try and put some context behind what's happening in the marketplace. And as I said last week, we tend to see some pretty substantial market volatility, both up and down during this June, July, August time period. And again, a lot of that is supply driven. It's concerns about potential weather, about the size of the crop as we get going forward. So I want to put some of that back into context and see if I can try and think help you think about what's happening in your backyard versus what's happening more on a national scale. So if for my first slide, I wanted to give a refresher. This is the most recent drought monitor index for North Dakota. And North Dakota is kind of in a weird scenario right now where we really have the tail of two states. If you get into the western portion of the state, as the drought monitor indicates here, it's starting to get pretty dry. And there's areas, even this spring, as farmers were seeding, trying to get the fields ready. There was some concern about dry weather and dry soil moisture, whether we're going to have enough moisture to be able to get the seed out of the ground, let alone get a crop established. And then in the eastern part of the state, it's just the opposite. We've got a lot of farmers talking about large portions of their farms are going to be prevent planted. Some counties may have 30%, 40% of the acreage in the county that's going to be pp'd this year. And so we really have this dichotomy going on. I talked to some farmers and say, I can't get my crop planted. And the other farmers are saying, man, I don't know if I can get my crop out of the ground. So this is just a drought monitor map of North Dakota. It's the most recent one we just received. I do want to also, just on a sidebar, talk a little bit about how to read or interpret these maps. And if you notice they're color coded on the right hand side, you notice that if it's white, there's no drought detected. If it's yellow, it's abnormally dry. The D1, which is kind of that beige color, is a moderate drought. And then it gets, again, more and more severe as we go forward. And sometimes we get a little bit, there's a misunderstanding about how to interpret this. So on my next slide, this is actually directly from the drought monitor folks at University of Nebraska Lincoln that put this together on how do they define what is a D0, that abnormally dry versus a D1, which would be a moderate drought. And I want to point out, if it's in the yellow category, all it's saying is that there's some short-term dryness and that it's either slowing planting or slowing crop development or pastures are slowing down because it's getting too dry. And we're starting to notice that things aren't going quite as well as we'd hoped. And hopefully with one or two really good rain showers that that will turn around and disappear fairly quickly. As we move into the D1 category, so that's in a region where there's some observable crop damage or pasture damage because of dry conditions. It's not that it's irreversible damage, but at least we're starting to notice as you're driving by that yes, we can physically see that there's some problems going on, the streams and reservoirs, your stock ponds or wells are now getting lower levels. There may be some water shortages that are starting to develop or are imminent. And so again, in North Dakota right now, that's kind of the region, that's kind of the situation we're in in the western part of the state. So there is some formal definitions that are used for these different drought categories. On my next slide, I wanted to also give you an idea of the prevent plant. Okay, because in the eastern part of the state, I get a lot of questions about prevent plant, about crop insurance issues, how many prevent plant acres are we actually gonna have? So I went back historically and looked at the black line is the historical prevented planted acres in North Dakota. And as you can see in 2011 and 2013, we had these big spikes in prevent plant acres. I mean, those are some very, very wet years in particular in 2011. So that's a 17 year time period from 2019 all the way back to 2003. Now what I did was I looked at two different ways of kind of calculating an average. One would be the blue line, which is a simple average. So you just take all 17 numbers, you add them all up, divide by 17, you get an average. And if we do it that way, if we calculate kind of what's typical or will be an average prevent plant level, we're looking at about 1.2 million acres across the state. Roughly we have about 25 million acres in the state that can be planted to crops and or hayland. So if we look at kind of what is average or typical, you could say, well, a simple average about 1.2 million acres. But we also recognize, if you look at what happened in 2015, 16, 17, and 18, we had essentially very low levels and almost zero prevent plant across the state. So another way to think about it is using Olympic average where you take an average, but you exclude the highest number and you exclude the lowest number and average the remaining. So if we average the remaining 15 years, we come up with about a million acres of PP as kind of typical or average. Now, if you notice in the black line, the little dotted portion line on the very right hand side, when, because I'm getting a lot of questions again from farmers saying, man, what if we lose a bunch of acres and PP, what crops are we gonna lose acreage, planted acreage in? And I wanna emphasize that when we looked at the perspective plantings report, so that was a survey taken in the first part of March. It was reported at the end of March and USDA was asking surveying farmers, given what you see, what do you intend to plant now in 2020? Well, when I reviewed those numbers and I started looking at the data, in order to get the acreage levels in the perspective plantings report to balance with the numbers of acres that we actually plant and harvest in the state, I had to imply or kind of assume that we were gonna have about 800 million acres of PP. So knowing again in March, some of the farmers can say, well, I know already, there's gonna be some acres, I can't get seeded. So in the perspective plantings report, already there was kind of implied that there was about 800,000 acres that would not be planted. So if we say a typical year we're gonna have a million or a 1.1 million acres of PP, okay, that isn't that far off of normal or off of average. Now, I don't wanna say, I don't wanna imply that that's not important because obviously if your farm is in the middle of those areas where you're gonna have 50% PP on your particular farm, I mean, that's something that's extremely difficult to deal with. I'm not trying to downplay the importance of prevent plant, but in the big picture context of what the markets are looking at and thinking about how many bushels can be produced across not only North Dakota, but also within the United States, we've already got some of those prevent plant acres covered. So on the margin, we'll have to wait to see my best guess right now today, given kind of a survey quick informal survey of what's going on. I'm expecting we'll get one to 1.1 million acres of PP this year. So I think we'll come up with something normal within North Dakota. So my next slide, I wanna take a little bit bigger picture, bigger picture view of what's going on. Cause again, I get these comments from farmers saying, well, I've got a really wet area in my area or it's very, very dry in my area. Why hasn't the markets recognize that? Why aren't they responding to these problems that are showing up? And part of the reason for that is, your local markets will react, but the futures market likely will not, unless it's a major problem, because the futures market is really trying to look at what's happening nationally and to some degree globally. And so if you have an area, your local areas having problems, it may not actually be a big enough issue to actually cause some problems or a price response. Now I do wanna go through corn, soybeans and wheat and cause the response by the marketplace to whether concerns or weather issues are gonna be slightly different. So let's talk about US corn production. And what we're trying to do here is count bushels produced, not acres planted or yields per acre. This is actual, how many bushels are produced in each county? And again, this is shaded, this is from USDA NAS. The darker the green, the more bushels are produced. So you can see that for corn, even though corn has grown in a wide geographic region in the United States, the core producing region, those areas that really have the most bushels produced are heavily concentrated in what is typically termed the Western Corn Belt. It's primarily Iowa, Illinois, Nebraska and Minnesota. Now we talk about the I States and that's typically referring to Iowa, Illinois, Indiana. And Indiana is definitely an important corn state. I don't wanna just diminish that, but when you look at where are the big, big bushels produced, it's really in those four states. So this is a picture of you. On the next slide, I prepared a graphic to give you some historical perspective. So the blue line on top is Iowa. How many bushels of corn has Iowa produced in the last approximately 20 years? The maroon line is Illinois, then we go to the black line Nebraska and the gold line is Minnesota. So those kind of those top four states, if we think about Iowa, Illinois, Nebraska, Minnesota, those four states kind of in a typical year represent about 55% of all the bushels produced in the United States. So when we think about weather and weather problems and or pollination problems, or when will the grain markets, the futures market for corn start putting a risk premium back into the marketplace. If we start to see some adverse weather or some potential production problems in one of those four states, I can assure you that the futures market will respond. Now it's not to say that they're not gonna pay attention to what happens here in North Dakota, which is the red line on the bottom, but it's just our corn production isn't as large. It's not gonna have the psychological impact it would, versus what was happening, let's say in Iowa or Illinois. On the next slide, we do the same thing for soybeans. Okay, so if you'll notice, yes, soybeans are grown across a very wide region in the United States, but you also notice that the production density, you know, where is the heavy concentration of soybean bushels produced is much more spread out. It's over a much wider geographic region. So again, it's not to say that a weather problem won't impact the soybean markets. It's not that the soybean futures market won't respond to some production problems, but it's not gonna respond as aggressively, especially if it's in one of those core producing regions like in Iowa or in Illinois. And you also now notice that the soybean producing region is not only spread out geographically east and west, but it's also spread out geographically north and south. And so again, the odds that a large portion of the growing region of the soybean crop will have a problem is much lower than, let's say, the corn area, which is much, much more concentrated. So on the next slide, again, we look at state by state breakdown at the actual numbers. When we look at soybeans, there's really kind of the top two states, which is Illinois and Iowa. Now notice that Iowa and Illinois kind of flipped in their importance. Iowa is the big corn state with Illinois being second. And now Illinois is the number one soybean state from a bushel standpoint with Iowa being second. Then of course we get into Minnesota, which is the gold line and the Indiana, which is the black line. And also I just wanna point out on the red line, the highlighted red line, which is North Dakota. I mean, we're part of the mix, right? North Dakota is an important soybean producing state. So what happens here does have an impact. And the markets definitely do pay attention, but we're part of kind of that second tier pack of states that are major producers of soybeans. So again, when we look at the diversity, the range of where soybeans are produced, if we were to look at just Illinois, Iowa and Minnesota, those top three states, they produce approximately 20 to 23% of the total soybean bushels produced in the United States. So yes, they're important, but they're not as important. It's not as heavy concentration of production as we see in corn. So on the next slide, I prepared the same kind of state-by-state breakdown for all wheat. Now wheat is a little bit different animal or different scenario, because yes, I'll show you on a map in a second here, but we do have a fairly broad geographic region for producing wheat, but we do have two dominant states, just like we do in soybeans or in corn, and those being North Dakota and Kansas. And depending upon the year, North Dakota and Kansas always kind of competes back and forth on who produces the most bushels. And I have some friends in Kansas, and so that's kind of a running joke or running gun battle between us on who can produce the most wheat this year. Now, recognizing, of course, that there's a difference between the winter wheats that are growing in Kansas and the spring wheats that are growing in North Dakota. Montana's the third largest state, and Montana's a little bit unique because it's not only a pretty large producer of winter wheat, but it's also a pretty large producer of spring wheat. So there's regions in Montana that are really winter wheat dominant, and then there's areas that are spring wheat dominant. And if you think about the growing age of fruit wheat, I mean, it really starts down in Texas and runs through the middle part of the state, the Great Plain States is the dominant area for wheat production and runs all the way up into Canada. So when we think about weather conditions and what might cause a rally in the wheat market as a broadly defined as the wheat market, again, we can have Texas being in a drought and North Dakota being in flood conditions and sometimes those two offset each other when it comes to total wheat production. So if we look at the map, so for the next slide is a map of the winter wheat producing regions. Now you usually think about hard red winter wheat being in Texas, Oklahoma and Kansas, and just as a sidebar, both Texas and Oklahoma are now harvesting wheat. The last report that I got was the Texas was about 35% harvested and the Oklahoma was about 21% harvested. So winter wheat harvest has already started down south. But I wanna, again, just for winter wheat as a reference points, I wanna isolate Montana. There's quite a bit of winter wheat produced in Montana as well as in Washington state and Oregon. But we also have some soft red winter wheat that's produced in Southern Illinois, Kentucky, Tennessee and also in the thumb region of Michigan. So again, the geographic growing region for wheat is very, very broad, especially for winter wheat. The next slide is for spring wheat only and as most of you recognize spring wheat is a very northern plains kind of wheat production. So when we think about what influences the spring wheat market separate from the winter wheat market, this is, again, a very concentrated production region. So on my next slide, it just graphically shows North Dakota's by far the number one spring wheat producer in the nation with Montana being number two and then Minnesota and Montana kind of switching back and forth between two and three. So what happens in North Dakota has a huge impact on the spring wheat market and in particular, the potential premium that spring wheat has over winter wheat. So it's not, you know, the wheat complex is all intertwined winter wheat and spring wheat kind of interact with each other but we can look at what that premium between spring wheat and winter wheat is and that spread is really heavily influenced by the kind of production we have here in North Dakota. So yes, North Dakota is important, is critically important for wheat and in particular spring wheat. They're relatively important for the soybean market but relatively small when it comes to the corn market. So what happens in our backyard may or may not have an impact on what's going on nationally. My next slide, I just wanted to refresh everybody's member on, you know, this is the drought monitor map for the whole nation and there's several different ways we can kind of look at the soil moisture and where do we sit right now with soil, with moisture conditions and the potential for production problems as we move into these critical summer months. And typically this is the chart that we look at. On the next slide, I wanted to show some alternative ways of looking at this USDA crop explorer. They update these maps about every two weeks. So it's not on a weekly basis but every two weeks or so and these are computer generated graphics. So these are the soil moisture estimates for the subsoil levels. And if you compare this map to the drought monitor map, there's gonna be a lot of similarity. So this is subsoil. This would be deeper soil levels and how much moisture do we expect to see in that deeper soil profile. And again, if you notice not only what's going on in North Dakota but also in more importantly what's happening in Iowa and Illinois and Missouri and at least in Eastern Nebraska, subsoil moisture is in very good, very good shape. In some cases you could consider it potentially excess. On the next slide, which is my final slide, this is the computer generated estimates for the surface moisture. So think about this as kind of the typical root zone. So again, when I know we're talking to some farmers even in Eastern North Dakota, there's a few of them that wouldn't mind a little shot of rain because that top layer is getting a bit dry now after it's been tilled, but knowing that the deeper soil profile is still very, very wet and mucky. But again, I wanna draw your attention to what's happening in Southern Minnesota, in Illinois, in Iowa and Eastern Nebraska that their surface moisture conditions right now are still very, very strong. So it's gonna take some continued dryness, some continued heat to be able to really put a major lift or at least a weather premium into the corn and soybean markets. So with that, I'll kick things over to Tim. Well, good afternoon, everybody. Tim Petrie, Extension Livestock Marketing Economist. Go to my first slide, if you would. In the past, I've been talking a lot about what markets, cattle markets in particular are doing both in North Dakota and the US take a little bit different approach today. USDA Agriculture Marketing Service did not report feeder cattle markets at all in North Dakota this week because of the very much slowing up of receipts, which is a normal thing this time of the year. So not much to talk about there. If you do still have feeder cattle that you need to market, probably very important that you do talk to your market to make sure some of them are going to an every other week sale and make sure that they'll have enough buyers there and so on if you still have to market cattle. But I'm gonna take a little different approach and piggyback on what Frane talked about last week. He talked about a marketing plan and actually showed this slide and did a very eloquent job of explaining a marketing plan and so on. So I just stole this slide from him. And when he talked about a marketing plan, he said we have to set pricing objectives and timing objectives and choose the correct marketing tool, monitor conditions and be flexible and for sure to implement it. So if we go to the next slide, that's gonna be my main talk here. And I know probably most of you on this call do have an interest in crops while less of you have an interest in livestock, but just mentioned some tools and some other things and show a simple marketing plan. And I don't have enough time to cover in detail what I do. And so when we move along here quite quickly, if you need more information on some of these marketing tools and so on and want more education, I encourage you to talk to your extension agent. And I've been giving talks on price risk management all around the state now by Zoom, which I'd prefer to do live, but contact your extension agent and we can do more programming if you want to. But anyway, here's some price risk management tools. Why probably is price risk management more important than maybe it even has been in the past? Well, we have an unprecedented pandemic, we have an unprecedented economic collapse, although maybe coming back a little bit as Brian said, and we have unprecedented extreme social unrest going on, all which one of them alone would cause volatility in the market and we put through all together. I mean, it's what in the world is gonna happen. And I'm gonna kind of mention a couple of different things here. A couple of weeks ago on this call, one of the question was a producer said, I'd been at the auction market and at the auction market, somebody said we're gonna have $350 calves next fall. For a 550 to six weight steer calf, that means 60 cents a pound. So if you're sure we're gonna have 60 cents a pound calves next fall, I would for sure say that you better do some price risk management because they're 160 now or $1.60 and they lose over a dollar. But, and I just had another call earlier in the week from a producer down Southwest to Jamestown has a hundred cows said I don't know anything about price risk management. I don't know anything about futures or options or any of these others. What should I do and how can I learn and can you help me out there? So again, I gave some guidelines, actually talk more about livestock risk protection because that's something that can be used by small producers. And again, there's a lot of, not a lot, but there are a number of alternatives here starting off with the first one. I also had a call from a producer in Western North Dakota and he had contracted his six to six 25 steer calves earlier this spring, right? When the pandemic started for $1.65 a pound. So, but his question was, is he gonna get a CFAP payment? And the answer is no, since he already contracted the calves, he's not gonna get his $33 for those calves, but I told him you're way better off with that one 65 contract you've got anyway. So anyway, you see there's a wide range in producers interest and actually that producer was a member of a marketing club and for a number of years. And so they were talking about things. So obviously did the right thing all the way to what is the futures market and so on. So, here are some of the tools and we can do a cash forward contract to that producer in Western North Dakota did a contract with a feedlot in Nebraska. We have video and internet options. We have two futures markets for livestock, one for fed cattle, one for feeder cattle. The feeder cattle contract is for 800 pounds steers and it's 50,000 pounds. So, it's a pretty good number there. I'm gonna show you a marketing plan kind of for 100 cow spring calving herd. And so, we had January 1st, 995,000 beef cows in North Dakota, 8,000 ranchers or producers with beef cows. So that means the average herd size is about 124. And so I'm gonna mainly refer to 100 spring cow calving herd. And again there when we look at some of the numbers that a futures contract may not work the best because of the size of it. If you're using futures and options and I'm not saying not to and I have many friends that are brokers and so I'm not discouraging you from using that but you have to know what you're doing. And, you know, livestock risk protection is sold by crop insurance agents. And so, when I get to my example, you know, I'm not necessarily promoting their business or taking away from brokers or anything. I'm just showing you kind of a starting point maybe that we can use. But, you know, so, do any of these fit into your marketing plan? Do you need more information? Again, let us know, but for sure I do know if you don't manage risk, risk will manage you. So, go to my next slide. Here is what, you know, we're all interested in what calf prices are gonna be this fall. And so, here's what they've done the last three years and the red line again, like I've been talking about these cash market charts all the way through our webinar series here is what they've done this year. They were 180 the last three years there in April and we were lower than that because of all the information. But kind of interesting, you know, last week we were only a couple dollars away from where we were last year. But I know we don't have a lot of 5.56 weight steer calves to sell and there was a good demand because, you know, as Frank showed on the drought monitor down to the south and so on moisture conditions were good except, you know, getting dry up here in North Dakota. But the big question mark then is for this fall what are they going to be? And, you know, normally we would be worried about whether and what corn price is gonna do that would be the number one that affects them. But now we've got the pandemic and economic collapse and social unrest and everything. So, you know, I don't think they're gonna be $60 is the one producer said. But, you know, now I'm saying, you know, for sure they could be 10% lower than last year but they could be higher and they're the same now. But basically what we're saying is there's a big question mark of what calf prices are gonna be and a lot of things can affect it. And so, you know, is there something that we can do about it? So go to our next slide and I'm gonna talk about livestock risk protection. Again, I'm not bad mouthing futures or options or forward contracting or anything else. But the nice thing about LRP maybe the major advantage is you can do any number of head. You can do one head if you want to or one, two, three or four. And so particularly again, about half our producers are under 124 head of beef cows. And so they have smaller numbers. And so if you start doing a step up marketing plan of just a few, maybe this would fit in. So this, you know, LRP contracts are available for under 600 pound steers and heifers and over 600 pound steers and heifers. So I just picked the steer information that came out from USDA last night. It was good till nine this morning. And so every day a new one will come out this afternoon after four o'clock. And so, you know, you can see what that does. So I've just highlighted again, starting with the red highlight on the right, the red box on the right, the steer weight group called Steer Weights One is the under 590 steers. USDA now is saying, well, go away to the right hand box. This 21 week contract gets us into the end of November, or excuse me, end of October, which is a kind of a typical marketing time period for calves end of October, first in November. And again, there's a contract for later on in November, actually a little bit higher price offering for end of November and their expectations were higher, but go back to the two boxes in the middle there. USDA's expected value for calves on October 29th, and this information came out yesterday was 151. So they offered a price of 149.60. And so move over there, you know, their premium is shown under cost per hundred. And again, I'm gonna lose some of you. So again, for those of you that want more information and a lot of people maybe on this call are interested in livestock, if you want more information, I'll give you, go to your extension agent, we'll set up a meeting and I'll give you a 50 minute talk on it, so I'm just hitting the highlights here. So, you know, relatively expensive now because October is a long way out and a lot of uncertainty, but for about $7 a hundred weight, you could lock in 149.60. So again, if you're that person, to think calf raises are gonna be 60 cents, this might be a good thing to do. And you know, again, we have going down there, we're a whole bunch more offerings for the, there's a 13 week contract and a 17 week contract and a 21 on down. So I just picked a 21 week contract for October 29th. And way more offerings on this all the way, you know, down to, I think you could have got a $1.29 pretty cheap for only about a dollar or something, but you know, here's, again, you can do any number ahead that you want to, there's a new one every day, the website is shown there on the bottom where every day this comes out, you need to go through your crop insurance agent to get this and I'm gonna move to my next slide. Again, if you want more information, you're gonna have to get it. So I just decided here to do a starting point and again, you really have to work with your lender, I think on a marketing plan and they may required and again, you, you know, some of you may have 30 cows and some of you may have 300 cows and so a lot of different scenarios there, but I just picked a hundred cow spring calving herd as an example, again, that's about the average in North Dakota, half under that, half above that. But the nice thing about a hundred is you have 50 cows, you can cut this in half or if you have 300 cows, multiply by three or whatever. So for this typical hundred spring cow herd, I just say that we're gonna have 46 steer calves come fall and 46 heifer calves. That's a 92% rate of those hundred cows that we have. So, but we're gonna keep 20 heifer calves back. So to sell on October 29th is our expected marketing date. We're gonna have 46 steer calves and 26 heifer calves to sell, okay? So we need a goal, how much are we gonna pre-price? So for maybe for the beginners, they just wanna learn like my friend down there, Southwest of Jamestown, I don't know anything about it, how can I learn maybe this year, we might wanna do 50% of our production or maybe 25 production or whatever it might be. And then we wanna know what the expected price trend is. If we know it's going up, we don't need price protection. If we know it's gonna go down, we need something. If we don't know what it's gonna be, maybe LRP allows us to lock in a floor price but not a top price and let the market go up. So as a marketing tool then, like we said at the beginning, we need to pick a marketing tool. So I'm just saying, let's do a look at an LRP under 600 pounds cause we can do smaller numbers. But again, if you're using futures or options or if you forward contract or using video in the past and you're familiar with them, go ahead and use them. I'm not saying not to. So to begin with then our strategy is we will look at the 21 week contract that I just showed you. And let's say that we're going to just do, to begin with, we're gonna do a fourth. So we've got 46 steers but we're gonna do half of them as 50%. So we're gonna do 23. So we'll do 12 steers here to begin with and then later maybe do another 11 to give us the 23. So as Freen said and as mentioned on the first slide, we need a price objective and a time deadline. So my price objective now is 155. Again on the previous slide, we said USD is saying it's probably gonna be 151. We could lock in 149. So let's watch it. If it goes up to 155, let's do it whenever it hits 155 or for our time deadline, let's use June 30th. If June 30th gets here and we haven't done 155, whatever they are, we lock in 12 steers and seven heifers. That's seven heifers at 140. That's 10% less than steers is what USD offers. The heifers are always 10% under the steer. So either we take our 155 and 140 or we do for sure do something on June 30th. Then for our other fourth of the production, we can wait. Then we move to a 13 week contract. And so we have 11 steers and six heifers left to complete our 50%. So here we got a time and a price objective of 165 and 149. If it gets there on whenever it gets there, even before June 30th, if it gets there, let's do the rest. We have to do something by July 30th because that's the last day, the 13 week contract to get us to the end of October there. So we have to do something before July 30th. So if it isn't 165, we do that. Okay, so then we've got half our production locked in at some kind of a price. Then we just wait for October 29th. We sell our livestock and we close out our LRP contracts. If we do it tonight, then it would be one day later. And if the market went down, we'll get it paid accordingly. If the market went up, we don't buy insurance, hoping we're collect anyway, well and good. So that's just a simple starting plan. Again, they can get way more complex than this, but it's something for those that have never done it and want to get some experience may try again, go to see your lender for sure when you're doing this and set up a marketing plan. So with that, I'm throwing, turn it over to David to talk about the energy sector. Thanks, Tim. Dave Ripplinger, Bioproducts, Bioenergy Economic Specialist with NDC Extension. I just have brief comments this week about what's going on in the ag energy sector. Starting with corn ethanol, we're seeing this continuation of increased production and increased use. For the second week in a row, we had domestic corn ethanol production exceed what was actually used by refineries and blenders. So stocks in total built up just a bit, but in terms of use it outstripped it. So the days in storage actually went down just a bit. Looking at what's going on in terms of margins with the self-decoder prices from USDA, kind of comparing what we had a month ago. So these prices are reported daily. Looking at that first week in May, the price of corn has gone up about 10%. That's what the self-decoder refineries were giving for their cash bid. Price of ethanol is up substantially, almost 40% in a month. Distillers grains has declined quite a bit, in this case, down to $135, $108, or excuse me, a ton or a 20% reduction. Kind of overall, kind of making that into what refiners see is the simple crush on a bushel basis is increased by a third in a month to $1.27, which is substantial. I mean, that's the point where your most refineries should be covering almost all of their cash costs outside of corn and also including natural gas, labor and the like, and probably being able to do a little bit of debt service. So those are really strong numbers and a good sign. And just to put things in perspective, the market essentially saw a 50% reduction in use and production beginning right after the middle of March when COVID hit, and now we're up 40%. So now 50% up 40%, but of course that doesn't get us back to where we started. But just in the last week, the amount, or excuse me, these are numbers from last Friday, that week ending on the 29th, that increase in corn use for ethanol, that's bigger than the North Dakota corn ethanol industry as a whole coming back online. So that 4%, 5% of the whole picture is a substantial amount of production, a lot of refinery capacity coming back and a lot of corn that's being used. And so we wanna obviously continue to see that grow through the summer months and hopefully have somewhere close to a full recovery as soon as possible. Just gonna talk a little bit briefly about what's going on in crude oil and the petroleum complex. I showed a slide like this about a month ago, basically just to illustrate that things are out of whack, that we had more supply than demand. That's continuing in almost to the same amount. So a month ago, we had 1.9 million barrels a day of excess supply, that's now down to 1.6. What we've really seen is this isn't quite even. And so we've seen production decline significantly. We've seen use decline significantly, but we've been importing a whole bunch more and exporting a bit less. And so things continue to be quite out of whack and something's gonna give. Don't have slides this week to talk about how stocks are building, the pressure is really off, cushioning, which is what I was looking at about a month ago and it's spreading to other areas. You know, we go back to late April, we saw that negative price for West Texas Intermediate, which really kind of cleaned things up for that market, for that part of the country and for that product. But in other parts, there's still a number of issues. My last slide is just to talk about what's going on with diesel relative to gasoline. I haven't talked about diesel at all in the last three months. What was originally expected was that diesel supply and use was gonna stay relatively stable, to see somewhat of a decline, but that the bigger decline would come in gasoline. And that really hasn't been the case as of late. And so if we look at that green line, we see gasoline use plummet almost immediately from mid-March, shelter in place, orders, limited travel both with commute to work and other travel stopped almost immediately. Well, diesel supply stayed constant and a little bit of a later dip. But now what's troubling is if we look at what's happened since the beginning of May is that diesel supply, and this would be going from a refiner or a blender to a retail market, has really seen a substantial decline. And this is troubling for a couple of reasons. One, you obviously want to see use and activity here in North Dakota being an oil state. This obviously has some implications for demand for crude, but we're actually hitting what we expected was gonna be the other way. And so if you think about, again, every barrel of oil can be cracked in a certain proportion. And initially we thought that we would have high demand for diesel and not much for gasoline and we'd have difficulty with oversupply of gasoline. Now we're actually seeing the opposite of that where gasoline is being pushed all the way through the system, but the diesel stocks are really starting to add up. And this is actually compounded even more because a lot of the jet fuel kerosene is kind of being pushed as best it can into this diesel market. And so we see this continued issue. This is also really troubling too because I think of diesel as just a slight lagger in terms of being an economic indicator. And if you think about what diesel is primarily used for transportation and freight in the United States, so obviously there's less trucks moving, less materials. Some of that might be consumer goods, but also production goods, intermediate goods moving throughout the system. And also a little bit used for agriculture planting is nearing an end. So we're not gonna see a huge pickup on that. And it's really kind of troubling and possibly a sign that with all of the good news, with like today's employment report, that there's still a lot of trouble on the horizon, especially when you think about the industrial sector within the United States and transportation on the freight side really not picking up. And so that's what I had for my part of the presentation. And with that we'll open it up for questions. Again, if you have any, please use the Q&A tool and we'll moderate using that. If you did happen to use chat, we'll look at that as well. Other notes, just as you know, there will be a survey once you close your Zoom window and that if you'd like to view a recording of this or see a copy of the presentations, they're available on either of these two sites and you're very welcome to go back to those sometime in the future. I'm not seeing any questions coming up right away, so I double back to the panelists and ask them if they had any comments or thoughts from others' presentations. I guess I'd like to add one more thing that I, because of time I didn't want to cover unless there were questions. Next Thursday on June 11th is when USDA will come out with their monthly update for the WASI report, that World Agricultural Supply Demand Estimates. So again, that'll be kind of the next round of USDA forecasting and what they see coming on, in particular on the demand side, but also looking at exports and some of the trade issues. So just be aware that next Thursday, USDA will come out with an update report. The June report typically isn't a major earth-shattering numbers. The July and August reports are the ones that really get to be much more interesting. But again, I just wanted to make sure that everybody is aware of that's coming. Thanks, Frank. And here's the question, I believe, for you, Frank. Any comments or information on the quality and bushels of corn being harvested the last two weeks? You know, I have not heard any of the details. A couple of weeks ago, I did talk to a farmer that was harvesting some of the crop left in the field from the year before, and they said, well, you know, the biggest challenge, of course, is getting into the field. But as far as the crop quality, most of the guys that I have talked to that harvested this spring have been pretty pleased. The test weights have come back up again, which we expected to happen because they were lower moisture. There doesn't seem to be any major mold or damage problems to the seeds themselves. Again, it's not a full test weight. We're not up to 56 pounds, but at least the test weights are coming up as it dries. So the biggest struggle right now has always been getting the combines in the grain carts to the field. But I have not heard of any major quality issues, although, again, I haven't talked to anybody in the last probably two weeks, a little over two weeks now. Thanks, Fran. And then there's a comment of a few fields of corn still unharvested in North Central, North Dakota. Yeah, as you travel the state, I know I was out driving around, again, a couple of weeks ago, and as we move, depending on where you are in the state, there are regions that still have a significant number of acres of unharvested corn. They will likely be prevented, planted. And again, I don't think that's any big surprise to anybody, but I am aware that there are still a lot of fields that need to be. Question for Tim. Do you see any additional funding for livestock with CFAP? Yeah, I think that's certainly a possibility that's being discussed now. And again, there's the big bill in the house that would have it, but the Senate is kind of on a wait and see attitude. But I think it's a possibility. You know, we're doing trillions of dollars and eight in different packages. So I think it is a possibility and we'll just have to wait and see. It's all up to Congress, but it is a possibility. Thanks, Tim. And with that, I don't see any more questions. Again, if you'd kindly fill out the survey after you close the window and feel free to check out the recording and PowerPoint, we will be continuing the series throughout the month of June each Friday. And so you're very welcome to participate in real time. Or again, you can check out the recordings if you take an early long weekend, which a few folks have done. And again, I just wish that everybody has a great weekend and hopefully we see you next week. Thanks.