COMING UP ON AGWEEK TV
WE’LL HAVE THE OUTLOOK FOR GRAIN AND LIVESTOCK MARKETS FOR FIRST QUARTER 2022.
A NEW REPORT SHOWS THE U.S. IS FALLING BEHIND ON TRADE.
A QR CODE COULD BE A BOON FOR HUNTERS LOOKING FOR HUNTING LAND.
AND WE’LL SHOW YOU ENTRIES, AND THE WINNERS, OF THE AGWEEK “BEAUTY OF AGRICULTURE” PHOTO CONTEST.
HAPPY NEW YEAR EVERYONE. WELCOME TO AGWEEK TV, I’M ROSE DUNN.
THE EPA HAS RELEASED A REPORT DETAILING NEARLY 3,500 ALLEGED DRIFT-RELATED DAMAGE COMPLAINTS FROM DICAMBA IN 2021.
BUT THE AGENCY SAYS THEY CAN’T MOVE FAST ENOUGH TO MAKE CHANGES FOR THE 2022 SPRAY SEASON AND INSTEAD WILL ALLOW STATES TO TIGHTEN RESTRICTIONS IF NEEDED.
INDUSTRY OFFICIALS SAY GETTING THE GUIDANCE AHEAD OF THE GROWING SEASON WAS WELCOMED. HOWEVER, EPA LEFT THE DOOR OPEN FOR CHANGES IN 2023 AND ENVIRONMENTAL GROUPS MAY USE THE COMPLAINTS IN THEIR LAWSUIT TO BAN THE PRODUCT.
2021 WAS A YEAR OF STRONG PRICES FOR GRAINS DUE TO ROBUST INTERNATIONAL DEMAND. WILL THAT CONTINUE INTO 2022? MICHELLE ROOK TALKED TO AN EXPERT TO FIND OUT.
Joining me is DTN Analyst Todd Hultman. Todd, let’s talk about soybeans first, South American weather and demand will probably be the keys in the first quarter. But the demand situation is different than it was a year ago, isn’t it?
Todd: Yeah, last year we were incredibly focused on China and everything they were buying up. This year that’s not the case. It’s really domestic demand that has this market on fire, particularly soybean meal. There just seems to be phenomenal cash demand for physical soybean meal in the U.S.
Soybean exports are behind where we were last year at this time. So can crush make up for that?
As I look at USDA estimates and try to crunch the numbers, I don’t see how at this point. We’re just about done with our export potential to China. And we’re about 24 percent below what we were a year ago. But I can tell you technically, from looking at the market, the market does not seem to have a problem with that math problem and probably USDA’s estimates are going to have to be adjust some.
So if South American weather stays hot and dry into January, will we stay above 13 dollars?
Todd: That just adds a little excitement to the non commercial side, so you’re right, that’ll be watched very closely. I think we will stay above 13 dollars. The crush value has been incredibly strong. Usually the crush premium is a buck and a half above the soybean price. We’re trading to two and half above. It’s just an extraordinary incentive to keep crushing those U.S. soybeans.
So what is your marketing advice for soybean producers?
Todd: On soybeans, I just see no rush to price things, either old crop or new crop.
So let’s talk about corn because, here demand is strong both domestically with ethanol and with exports, right?
Todd: Yeah. Exports have actually been doing quite well. Of course we don’t have Brazil’s competition this year. They got hurt by drought last year. And the demand from the ethanol side of the market has just been phenomenal here in the fourth quarter of 2021. Now we’ve seen that ethanol price really come down significantly the last, well since thanksgiving. It’s come down over a dollar a gallon. So that concerns me a bit, but even with that drop we are still seeing profitable margins at the plant and very generous bids from the ethanol plants for corn.
So do you think this market is either from a cash or a futures perspective going to be able to continue to hold above six dollars on corn?
Todd: I think that’s probably going to be a bit of a difficult struggle. We could chop sideways a bit in the first half of 2022. And I think any price you can get over six dollars for old crop corn is a very attractive sale.
So when do you suggest corn producers make some new crop sales, especially keeping the higher fertilizer prices?
Todd: If you got a reasonable fertilizer cost locked in, lets say your cost of production is looking well under five dollars a bushel and you are not in a drought risk area. Five-fifty might be attractive to say forward sale twenty-five percent of next years production. But without those factors I mentioned I see no reason to be in a rush right now.
What about the wheat market? We’ve had very tight supplies globally of milling quality wheat, will that continue to keep that market pretty well supported?
Todd: I have to say I am a little skeptical here. Fundamentally the answer is yes, we should continue to have tight supplies. At least through February without much threat from the market. I think the wild card here, again, is end user buying. And we know that at some point when that end user buying gets satisfied and it shuts off that rallies over.
So marketing advice going forward?
Todd: We’ve recommended being seventy-five percent sold already in all three wheats, so we are just playing with the remaining twenty-five percent of 2021 production. And with that I’m willing to be a little more patient for at least the next two months to see if we don’t get another buying surge and challenge the highs. But if we get to the end of February and it hasn’t happened yet I am not going to be to patient with that last twenty-five percent.
Thanks for your outlook and analysis.
Todd: Thank you Michelle.
That is DTN market analysist Todd Hullman
A STUDY RELEASED BY THE CORN REFINERS ASSOCIATION SHOWS THE U.S. IS FALLING BEHIND ON TRADE AND EXPORT COMPETITIVENESS.
THE REPORT SAYS THE U.S. NEEDS TO REGAIN LOST GROUND TO INTERNATIONAL COMPETITORS. THE GROUP’S CEO SAYS OVER THE LAST DECADE, CHINA AND EUROPE HAVE MADE MAJOR GAINS VERSUS THE U.S. ON MULTI-LATERAL TRADE PACTS.
John Bode: The U.S. had only 30-percent of the value of what the EU entered into and only 40-percent of the value of the new agreements China entered.
HE SAYS USMCA IS A GREAT DEAL BUT WAS A RENEGOTIATION THAT DIDN’T MAKE SIGNIFICANT GAINS FOR U.S. AGRICULTURE.
THERE’S A NEW TOOL FOR FARMERS TO MEASURE AND REDUCE CARBON EMISSIONS.
FARGO AG TECH COMPANY, BUSHEL, IS TEAMING WITH BAYER AND AMAZON WEB SERVICES FOR “PROJECT CARBONVIEW”. THE GOAL IS TO CUT CARBON EMISSIONS WITHIN THE WHOLE SUPPLY CHAIN.
A FACILITY CAN SEND THE SCALE TICKET INFORMATION DIRECTLY TO BAYER, SO THEY CAN CALCULATE THE CARBON IMPACT SCORE THAT GRAIN MIGHT HAVE CREATED. THE PROGRAM COMPENSATES FARMERS WHO IMPLEMENT SUSTAINABILITY PRACTICES.
BUSHEL CEO JAKE JORANSTAAD SAYS IT’S SIMPLE TO USE, AND CAN HELP BOTH FARMERS AND ETHANOL PLANTS.
Jake Joraanstad: THESE ARE REAL, DIRECT TRACEABLE WAYS TO SHOW THAT YOUR CORN WAS GROWN MORE EFFICIENT THAN THE AVERAGE, AND THEREFORE THE FACILITY YOU SELL TO, AND THAT FACILITY AND YOU, CAN MAKE MORE MONEY IN THE PROCESS.
CURRENTLY BUSHEL HAS 200 GRAIN COMPANIES AROUND THE COUNTRY ON THE PLATFORM, REPRESENTING ABOUT 60-THOUSAND FARMERS.
COMING UP ON AGWEEK TV, LANDOWNERS AND HUNTERS NOW HAVE A NEW TECHNOLOGY FOR POSTING HUNTING LAND.
FARMERS CAN GET SOME FINANCIAL HELP TO SET UP WETLAND BANKS.
THE NATIONAL RESOURCES CONSERVATION SERVICE HAS AWARDED $875,000 TO NORTH DAKOTA AGRICULTURAL MITIGATION, TO HELP FARMERS LOWER THE COST OF ESTABLISHING WETLAND BANKS.
THE NORTH DAKOTA ORGANIZATION IS MADE UP OF SIX AG GROUPS IN THE STATE. THE FUNDING IS PART OF FIVE MILLION IN FUNDING FROM USDA.
THE WETLAND MITIGATION BANKING PROGRAM SUPPORTS CRITICAL WETLAND RESTORATION AND PROTECTION, WHILE ALSO EXPANDING OPTIONS FOR FARMERS AND RANCHERS TO RESTORE, CREATE AND ENHANCE WETLAND ECOSYSTEMS.
HUNTERS AND LANDOWNERS CAN NOW USE TECHNOLOGY TO POST LAND OR REQUEST PERMISSION TO HUNT.
A FARGO COMPANY HAS DEVELOPED A SYSTEM OF USING PHONES TO SCAN Q-R CODES, TO TRY TO SOLVE A LONGSTANDING ISSUE OVER LAND AND HUNTING RIGHTS.
LEVI OTIS SAYS HE AND BROTHER-IN-LAW, KYLE REIERSON, WERE INSPIRED BY USING A QR CODE ON A RESTAURANT MENU, TO USE THAT FOR POSTING LAND.
THE COMPANY PUTS A QR CODE ON A POSTED SIGN, UNIQUE TO EACH PARCEL. THE HUNTER CAN GET A FAST ANSWER, AND THE LANDOWNER DOESN’T HAVE TO RESPOND TO MULTIPLE PHONE CALLS.
Levi Otis: WE JUST WANTED TO SIMPLIFY OR STREAMLINE THE PROCESS OF COMMUNICATION BETWEEN THE LANDOWNERS AND THE HUNTERS THE LAND THAT THEY WISH TO ACCESS.
THE COMPANY WAS STARTED ABOUT A YEAR AGO. OTIS ESTIMATES ABOUT 50,000 ACRES ARE POSTED THIS WAY IN NORTH DAKOTA, AND THEIR SIGNS ARE UP IN 10 STATES.
A LONG RESEARCH PARTNERSHIP BETWEEN NDSU AND POTATO GIANT R.D. OFFUTT FARMS HAS YIELDED GOOD RESULTS FOR GROWERS.
THEY’VE WORKED TOGETHER FOR 25 YEARS, HELPING TO SOLVE POTATO DISEASES AROUND THE WORLD.
RDO FARMS PROVIDES SOME RESEARCH FUNDING, BUT ALSO HOSTS RESEARCH ON THEIR FARMS, THAT IS FUNDED BY OTHERS.
Nick David: One of the benefits of having research projects in production fields is that they’re able to utilize real world scenarios. The production practices are as a commercial grower would do them. They’re not trying to mimic that in a greenhouse or a small plot scale. They’re able to overlay their treatments into real world production practices.
Julie Pasche: It’s not quick. You know, solutions to these problems take years to develop. You know, we’re starting in the lab level. We might go to the greenhouse with it. We go to the field with it. This is a long process to really show that, yes, you’re going to get an economical benefit from, you know, whatever this management practice is.
PASCHE ESTIMATES THE RDO PARTNERSHIP ACCOUNTS FOR ABOUT TWENTY PERCENT OF HER TEAM’S RESEARCH.
A MARKETING ENTERPRISE THAT SELLS SUGAR FOR THE REGION’S SUGAR COOPERATIVES IS ENJOYING A SWEET YEAR, THANKS TO THE SUCCESS OF SOME KEY INVESTMENTS.
UNITED SUGARS SELLS SUGAR FOR SEVERAL CO-OPS AROUND THE COUNTRY, INCLUDING AMERICAN CRYSTAL AND MINN-DAK. IT NOW CONTROLS 43% OF THE VOLUME PURCHASED BY THE TOP TEN SUGAR USERS.
ITS RECENT GROWTH IS FUELED IN LARGE PART BY A MAJOR CONSTRUCTION PROJECT.
IN 2017 AMERICAN CRYSTAL BUILT A LARGE DOME FOR SUGAR STORAGE NEAR CHICAGO.
IT ALLOWED THEM TO DOUBLE THE AMOUNT OF BULK SUGAR DELIVERED IN THE CHICAGO AREA, WHICH IS THE WORLD’S LARGEST SUGAR MARKET.
Dirk Swart: WE’VE GOT THREE TIMES AS MANY BAG CUSTOMERS AS WE DID BEFORE, AND OUR BULK TRUCK CUSTOMER COUNT IS UP BY FIFTY PERCENT.
CRYSTAL IS NOW INSTALLING A SECOND DOME, WHICH WILL BE OPERATIONAL DURING THE PROCESSING AND SELLING CAMPAIGN OF THE 2021 CROP.
AHEAD ON AGWEEK TV, MICHELLE WILL LEAD ANOTHER MARKET DISCUSSION, THIS ONE FOCUSING ON LIVESTOCK.
IT FINALLY FELT LIKE WINTER THIS LAST WEEK, WILL THAT TREND CONTINUE INTO THE NEW YEAR?
HERE’S JOHN WITH OUR AGRI-WEATHER OUTLOOK.
LIVESTOCK PRICES FAIRED MUCH BETTER IN 2021 THAN THE COVID DEPRESSED MARKETS OF 2020. MICHELLE ROOK GOT SOME INSIGHT ABOUT WHAT’S AHEAD FOR THE NEW YEAR.
Michelle: JOINING US WITH OUR LIVESTOCK MARKET OUTLOOK IS SCOTT VARILEK. AND SCOTT, LET’S TALK ABOUT CATTLE FIRST, CASH STRONG THROUGH THE END OF THE YEAR, TIL ABOUT THE LAST TWO WEEKS, AND CASH KIND OF LED THE FUTURES. DO YOU ANTICIPATE CASH WILL TAKE OFF AND DO THAT WHEN START A NEW YEAR?
Scott Varilek: WE NEED SOME MORE CASH NEWS TO FEED THIS FIRE BASICALLY, BECAUSE WE’VE CLIMBED UP TO, YOU KNOW, SOME 140 LEVELS, VERY NICE PRICES, APPEALING TO A PRODUCER. PRICES THAT WE HAVEN’T SEEN IN SEVERAL YEARS, SO WE NEED SOME MORE, SOME MORE OF THAT CASH NEWS TO KIND OF KEEP IT GOING. WE’VE GOT TO KEEP FEEDING THE BULL. OTHERWISE IT’S GOING TO KIND OF START TO RUN OUT OF GAS, GET A LITTLE BIT WEARY, AS PRODUCERS SEE CASH REMAINING STEADY, AND SEE SOME OF THESE HIGHER PREMIUMS IN THE FUTURES MONTHS, THEY’RE GOING TO START TO BE INTERESTED IN LOOKING AT SELLING SOME OF THOSE CONTRACTS AND YOU COULD SEE A LITTLE BIT OF HEDGE PRESSURE THERE. THE LONGER WE STAY SIDEWAYS AND DON’T GET FED, THE MORE RISK IT IS, I THINK, FOR THIS MARKET TO TAKE A LITTLE BIT OF A CORRECTION HERE.
WHAT ABOUT SUPPLY? WHEN WILL THE NUMBERS TIGHTEN HERE DUE TO THE DROUGHT? WHEN WILL WE SEE THAT MARKETING HOLE?
Scott: I THINK AFTER WE GET THROUGH THE NEXT FEW MONTHS, GET THROUGH THIS FIRST QUARTER, I DO THINK THOSE TIGHTER NUMBERS ARE GOING TO START TO SHOW UP. WE DON’T HAVE AS MANY CATTLE READY IN THE SUMMER AND INTO THAT FALL TIME FRAME AS WE USED TO.
SO WHAT ARE YOUR PRICE PROJECTIONS FOR CATTLE IN THE FIRST QUARTER?
Scott Varilek: THE FIRST QUARTER WE’VE BEEN FAIRLY STEADY IN THE UPPER 130’S. USUALLY JANUARY TO ME IS ALWAYS A LITTLE BIT SLUGGISH, WE SEE THE FUTURES PRICES AND WE WANT THOSE HIGHER PRICES BUT IT ALWAYS SEEMS TO TAKE JUST A LITTLE LONGER TO GET THERE THAN WHAT IT PROBABLY COULD, SO I LOOK FOR IT TO STAY A LITTLE BIT SLUGGISH, SIDEWAYS KIND OF TRADE HERE OVER THE NEXT JANUARY AND INTO FEBRUARY.
SO SCOTT LET’S TALK ABOUT THE HOG MARKET, FIRST OF ALL IN THE SUPPLY SIDE, THE HOGS AND PIGS REPORT AT THE END OF THE MONTH PRETTY MUCH VERIFIED THESE TIGHT SUPPLIES.
Scott Varilek: YES, HOGS AND PIGS REPORT SHOWED WHAT WE’RE HEARING FROM THE COUNTRY, THAT NUMBERS ARE A LITTLE BIT TIGHTER, WE’RE RUNNING INTO DISEASE CONTROLS, AND THE PRICE ON THESE FEEDER PIGS IS STARTING TO INCREASE, AND SWIFTLY, SO HEARING THAT A LOT MORE FROM THE COUNTRY THAT IT’S TOUGHER TO FIND THE SUPPLY.
AND WHAT ARE YOU THINKING ABOUT DEMAND FOR PORK, ESPECIALLY EXPORTS?
Scott Varilek: WE’RE PRETTY RELIANT ON HOW THAT GOES WITH CHINA. I DO THINK OUR DOMESTIC DEMAND IS GOING TO STAY PRETTY ROCK SOLID.
SO WHAT ARE YOUR PRICE PROJECTIONS FOR HOGS IN THE FIRST QUARTER?
Scott Varilek: I THINK THERE’S SOME UPSIDE POTENTIAL, I JUST DON’T THINK IT’S MASSIVE BY ANY MEANS. I THINK THERE’S STILL THAT LOOMING FACTOR THAT AFRICAN SWINE FEVER IS STILL SOMETHING THAT’S OUT THERE. SO TRYING TO GET SOME SORT OF FLOOR AS CHEAP AS I CAN, AND LEAVING MY UPSIDE OPEN.
Michelle: THANKS SO MUCH SCOTT. THAT’S SCOTT VARILEK with Kooima Kooima Varilek.
STILL AHEAD ON AGWEEK TV, WE’LL SHOW YOU THE WINNERS OF OUR “BEAUTY OF AG” CONTEST.
HOW ABOUT KICKING OFF THE NEW YEAR WITH A SEAFOOD FEAST?
CRISTEN CLARK SAYS IT’S THE PERFECT WAY TO WRAP UP THE HOLIDAY PARTY SEASON. CLARK WRITES THE MONTHLY “FOOD AND SWINE” COLUMN IN AGWEEK MAGAZINE, AND SHARES VIDEOS ON AGWEEK.COM.
THIS WEEK, SHE SHARES SOME TIPS FOR CREATING THE PERFECT SEAFOOD PARTY. CHECK IT OUT AT AGWEEK.COM.
STORIES YOU’LL ONLY SEE ON AGWEEK.COM AND AGWEEK MAGAZINE THIS WEEK.
HOW WILL INFLATION, COUPLED WITH EFFECTS OF ‘THE GREAT RESIGNATION’, AFFECT AGRICULTURE IN 2022?
AND BUFFALO CREEK MILLS IN MANITOBA IS EXPANDING ITS ABILITY TO PROCESS OATS INTO A VARIETY OF PRODUCTS.
DURING NOVEMBER AND DECEMBER, AGWEEK ASKED READERS AND VIEWERS TO SUBMIT THEIR FAVORITE PHOTOS FOR OUR “BEAUTY OF AGRICULTURE” PHOTO CONTEST. VOTING TOOK PLACE ON AGWEEK.COM.
OUR 3RD PLACE WINNER WAS THIS GORGEOUS SHOT FROM AMANDA LAYMAN WHO FARMS IN SOUTHERN OHIO! WHAT A SPECTACULAR SKY!
2ND PLACE WENT TO LAURIE KAPPES FROM BORUP, MINNESOTA, FOR THIS BEAUTIFUL SILHOUETTE SUNSET HARVEST SHOT.
AND THE WINNER OF THE 2021 AGWEEK ‘BEAUTY OF AGRICULTURE’ CONTEST WAS JOHN BARTSCH WHO FARMS NEAR BUXTON, NORTH DAKOTA. HE CALLED THIS ‘CROP SCOUT!’ IT’S HIS DOG, DAKOTA.
THANKS TO EVERYONE WHO ENTERED. AND THANKS FOR WATCHING THIS WEEK’S EDITION OF AG WEEK TV.
AS WE LEAVE YOU,
HERE ARE MORE ENTRIES FOR THIS YEAR’S AGWEEK “BEAUTY OF AGRICULTURE” PHOTO CONTEST. HAPPY NEW YEAR, EVERYONE!