November 16, 2020 Edition

 

“When Bird would come into your building… started lighting you up and talking trash... man, that’s hard on a guy.  It’s like driving a stake right in your heart!” - Glen Rice - Miami Heat small forward

 

I could not find exactly when Glen Rice gave this quote, but regardless, I’d bet this would be one of those games he was referencing.  For a game summary on this date in April of 1990, the veteran Larry Bird led the Celtics to a 115-105 road win while not giving any mercy to his opponents.  Bird tortured the defense for 37 points, 9 rebounds and 10 assists in 42 minutes of playing time.  Meanwhile, the rookie Glen Rice who gave his best effort for 39 minutes finished with 12 points, 3 rebounds and 4 assists. 

The Miami Heat at this time of franchise history was in its second full year of existence and my guess is Glen Rice did not have a seasoned veteran on the team to mentor him through some of the early big challenges like mentally preparing for an opponent like Larry Bird.

https://www.basketball-reference.com/boxscores/199004070MIA.html

Sometimes the challenges on the farm can be overwhelming, and you need the veterans on the team to help guide the way for some of the younger crew members.  When the teamwork is cohesive and everyone is contributing to the success of the farm business, everyone wins. 

Some of the best businesses today have employee handbooks to help guide new workers in their contribution to the overall health of the business.  A good employee handbook should also define what the employee can expect from their supervisor and employer if their dedication, willingness to learn and drive to be a significant influence in the business is clearly demonstrated over time.  Let’s touch more on employee handbooks later.

Regional Weather

A significant dusting of snow on the ground here in Grand Forks to start the week, but a couple days of mid 40F for daily high temps will probably take care of most of it.  Daily high temperatures should mostly stay about average, but no big storms have occurred or are currently on the horizon.

I’ll count on your weather app for the best guidance through the 7-8 day forecast, but looking beyond that, I’ve found this site from NOAA to be fairly reliable for a general 8-14 day outlook (next week).  https://www.cpc.ncep.noaa.gov/products/predictions/814day/index.php

For Thanksgiving week this November, the forecast is to have greater chances of above average temperatures as well as above average chances of having drier than average precipitation.  This should bode well for all the holiday travelers.

The NOAA organization also provides three month outlooks.  If we would like to get a general forecast for next summer’s growing season timeframe of Jun-Jul-August, it can be seen here:

https://www.cpc.ncep.noaa.gov/.../long_range/seasonal.php?lead=8

This forecast currently predicts equal chances on both temperatures and precipitation for our region.  Equal chances or EC basically means there is equal opportunity for either above or below average conditions to formulate.  As we get closer to the upcoming summer months on the calendar, the prediction could sway one direction.  As usual, we’ll see.

Regional Soil Temperatures

Soil temps plummeted last week and are variable around the freezing/frost point.  A few operations are still conducting some field work, but conditions are not suitable in general.

USDA Insights

Last week, the USDA published its WASDE (World Agriculture Supply and Demand Estimates) report for the month of November.  The report can be found at this link.

https://www.usda.gov/oce/commodity/wasde/wasde1120.pdf

As I’m sure you are all aware, the report generated quite the bullish response.  Currently, we are looking at over $11.50 soybean futures for January, and over $4.15 December futures for corn.  This drives a strong soybean to corn price ratio of 2.77, which gives a huge advantage towards soybeans for acres currently.

Here are some of the details around the report and other tidbits provided by DTN’s Todd Hultman (via web tele-conf):

·         Corn ending stocks: 1.702 bil bushels – which was significantly below trade expectations

·         Reduction to 175.8 bu/ac for 2020 corn yield forecast – which lowers the crop estimate by 200 mil bu

·         Corn export estimate up by 325 mil bushels over the last month

·         Corn world ending stocks down by about 9 MMT (353.6 mil bu) month over month

·         11.5% estimated stocks to use ratio provides a corn cash price a tad over $4.10/bu (close to Dec. futures price currently)

·         US corn export commitments up 179% year over year (forecasted for 2.65 bil bu)

·         Corn basis is 2^nd narrowest in prior 8 years

·         Net long position by speculators is the highest in 2-yrs.

·         Soybeans – 190 mil bu ending stocks – also below trade expectations

·         Exports are flat month over month (but thoughts are they should be up)

·         Yield forecast down slightly from 51.9 to 50.7 bu/ac, results in a loss of 100 mil bu of production

·         Ending stocks to use ratio at 4.2%, near the record for last 23 years for tightness of soybean stocks.  Should result in a price around $12.50/bu cash – suggesting more bullish movement

·         Soybean export estimate at 2.2 bil bu for the year; up 31%

·         Soybean basis – narrowest in 7 years; 5 year average of 74 cents, but closer to 51 cents currently nationwide (also a bullish signal)

·         Brazil soybean prices are $1.31 above gulf US prices due to low supplies - China has bought them all

·         Trader’s (funds) are heavy long in the futures market (largest volume on record) – creates more volatility

·         Wheat ending stocks had a neutral report on the US balance sheet

·         Same production estimate for yield forecasted

·         Spring ending stocks at 317 mil bu

·         World ending wheat stocks at or near record highs

·         41.7% ending stocks to use ratio for HRW results in a price near $4.25 cash

If you’d like to read more from Todd Hultman from DTN, he gives his perspectives here on some post-WASDE report thoughts.  Obviously, we are in territory to “reward the market” when we see fit.

https://agfax.com/2020/11/15/how-accurate-are-wasde-reports-it-depends-on-when-you-ask/

NDSU Trial Results – 2020

Most farms usually place some value in the independent research done by our local ND state university.  The results have been published for the season as most of their trial data can be found at the following website: https://www.ag.ndsu.edu/varietytrialS

Some highlights from Pioneer genetics:

·         -Top oil sunflower hybrid with P64HE101 by a wide margin

·        - Strong soybean IDC with P01A84X and P03A17X 

                 https://www.ag.ndsu.edu/2020soyb-iron-deficiency-chlorosis...

·         - Strong performance from Pioneer canola with RR, LL, and CL hybrids

2021 Corteva TruChoice

The 2021 programs are out and available now from the Corteva Crop Protection (CP) team.  Please take a gander at the highlights.  The key for any farm that is planning to utilize Corteva CP products and/or purchasing Pioneer seed genetics, is to deposit money into their farm’s TruChoice account by January 15^th, 2021.  A minimum deposit of $7,500 will start the ball rolling on discounts for the season.  I’m not going to labor you with the details from there, but it’s a solid offering that provides the discounts up-front and immediately – no waiting to see if you qualify or wondering how big or small the rebate may be.

As questions or comments come into your mind, please feel free to reach-out to myself or anyone on the Pioneer or Corteva team.

Best Management Practices – Employee Handbooks

As discussed earlier, an employee handbook should be highly considered for any business hiring one or more employees.  Below are some of the best tips for writing and implementing an employee handbook for your business:

• Job description.  Maybe even include a couple additional jobs in the business that they can support as a potential employee when needed or as opportunities open in the future
• A history of the farm business or company should be included; consider even placing some rough outlines of the future vision of the company as well
• Guidelines on social media and smartphone usage.  Does the business allow social media posts about their activities?
• Standard handbook items:
• Compensation and promotions – rough quidelines
• Additional benefits or benefit potential (i.e. company vehicle, retirement, etc.)
• Driver’s License policy, and vehicle insurance policy on the job
• Paid time off policy
• Employee behavior guidelines
• General benefits with health care (don’t be too specific as these tend to change frequently)
• If a policy is written in the handbook, attention has been given to the topic and it needs enforcing.  If you think it’s best not to enforce a policy, then the policy needs removed from the handbook
• Include an employee acknowledgement page that can be signed a day or two after distribution to ensure that the employee has read the document.  This page should be easily removeable for the farm manager to document and file
• Lastly, have your close business partners and lawyers review the handbook document.  Their insight should help offset any potential liability and litigation.

 

https://www.inc.com/guides/2010/06/what-to-include-in-employee-handbook.html

National Winter Trade Shows

Many folks in the ag-business sector, including top producing farms, look for a quest in the winter by travelling and seeking knowledge from attending at least one major agricultural show.  Depending on your thirst, one of the following events usually fits the bill - DTN’s Ag Summit, National Farm Machinery Show, Top Producer, or Commodity Classic.

The DTN Ag Summit typically, kick-starts the winter season of ag-show activities.  It is held in Chicago in early December and traditionally has focused on the technology aspect of the business.  Due to many reasons, this year’s Ag Summit event will be held virtually on Dec 7-9.  The DTN team highlights an all-star cast of speakers and a solid pace of presentations to keep the event running smooth.  If you’d like more insight, the below link gets you to the conference’s home page. http://www.cvent.com/events/dtn-2020-ag-summit/event-summary...

In mid-February, the National Farm Machinery Show in Louisville (Feb 10-13) is another top ag-show destination.  At this time, they plan on conducting their event in person on Feb 10-13^th. https://10times.com/nationalfarm-machinery-show

The Top Producer event revolves primarily around the business side of ag-production – banking, finance, succession planning, etc.  This year’s Top Producer event will have both an in-person three-day session and a virtual 3-day session.  The in-person event will be in Nashville, from February 15-17, and the virtual conference from February 23-25^th. https://events.farmjournal.com/top-producer-summit-2021/

The Commodity Classic event with the National Corn Growers Association and other groups will be hosting their event virtually this year.  This show is probably the biggest of three and typically signals the conclusion of the winter information season with a date in early March.  This event is a tremendously great place to get new ideas to implement on the farm from all different aspects of the business.  The Commodity Classic is always a favorite due to their rotation among the big cities in the southern US for host sites.  Next year’s Commodity Classic is forecasted to revert-back to a live event in…. New Orleans on March 10-12, 2022. https://commodityclassic.com/

Product Spotlight: Crop Storage – Bins vs. Bags?

There is high probability that we will get a full crop planted next spring and thus, it usually places some added stress on storing the crop efficiently and effectively come harvest for most operations.  In preparation for our business winter planning, Farm Journal published some information from the Univ. of Tennessee to help farm managers decide on the value of erecting steel bins against maybe the more versatile approach of grain-bags.

                The following chart below analyzes the cost of storing 50,000 bu of grain.  Univ. of Tennessee data.

https://www.agweb.com/article/bins-versus-bags

This topic can be somewhat of a hot button – some people love the ag-bags, and some people absolutely despise them.  Some folks say the grain stores well over the summer, some farms have experience and recommend the ag-bags be emptied before spring work begins.  You’ll need less labor to fill ag-bags at harvest time if the bags are being filled in each field (less to no truck labor at harvest).  However, you’ll need more labor in the winter filling trucks from ag-bags versus a central grain bin facility.  Rodents and deer can be issues to enhance ag-bag grain spoilage, and snow may need to be handled for efficient unloading at the various field sites.

If you are considering investment in this space, the earlier lead time given to a manufacturer the better.  It just seems to take longer than expected to find grain-bag equipment, and/or supplies and labor to build bins given the derecho storm this summer in Iowa/Illinois and other factors.  Good luck.

Here are some additional resources for further reading: 

https://www.agweb.com/article/what-consider-investing-grain-bags 

https://www.agweb.com/article/do-you-know-your-storage-options 

https://www.agweb.com/article/6-tips-for-winter-grain-bag-storage

FMC’s 3^rd Quarter Earnings

Whether it’s right, wrong or indifferent, I often look to US based companies to get a feel of how healthy the ag-sector is performing.  John Deere, and Corteva are the obvious top choices, but FMC Corp is a lesser known crop protection pesticide business and US based.  FMC is a world-wide business generating about $4.7 bil of revenue per year.

FMC’s third quarter revenue was $1.08 bil and an increase of 7% over 3^rd quarter of 2019, and if you excluded foreign currencies, the growth would be about 15% year over year organic growth.  The CEO of the company stated the positives as growth in demand, geographic balance, and continued cost reductions due to the global pandemic.  Their North American segment of sales increased 8% year over year for 2020.  These positives have obviously raised FMC’s 2020 financial outlook.

It’s a good sign for the future of agriculture that many segments are making positive strides.  With the shortage of supply stocks in the corn and soybean markets and positive 3^rd quarter results from some key US based ag-companies, agriculture should be on a path to a brighter future.

http://news.agropages.com/News/NewsDetail---37079.htm

Random Agricultural Facts – Thanksgiving History

With the Thanksgiving festivities looming, let’s converse a bit about the history of the holiday with the closest ties to agriculture.

·         The first Thanksgiving was celebrated by the Pilgrims and the Wampanoag tribe of Native Americans in October of 1621 and lasted for 3 days

·         Christopher Columbus landed in the Americas in 1492, making it 129 years between European’s first arrivals and the celebration of the first Thanksgiving between the natives and the European pioneers

·         The struggles of the community regarding ag production were well noted with the early settlers to America.  Primarily, the colonial leaders fought to find consistent labor under a system where the harvest was shared equally across the people

·         After the land was eventually divided amongst the colonists and individual responsibility for food production was passed onto the family, it was only then that innovations began to be implemented and production increased

·         The first national Thanksgiving Day in USA history was proclaimed by President George Washington in 1789

·         Abraham Lincoln chose the last Thursday in November for the Thanksgiving holiday starting in 1863

·         Franklin D. Roosevelt and the US Congress finally declared Thanksgiving a National holiday by proclaiming the fourth Thursday of November as Thanksgiving starting in 1942

·         90% of American homes will consume turkey on Thanksgiving while the average complete Thanksgiving dinner has over 4,500 calories!

·         Benjamin Franklin wanted the turkey to be the national bird, one of his biggest arguments being that it is native to America

·         Thanksgiving is also celebrated in Canada- on the second Monday in October

·         According to the American Automobile Association, millions of Americans travel an estimated 50 miles or more from home during the Thanksgiving weekend to spend time with friends and family, making it easily the most traveled week of the year for US citizens.

https://www.reluctantgourmet.com/thanksgiving-facts-trivia/

https://www.history.com/news/thanksgiving-history-trivia-facts

https://www.britannica.com/topic/Thanksgiving-Day