“Now suppose Ty Cobb was on second base and you knew he was going to steal third. What would you do?”
“Oh, that’s easy! I would call for a pitch-out, fake a throw to
third, hold onto the ball and try to tag him as he slid home!”
Discussion between Connie Mack (the team
manager) and his catcher Wally Schang
Ty Cobb was arguably one of the greatest baseball players of all-time, and was known in his early days for being hyper-aggressive in his style of play. Often, Cobb would utilize his quickness and speed to score (or try to score) from second base on a ball hit to an in-fielder. Ty Cobb was a feared base-stealer in his playing days and ended up with 897 career stolen bases. Mr. Cobb had a 24-season career and only three players stole more total bases than Ty Cobb (Ricky Henderson, Lou Brock, and Billy Hamilton). Ty is second on the all-time hits leader board with 4,189 (first is Pete Rose – 4,256), and Ty’s .366 career batting average is an all-time career record high.
https://www.baseball-reference.com/players/c/cobbty01.shtml
When you
know the tendencies of some players, maybe a wild approach like Wally Schang
envisioned, will sometimes be successful.
Many times, it’s not too difficult to get a good feel for the rhythm of
an opposing player or a consistent task, however, thinking outside-the-box will
usually lead to some good discussions and creativity that sometimes can be
lacking in a business. I’m not saying
all out-of-the-box strategies are good, but going through the process and
having the discussion with others in the industry or at least among key
business partners is a worthwhile exercise that can lead to some creative ideas
for further exploration and potential buy-in for everyone in your business
partner team.
Regional Weather
Well,
the weather continues to be variable, but the trend remains above average
temperatures and below average precipitation – just like it has for the
majority of the autumn and early winter.
This week is starting off on the cold side, but we should enjoy at least
one day of above freezing temps again before the weekend. Only the snowmobile and ski owners are a
little grumpy that the winter has been so mild for snow volume.
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 National Oceanic Atmospheric Association (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 the last full week of January,
the forecast is to have greater chances of above average temperatures, and equal
chances on the precipitation chances.
The NOAA
organization also provides three month outlooks. If we would like to get a general forecast
for the upcoming summer (Jun-Jul-Aug), it can be seen here: https://www.cpc.ncep.noaa.gov/...long_range/seasonal.php?lead=6
This forecast
currently predicts equal chances on both the temperature and precipitation
potential for our region. Equal chances
notes that the potential is equal for either above average conditions or below
average conditions to develop. If this
holds true, I think most would relish a trend to more of a normal growing
season. Coming off our dry finish to the
2020 season and a dry autumn season, hopefully we trend towards the above
average conditions on the precipitation prospects.
Interesting to
note, most of the Midwest (and east) is forecasted for a growing season of both
above average temperatures and precipitation.
It could set the stage for some interesting yield dynamics and
subsequent market influence.
USDA’s WASDE Report Highlights
I could go through all
the bullish news from last week’s WASDE report released by the USDA, but I
think I’ll just provide the link and some interesting summary points. The report was very bullish for soybeans and bullish
for corn. The markets responded
like-wise last week. However, the
markets are down to start this week after the federal holiday on Monday (Martin
Luther King). I’m sure all of you are
aware of the tightening supply dynamics we are currently under for corn and
especially soybeans.
My personal take? Well, let’s start with… how do we go from
such extremes on the marketing spectrum in just a handful of months? To me, there is more than just supply and
demand influencing these markets and the large influence the China government
has in supplying their economy and population.
I don’t know what to make of it entirely, but there is a lot of risk in
the situation currently.
The report for wheat was
probably more neutral, but if corn and soybeans are going to buy all the acres,
then I would think there will be some upside potential in wheat at a point
later in the marketing year. Winter
wheat plantings are up 5% (1.6 mil acres) over last year, and most likely less of
these acres will shift into corn or soybeans due to the developing and ongoing
drought conditions in the western half of the country.
January WASDE highlights
(primarily from Todd Hultman – DTN®):
·
Corn
and soybean basis is the narrowest in 7-8 years
·
1st
quarter of the marketing year was a record high for both corn and soybean
demand (4.805 bil bu corn; 1.762 bil bu soybeans)
·
China’s
domestic markets reflect an average of US$11.18/bu for corn and US$18.32 for
soybeans. The very robust Chinese
domestic corn price could be an indicator that supplies are tighter than the
USDA forecasts. Regardless, these prices
highly favor corn plantings for the Chinese farmer this spring
·
Trader’s
position (funds) on the corn are in record high volumes
·
Currently,
corn is dependent on soybeans and thus vulnerable to downside correction
·
US
soybean imports for the year are projected to move up from 15 mil bu to 35 mil
bu – indicating that domestic supplies will continue to be very tight
·
Brazil
and Argentina are unchanged for projected 2020/21 soybean production estimates
despite the regions below average rainfall
·
Speculation
as well as fundamentals are both driving the bullish market outlooks.
https://www.usda.gov/oce/commodity/wasde/wasde0121.pdf
NDSU Weather Forecast
– Daryl Ritchison
Mr. Ritchison was kind enough to provide his insights on the weather for our region at the last Prairie Grains Conference (December 2020). Due to the event being virtual, his presentation has been posted on YouTube® if you are interested:
https://www.youtube.com/watch?v=iWsojhTlA2E&feature=youtu.be
Here are the key points he stressed for the area encompassing the NDAWN
weather network area:
·
Long term – trending drier for the decade
·
Short term - colder than average
temperatures are most likely possible for March and April
·
Summer 2021 looks to be slightly warmer than
average, but not as warm as the 2020 season
·
The 2021 precipitation outlook looks to be
average to drier than average with some local variability
·
The current weak to moderate La Nina will be
shifting to neutral to slightly El Nino by the July-Aug-Sept timeframe
·
Most La Nina’s create a winter season of
below average snowfall as well as slightly colder than average temperatures for
the region
·
No prediction on the first autumn frost
timeline potential
·
Next season, the NDAWN long-term 30-year
average reports will shift - from
1981-2010 to 1991-2020. This will make
the long-term averages trend wetter and probably cooler as a third of the
long-term data (1980’s) is replaced by the weather we just finished
experiencing (Jan. 1st, 2011 to Dec. 31st, 2020).
Glufosinate and Glyphosate Prices Rising
in China
As of mid-December, the
average domestic Chinese market price for glufosinate (Liberty®) and glyphosate
is up between 32-37% over the prior six months.
This is supposedly due to supply concerns around both herbicide products.
Just to be on the
safe side, I’d inquire about booking your intended needs of these two products
for the year with your local ag supplier and take delivery on the product when
you are able. Supplies may be good in
the US currently, but prices will probably go up in-season. Good luck!
http://news.agropages.com/News/NewsDetail---37569.htm
Product Spotlight: Corteva’s Granular
Insights
Many of you with
your Pioneer invoice have qualified for some acres of the farm to be enrolled for
free into our Granular Insights app. If
you conduct your own crop consulting, or have a professional crop advisor
assisting your farm, it would be valuable to enroll in the app that will basically
provide another set of eyes on your fields.
·
Scout Priority – Highlighting fields that have
changed the greatest in a crop health index score over a set time period
(usually 7 days) to direct field scouting efforts across the farm – saves time
and effort
·
Setting Permissions – Share farm and field
imagery with crop advisors and/or other partners in the farm operation
·
Three-meter resolution (best in-class) and new
images provided almost daily if no cloud cover present. Images greatly influenced by cloud cover are
not made available
·
Agronomics and financials in one place! Understand the ROI of your seeding rate
decisions and relative maturity for yield performance.
Random
Agricultural Facts – PIK in the 1980’s
For
those of us too young to remember the business culture in the 1980’s here is a
reminder of the situation many of our farm families had to endure. It is likely that the only time you have
heard of the term “PIK” (Payment in Kind) or “PIK Program” was from older
family members or neighbors who voiced their opinion on the topic. Basically, the federal government program paid
farmers to not produce a crop on a subset of the farm’s acres due to the large
inventory of ag commodities (very similar to our recent times).
The
first chart below shows the acreage that sat idled due to various farm programs
since ‘78. Since the mid ‘90’s, we have
only seen the Conservation Reserve Program (CRP) in play, but in the 80’s we
had other programs like PIK and “set-aside acres” that dominated the Farm Bill
for acreage reduction programs. As you
can see from the second chart, the history of such programs in our country for
removing farm production acres goes back to the New Deal era (1930’s).
One
of the years that stand out in the first chart is 1983. This was the first year of the PIK program,
and coincidently, 1983 was also the low point for corn acre production in US
history at 60.21 mil total acres for the season. The USDA history goes back to the 1920’s on
this website. https://quickstats.nass.usda.gov/results/...
These
programs were massive in size, as the PIK acres in 1983 totaled about 80 mil
acres just by themselves (only recently has the US even planted that many acres
of soybeans). The PIK program only
lasted two years, but paid out a total of $10 bil ($23 bil in 2019 dollar value).
The acreage
reduction programs declined in overall acres for the ’84 and ’85 seasons, but
started trending upward in 1986 again as the CRP program started. A combination of set aside and CRP had idled
acreage back up towards 75-80 mil acres in ’87 and ’88. Today’s CRP commitments still accounts for 20
plus mil acres of idled production.
Another
thing to remember was the early 1980’s seen interest rates near 20%, making the
idled acreage and subsequent payments welcome by many producers to help keep
total input costs lower for the season.
Typically, these idled acres were on the low end of the production
spectrum and a cover crop of winter wheat, oats, or rye was sown to control
erosion, and maybe even provide some grazing in dry years.
It’s
hard to say how these markets influenced ag commodity supplies and subsequent
grain prices moving forward. No one
talks about the late 1980’s or 1990’s as strong commodity years. Beside the run-up in corn prices during the
spring of 1996, the 1990’s and early 2000’s were a continual struggle to obtain
profitable farm and livestock balance sheets.
Unfortunately, these programs did have an unintended flip side; rural communities were hit hard as less businesses were needed to support the farms, and less people were needed as labor on the farms. With today’s communication technologies available, maybe there will be a shift back to folks seeing some value in rural America. As usual, we’ll see!
https://aei.ag/2021/01/11/idling-acres-and-the-1980s..... https://farmdocdaily.illinois.edu/2020/06/...reviewing-history.html
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