Latest / AG Bull / $2 Soybean Basis | Live from Big Iron Farm Show

Transcript

$2 Soybean Basis | Live from Big Iron Farm Show · AG Bull

• 0:21
  Speaker 2: Good afternoon everyone.
• 0:22
  Speaker 2: Tom Grisafi and Don Wick we're actually sitting next to each other Now.
• 0:26
  Speaker 2: You all know Don Wick from the Red River Farm Network.
• 0:28
  Speaker 2: We are here today at Big Iron Farm Show.
• 0:31
  Speaker 2: First day I was on a panel, but Red River Farm Network has this big, beautiful display.
• 0:36
  Speaker 2: If you're anywhere within a few hundred miles of Fargo, you absolutely have to come here.
• 0:39
  Speaker 2: I'm going to hand this mic to someone who actually knows how to use it and we'll take over from here.
• 0:44
  Speaker 1: Appreciate it.
• 0:44
  Speaker 1: Tom, we had a great session.
• 0:45
  Speaker 1: We had a Market Outlook panel with yourself, ray Goransky from Progressive Ag and Gene Grainer from Heartline Investor Services, and just a dialogue, a conversation about what is happening in this marketplace.
• 0:58
  Speaker 1: Obviously, the basis is pretty ugly in this footprint.
• 1:00
  Speaker 1: The prices aren't exactly where we'd like to see them, but there's a lot of factors that are out there, whether it's what's happening in outside markets with gold, what's happening in feeder cattle, there's just a lot of excitement in these trades.
• 1:11
  Speaker 2: It was an incredible day.
• 1:12
  Speaker 2: Feeder cattle trade limit down, gold hit all-time highs.
• 1:15
  Speaker 2: We have constant education here.
• 1:18
  Speaker 2: We had different people.
• 1:18
  Speaker 2: We'll take a step back.
• 1:19
  Speaker 2: Before we went up, we had people you know some of us are struggling.
• 1:23
  Speaker 2: Then you have financial planners telling you how to avoid taxes.
• 1:26
  Speaker 2: What's going on here?
• 1:27
  Speaker 2: Go back to the first session.
• 1:29
  Speaker 1: The first session we had this morning was talking weather.
• 1:30
  Speaker 1: We had the state climatologist from North Dakota, Daryl Richardson, and the state climatologist from South Dakota, Laura Edwards, talking about what we've been dealing with, their expectations as we move into the harvest season and the winter season as well, and then even into next spring.
• 1:45
  Speaker 1: I should note that all of our forums you can find online on the Red River Farm Network YouTube channel so you can go back and look.
• 1:51
  Speaker 2: I saw what you did there to do very good.
• 1:53
  Speaker 2: I will put that up rrfn on YouTube and just google Red River Farm Network.
• 2:00
  Speaker 2: Matter of fact, I probably helped a man who was 80 years old.
• 2:02
  Speaker 2: He said I want to watch these videos.
• 2:03
  Speaker 2: I go, sir, just go in your browser, hit Red River Farm Network, youtube, it'll come up.
• 2:09
  Speaker 2: And then that cool how technology's changed that the older crowd wants you know.
• 2:14
  Speaker 2: In the old days you had to be here, you couldn't miss the show, but now you can.
• 2:18
  Speaker 2: You could.
• 2:18
  Speaker 2: Maybe they said something you didn't catch and you can go back and watch.
• 2:21
  Speaker 2: I won't be here tomorrow for your marketing session because I'll be doing my own job as a broker, but I'm going to go back and watch because I always respect and admire other brokers and it's.
• 2:31
  Speaker 2: It may not always agree with them, but that's what makes a market a market right.
• 2:35
  Speaker 2: Someone thinks it's going up, someone thinks it's going down, and it's interesting.
• 2:38
  Speaker 2: You could tell it's live.
• 2:39
  Speaker 2: We have flies, we have bees.
• 2:40
  Speaker 2: We can't make this stuff up.
• 2:42
  Speaker 2: Then we move from the weather to-.
• 2:46
  Speaker 1: Folks from ag country, when you're talking about tax planning and retirement planning, those kind of-.
• 2:50
  Speaker 2: Carson, my friend.
• 2:50
  Speaker 2: Yeah, he's so knowledgeable, he's a farmer, he's retired, he's been an accountant, ag CPA with various groups, but I think he finished career or still with ag country, and so knowledgeable.
• 3:02
  Speaker 2: And then we also had Pioneer introduced your group.
• 3:04
  Speaker 2: They're getting ready to celebrate their 100-year anniversary.
• 3:07
  Speaker 2: They're excited about that.
• 3:09
  Speaker 1: Too many companies can say that.
• 3:10
  Speaker 1: I think it was like a half of 1%.
• 3:12
  Speaker 2: They weren't telling us.
• 3:13
  Speaker 2: Hey, just to let everyone know that there's flies all over us.
• 3:17
  Speaker 2: They're like what's going on?
• 3:18
  Speaker 2: What's Grisafi and Wick talking about?
• 3:20
  Speaker 2: Break down a little bit what you learned in our session.
• 3:22
  Speaker 2: I tried to get a word in edgewise.
• 3:24
  Speaker 2: We had some strong people up there.
• 3:26
  Speaker 2: It's not often I'm quiet like that.
• 3:28
  Speaker 1: That is very true.
• 3:29
  Speaker 1: I just I love to have that.
• 3:31
  Speaker 1: Maybe it's an idea starter, a thought starter.
• 3:34
  Speaker 1: If somebody's sitting in the audience and they haven't had a chance to think about okay gold, how does that impact me?
• 3:39
  Speaker 1: In the grain market or you talked about, really, it all comes home to what ultimately the basis is and what's happening in that cash market.
• 3:46
  Speaker 1: We need to get people to really think bigger than what's in their own quarter section.
• 3:56
  Speaker 2: Yeah, and the guys on the panel, they were like, well, if you could hold your they didn't say if you could they assumed everyone here could just hold their corn beans, wheat, and the price would be higher in a few years.
• 4:02
  Speaker 2: That's fine.
• 4:02
  Speaker 2: Where the heck do you get all the money to do this?
• 4:05
  Speaker 2: Not to mention, we talked about money and they're probably not wrong.
• 4:09
  Speaker 2: You know they threw out the number $12 beans, $14 beans.
• 4:15
  Speaker 2: Well, I'll tell you folks, $12 beans with a minus $2 basis, that ain't hitting the home runs for no one.
• 4:18
  Speaker 2: That's still poverty levels for farming.
• 4:19
  Speaker 2: What I brought up at the end was you guys keep talking.
• 4:22
  Speaker 2: They wanted to argue about yield and this, and that no one talked about how expensive it is to plant this crop, how expensive it is to produce a pound of beef.
• 4:31
  Speaker 2: Talk about that a little bit.
• 4:32
  Speaker 1: Yeah, and there is no doubt that these input costs have not come down.
• 4:36
  Speaker 1: We've had that boom time in agriculture and there is no doubt that the input costs went right along with it when the prices softened.
• 4:43
  Speaker 1: We have not seen those prices adjust downward either.
• 4:46
  Speaker 1: Those land values have stayed up there.
• 4:48
  Speaker 1: Rents haven't come down.
• 4:49
  Speaker 1: Maybe they've been holding, but I don't see them coming down.
• 4:54
  Speaker 2: No, and there's still plenty of people with money who gladly go.
• 4:55
  Speaker 2: They've always wanted to farm that ground and now they waited 10, 20 years to get that piece of ground and they're going to pay too much for it.
• 5:01
  Speaker 2: But they're going to pay too much for it in hopes that times get better and that then they get to farm that ground.
• 5:08
  Speaker 2: And so weak hands.
• 5:09
  Speaker 2: You know, just like in a market, like you know, people sold a lot of stocks and stuff earlier in march because the tariffs well now the stock market's at all-time highs.
• 5:17
  Speaker 2: You want to buy things when they're cheap.
• 5:19
  Speaker 2: You want to sell them when they're high.
• 5:20
  Speaker 2: Right now grains are affordable cheap, but we think they're cheap.
• 5:24
  Speaker 2: We definitely know they're affordable.
• 5:25
  Speaker 2: But how do we stay in control this grain to better times?
• 5:28
  Speaker 2: And well, this guy you know I got some graphics here one of the things that came up with, fed Rollins.
• 5:33
  Speaker 2: We talked a little bit about Rollins.
• 5:35
  Speaker 2: You mentioned that comment she gave although this isn't the prettiest picture of her she's, I got better pictures of her than this but she mentioned on Fox News.
• 5:43
  Speaker 2: What was that comment she said on Fox News?
• 5:45
  Speaker 2: I wasn't real proud of that one.
• 5:47
  Speaker 1: She said that the golden age in agriculture, the golden age for farming, is just around the corner.
• 5:57
  Speaker 2: That in agriculture, the golden age for farming is just around the corner.
• 5:58
  Speaker 2: That was last week on Fox News.
• 5:58
  Speaker 2: It surprised me, particularly when you look at the market.
• 5:59
  Speaker 2: The golden age didn't hit this week, maybe it's next week, maybe it's two years from now.
• 6:01
  Speaker 2: I do believe in the Trump administration.
• 6:02
  Speaker 2: If it was not Trump running as the president, I would believe in any administration always thinking they have the best of all Americans at heart, and especially agriculture.
• 6:11
  Speaker 2: I also brought up that only one, maybe 2% of all people in America are involved in agriculture now.
• 6:18
  Speaker 1: One thing we did have a large group of young people that were actually college-age students that were in this audience and I'm old enough to remember the 80s and we lost a crop of young people coming into this business, and that's what I guess was one of my final thoughts how do we keep those people in the room?
• 6:32
  Speaker 1: Do you remember what my answer was To marry.
• 6:37
  Speaker 2: Well, I said listen, kids, go find a plat book and you'll fall in love.
• 6:41
  Speaker 2: Along here there was a good young crowd and we did have some laughs.
• 6:47
  Speaker 2: But we're laughing because it's a very serious conversation.
• 6:48
  Speaker 2: We're laughing because maybe we're crying inside.
• 6:51
  Speaker 2: I know tomorrow when I go to work at the bank that there's people who aren't going to be able to renew their operating, may have to sell some assets.
• 6:59
  Speaker 2: And the problem is, folks, is that the very assets a few farmers in a little area need to sell.
• 7:04
  Speaker 2: Everyone has those same assets to sell, right, and you can only get rid of so much equipment.
• 7:08
  Speaker 2: You don't want to get rid of ground that's been in the family, so you start to leverage things.
• 7:12
  Speaker 2: On the bright side, farmland values are staying firm.
• 7:17
  Speaker 2: Is that correct?
• 7:18
  Speaker 1: We just had a session actually with some folks from Farmers National Company talking about that land value and they're holding.
• 7:24
  Speaker 1: They certainly like soft landing, I think was kind of the term that was used.
• 7:30
  Speaker 2: Yeah, I don't see a panic in the land market.
• 7:32
  Speaker 2: Maybe it got too high.
• 7:34
  Speaker 2: We saw around the Mayville Portland area land trade at 7,000.
• 7:37
  Speaker 2: Maybe it should be worth 5,500.
• 7:38
  Speaker 2: But the land base of most of my clients is at a much lower level.
• 7:43
  Speaker 2: I know on their balance sheet it's at a lower level.
• 7:46
  Speaker 2: I was over at hanging out at the Ellingson booth and I saw a fellow client and a friend.
• 7:51
  Speaker 2: He's also an ag lender and a farmer and a bunch of farmers were standing around.
• 7:56
  Speaker 2: I said, listen, he's your, he may be your lender.
• 7:59
  Speaker 2: He has the same bad $2 basis he has.
• 8:02
  Speaker 2: He called me a week ago.
• 8:03
  Speaker 2: He can't store his corn and beans.
• 8:05
  Speaker 2: So when you have the ag lenders working with the futures and options broker saying I need to do that store or sell decision here at this harvest in Northern Plains, and then we talk about reownership, so he didn't have enough room for everything.
• 8:18
  Speaker 2: We had to sell something.
• 8:19
  Speaker 2: We're not happy about the price.
• 8:20
  Speaker 2: We're going to reown it on the board.
• 8:21
  Speaker 2: But the problem, don, we can't make up that basis, we can't make up for that poor cash market, and so maybe we should end this video, go out there and sell a bagger, right.
• 8:31
  Speaker 1: They're.
• 8:37
  Speaker 2: But we lost.
• 8:38
  Speaker 2: You and I agreed close to 100 million bushels of storage here in North Dakota.
• 8:42
  Speaker 2: Talk about that and how that's just playing into this poor cash market.
• 8:45
  Speaker 1: We had a derecho wind event that came late June.
• 8:48
  Speaker 1: That impacted one end of North Dakota, the other and into Minnesota and did some tremendous amount of damage.
• 8:54
  Speaker 1: It's in a narrow band but if you're in the middle of that band that doesn't matter how narrow it was.
• 8:59
  Speaker 1: There was a lot of extreme damage.
• 9:00
  Speaker 1: I'm frankly surprised how well the crop held up.
• 9:09
  Speaker 1: Considering where we were, the corn was young enough at late june that it didn't do a lot of damage but we lost a lot of storage.
• 9:13
  Speaker 2: Yeah, and it's.
• 9:13
  Speaker 2: It's a challenge, but we're gonna fight through it with that.
• 9:17
  Speaker 2: I will say this in my travels and my public speaking folks if you need someone to speak at a farm meeting, I love doing that.
• 9:22
  Speaker 2: You'll see also the Red River Farm Network people all over at events or all different places, but the farmers are still optimistic.
• 9:30
  Speaker 2: Explain how they stay.
• 9:32
  Speaker 2: So I think I know the answer.
• 9:33
  Speaker 2: As a trader, I think in minutes, in days.
• 9:35
  Speaker 2: They think in longer time frames, don't they Don?
• 9:38
  Speaker 1: Yeah, we're in a generation business, want to have that next generation to come in behind them and they know what, uh, what, the generations ahead of them did too.
• 9:45
  Speaker 1: So it's that, that's that's really important.
• 9:48
  Speaker 2: I didn't that continuity, I believe yeah, and before we end the show, I do have to say I'm totally embarrassed.
• 9:52
  Speaker 2: I went to the bears game last night.
• 9:54
  Speaker 2: Uh, congratulations you vikings fans.
• 9:56
  Speaker 2: Tough, tough loss for us chicago bears.
• 9:58
  Speaker 2: But a couple of the people I was with were Vikings fans, a couple were Bears and half the people were happy, half weren't.
• 10:04
  Speaker 2: With that, agriculture is going to keep moving on right.
• 10:08
  Speaker 1: Full steam ahead.
• 10:09
  Speaker 1: This is a great show.
• 10:10
  Speaker 1: We encourage folks to come and check it out.
• 10:12
  Speaker 1: There's lots to see.
• 10:13
  Speaker 1: You can just kick the tires.
• 10:15
  Speaker 1: You don't have to pay for it, buy anything.
• 10:16
  Speaker 1: So check it out.
• 10:17
  Speaker 1: How about?
• 10:17
  Speaker 2: Wednesday and Thursday schedule a little bit.
• 10:18
  Speaker 2: I'll get this video up here tonight, but who do you have coming here next few days?
• 10:22
  Speaker 1: John Newton's going to be with us tomorrow morning at 1030.
• 10:24
  Speaker 1: John is with Terrain.
• 10:26
  Speaker 1: That's part of the farm credit group, ag, country Farm Credit Services of America and such.
• 10:30
  Speaker 1: But his background he's been a chief economist for the Senate Ag Committee, american Farm Bureau, national Milk Producers.
• 10:36
  Speaker 1: He can talk markets, he can talk politics.
• 10:39
  Speaker 1: He's got such a broad background and really gives some perspective on land values and what's going on in the commodity markets and a lot of those kind of things.
• 10:47
  Speaker 1: John Newton again tomorrow morning, 1030.
• 10:49
  Speaker 1: We've got a market panel at 130.
• 10:51
  Speaker 1: Tomorrow we're going to have Randy Martinson from Martinson Ag Risk Management.
• 10:56
  Speaker 1: I got to look at my cheat sheet.
• 10:57
  Speaker 1: Christy Van On is with us.
• 10:58
  Speaker 1: Brian Daugherty, coming from Total Farm Marketing, is going to be here tomorrow and on Thursday.
• 11:03
  Speaker 1: Bill Beam is the Farm Service Agency Administrator from DC.
• 11:06
  Speaker 1: First time that since he's been confirmed he's going to be in this region.
• 11:11
  Speaker 1: He's actually coming in early.
• 11:12
  Speaker 1: He's going to see some of the dry bean harvest and some sugar beet harvest and then he's going to be on our panel on Thursday morning at 1030.
• 11:19
  Speaker 1: And I sure hope folks come out and see him as well.
• 11:22
  Speaker 2: Very good.
• 11:22
  Speaker 2: Well, with that, I just want to say thank you.
• 11:24
  Speaker 2: I know I maybe tell everyone how I wandered into a tent 10 years ago.
• 11:28
  Speaker 2: Go ahead, embarrassed me a little.
• 11:30
  Speaker 1: It was cold.
• 11:31
  Speaker 1: It was cold.
• 11:32
  Speaker 1: It was one of the early years we were doing this show and we were in a tent that the wind blew all back and forth.
• 11:39
  Speaker 1: But you came wandering in with a suit and tie and I thought you were a used car salesman at the first start.
• 11:45
  Speaker 2: I was selling some retread on some tires, that's all.
• 11:47
  Speaker 2: But you were one of the first people ever to interview me and, with a microphone and headset, you invited me to the studio.
• 11:53
  Speaker 2: Actually, I think I might have interviewed with Randy you weren't there, but I think Randy had me in the studio and that was like I got the the bug.
• 12:00
  Speaker 2: I put the headset on.
• 12:01
  Speaker 2: I thought it was pretty cool and I gotta tell you you've been a wonderful guest.
• 12:04
  Speaker 2: I think we might have you back well.
• 12:07
  Speaker 1: I appreciate you be on stage with us today too.
• 12:09
  Speaker 2: It's a great show don wick red river farm network.
• 12:11
  Speaker 1: Tell people about your newsletter comes out every monday, called farm net news.
• 12:14
  Speaker 1: It is a great snapshot of what's going on in the world of agriculture, not only what's happening here in our region, but across the footprint of agriculture as well.
• 12:22
  Speaker 1: You can just go on our website, rrfncom, or shoot me an email.
• 12:26
  Speaker 1: You can find it on our website too, and I can get you all signed up.
• 12:29
  Speaker 2: Can you brag up your staff?
• 12:30
  Speaker 2: You have a group here.
• 12:31
  Speaker 2: There's folks sitting.
• 12:32
  Speaker 2: They can't see them, but tell everyone about your group and who's with us this week at Red River Farm Network.
• 12:38
  Speaker 1: We have a small and mighty team here that puts a lot of work together to make this all happen.
• 12:43
  Speaker 1: Brought Randy back from retirement.
• 12:45
  Speaker 1: Randy Coonan's been with our team for 18 years, retired in July.
• 12:49
  Speaker 1: We've got Tyler Dickerson and Jamie Dickerson.
• 12:52
  Speaker 1: Tyler Donaldson, jamie Dickerman I've got too many D's going on at this point and Tyler did that, you'd yell at him.
• 12:59
  Speaker 1: Yeah, he knows, knows that.
• 13:00
  Speaker 1: And Jay Rader's with us as well to keep us in paycheck.
• 13:03
  Speaker 1: So a great team.
• 13:05
  Speaker 2: I got Tyler's back.
• 13:06
  Speaker 2: Tyler's over there.
• 13:07
  Speaker 2: Thumbs up, all right, tom Grisafi.
• 13:09
  Speaker 2: Agbo Media.
• 13:10
  Speaker 2: Hey everyone, our new website's out wwwagbullcom.
• 13:14
  Speaker 2: Red River Farm Network.
• 13:15
  Speaker 2: If you missed an episode, of course you're going to watch this on YouTube.
• 13:19
  Speaker 2: You're going to listen to it on Apple and Spotify.
• 13:21
  Speaker 2: Don Wick and the Red River Farm Network have all that too.
• 13:24
  Speaker 2: So if you like listening to podcasts little snippets or if you want to see all the shows that they're producing, I think you're going to see about maybe 12, 16 of these YouTube videos.
• 13:33
  Speaker 2: If it's succession planning or farm marketing or whatever interests you, you're going for a ride.
• 13:38
  Speaker 2: Click on the Red River Farm Network network, hit the youtube channel, give it a like and subscribe fargo north dakota, and we'll do this again next week.
• 13:55
  Speaker 2: Thanks, tommy, thank you don.