Early harvest price action: weekly market outlook, Sept. 18-22nd

Chris: Thank you for listening to the Weekly Market Outlook. It is our pleasure to bring an industry-leading market analyst to provide you with the most value possible in your farm business. Please reach out anytime by emailing cbarron@agviewsolutions.com. Welcome everybody to another episode of the Ag View Pitch. We are heading into a new marketing week. The third week of September, the 18th through the 22nd. Harvest is underway in a lot of areas. Few areas yet got a couple weeks ago and some are already hammered down. So with that said, we got lots to talk about today and we are lucky enough to have with us Pete Meyer with S&P Global. Pete, how's it going?

Peter

Meyer: It's going well, Chris. Thank you very much. And I hope the same for you.

Chris: Yeah, well, we're excited to have you on today. We're also excited. I want to mention to everyone to remind everybody about the Ag View Executive Business Conference. You're going to be one of the presenters there talking about renewable fuels and all kinds of really cool stuff in the industry. So, just a reminder to everybody, the January 24th, 25th, and 26th, we're getting a lot of people signed up. It will get full. And so if you're for sure planning on going, I'd recommend either you get a rainy day or you get a minute to go ahead and go on the Ag View Pitch, or excuse me, the Ag View Solutions website and, and click on conference and Get signed up if you're not. And if you got questions on anything, reach out to Shay or myself or Alyssa.

Peter

Meyer: So with that said, I appreciate, I appreciate the invitation. I look forward to being there and I can think of, a lot worse places to be than Phoenix in January.

Chris: Yeah. Yeah. It's a beautiful location too. It's just, it's just, really cool. And the networking and the discussions, I can't wait for you to be there. Pete, it's, really cool. A lot of great farm operators and the networking is just super awesome. But with that said, I want to start in an area that I would consider you probably the foremost expert of, of a lot of the people that we work with on USDA reports and kind of what goes on. You're probably the person that I know that's the most in tune to a lot of these numbers. So we had a USDA report out last week. A couple of the key things, you know, everybody was expecting the yields to go down and, and they did some. For corn and soybeans. And the other thing though is acres changed and there's not a lot of demand out there and some of that stuff didn't get messed with. But we've had some time for the dust to settle.

Give us, give us your two cents now that things have settled back down. What do we need to be watching?

Peter

Meyer: Well, I think that, you know, the acre increase for some reason when you looked at the surveys, the Bloomberg and Reuters surveys, They were only looking for a 200,000-acre increase in harvested area. Harvested area went up by 800,000. Planted area went up by 800,000 as well. Now, when the August FSA data was released, we looked at it and I'm kicking myself in the butt a little bit because I raised acres by 500,000 and we telegraphed to the clients that we thought it was going up by 500,000 based on our analysis. What I failed to do though, I took a top-down approach and, and that granted hindsight is 20/20, but in essence, Nebraska was up $450,000 from the early numbers to the FSA data. So that should have been an indicator to me that it would've been even higher.

But I do take some, let's say, comfort in the fact that we did tell everybody, look, it's going up by, by at least $500,000. But, uh, you know, And in soybeans, we thought, we thought 50 to 100, and it came up 100. So that was good. On the yields, you know, what's interesting is that we, we run a, um, a farmer survey, and the farmer still had a lot of, um, uh, a lot of potential on their mind. And I think that has to do with planting dates, and we can talk about that a little bit, and ear count and that sort of thing. But, you know, our farmer, our farmer data came back like at a record high, 177.5, which was actually up 2 bushels from, um, our, our, uh, our August survey. We were surprised because when I came off a crop tour, I wrote to our clients I thought the yields were 174 and 49.5, and they came out at 173.8 and, and 50.1.

Um, so I don't, you know, I, I, it'll be interesting to see what our survey says, says next month. Everybody gets smarter as the year go— as the, as the year goes on. But, you know, as far as the corn is concerned, I mean, you really— when you look at the balance sheet, really nothing changed. And I think that was a bit of a surprise, right? I mean, in August we had production of 15.11 billion bushels, and in September, with the lower yield and higher acreage, we had production of 15.13. Um, you know, there was a small, uh, decrease in beginning stocks of 5 million bushels, and carryout was up 18 or 19 million bushels. So, you know, it's when the, when the USDA sees this basically unchanged production number, you know, they didn't, they didn't do much with demand. And I, and I get that. Um, on the soybean side, really, uh, I'm very worried about the soybean, uh, crop.

And we all know it didn't finish well. We are starting to get reports of BB, BB-sized beans coming out. USDA did raise both harvested and planted by 100,000. They lowered the yield to 50.1. I think that's a very vulnerable number at this point, and I don't think you'll find much argument out there that it is vulnerable as well. Total production was down about 50 or 60 million bushels. And then what the USDA has to do though is that they reverse engineered, they definitely reverse engineered the balance sheet., but they have to, you know, they keep telling you, or they, they imply that the carryout can't go much below 200. I mean, we've been down years past, okay, 170, 160 or something like that, but it always seems to come back. 200 is kind of the number that they have in their head, that the amount of bushels they need in the country to keep everything moving, right?

So They reduced crush. I'm sorry, they reduced crush by 10. They reduced exports by 30. I mean, exports now are down to 1.8 versus 2.15 just 2 years ago, billion bushels. So, you know, the soybean balance sheet is being reverse engineered. But at the same time, Brazilian farmers are planting their beans already. So, um, you know, as far as the market is concerned, I, you know, I, I mean, I, I personally think that this thing is going to be over by October, uh, given the dry finish and everything that went on. And by over, I mean the numbers you're going to see in, in, in just 3 and a half weeks, or maybe 4 weeks it is, uh, no, I guess it's 3 and a half weeks on October 12th. They could very well be the end numbers because this harvest is going earlier, crop matured earlier, the crop was planted very well. But, you know, at this point, I think it may all be over by October.

I don't really see any surprises.

Chris: Yeah, I think there's a couple of things I would have you speak to. So, you know, there's a lot of farmers. I mean, farmers generally right now are completely resistant to making sales at these levels. And so the question is, you know, the, the industry is going to have to buy stuff, you know, they're going to have to buy grain at some point. Where's the, where's the give and take? At some point, you know, farmers are going to have to make sales. They don't have to, but they have to on anything that's overrun. There are really big areas of where yields are really good. I happen to be in an area where yields aren't so good. I was telling you before, hand. I mean, we're— we've taken a couple of cornfields out. We're running in the, in the mid-190s, mid to upper 190s. We're about 30 bushels off of our APH. So we're way off the pace. I think we're going to be off the pace on soybeans.

Our first harvested soybean field came in pretty good. Small beans, like you said. But, you know, farmers are going to need to sell at some point. Does that pressure the market? Do the processors come in and just, you know, start buying up? I mean, ethanol plants and all that. I mean, basis, all those things speak to, speak to what we, what we could see in some of the drivers as we, as we head more toward that, that mid-October timeframe.

Peter

Meyer: Well, there's a couple of moving parts here. So let's start, let's start with domestic demand and let's, let's talk about ethanol. So ADM Decatur. Had an explosion this week. They are reopened. That's the largest ethanol plant on— according to the Renewable Fuel Association data, the largest ethanol plant in the country. They are back open a little bit, but very limited to their dumping hours and also the number of dumps that they'll take. So, you know, does that mean that other ethanol plants throughout the country might be bidding a little bit harder for it because there's a little bit more demand to make up for the ethanol that's going to be lost on the production side from ADM to Caterpillar. You know, that's something you have to kind of weigh. But I wouldn't, you know, if you see a bid show up that looks good from your ethanol guys, I mean, this is not going to last forever.

ADM will not, you know, the local rumor mill there is it's going to take them quite a, quite a bit, quite a, quite a while to get back up to full. So, you know, maybe they're just taking corn to process for other products. Maybe they're just not, maybe they're not taking corn for ethanol yet. But, you know, will that, will that put some pressure on other ethanol plants in the country to make up the difference? I can, I can see that. But it's also happening at a time when harvest, harvest is ongoing. So harvest farmers in the Decatur area, are a little bit nervous because they all sell into ADM. You know, what's that going to mean to the price there? Also, you know, your gasoline crude prices are very, very high. Obviously, we traded over $90 in Brent this week. I mean, these are very high prices. Gasoline prices going up, good for ethanol margins.

As far as the demand is concerned for fuel, you know, everybody's back to school at the moment. We are getting kind of a low, so there's a give and take there. On the export markets, I very much worry about these Mississippi River levels. I think that if you're going to export corn and it goes to Asia, it's going to have to go out of PNW. So we've already seen, you know, we see barge freight at 1,000% or something. I had a conversation with the harbormaster in St. Louis. Through a, through a third party. I didn't talk to him directly, but, you know, they're just really worried. I mean, they're, they're loading half draft, if that. And, you know, what does that mean? The Panama Canal is extremely low water levels. You know, what does that mean to get corn downriver? You're going to have to pay, you know, the freight rate is going to be awfully high. What does that mean to the end users?

The end user going to be willing to pay up for corn if he or she knows that they have to pay up for rate for freight to get it downriver to the export market. The PNW shuttle prices are really starting to show some signs of life. Anything that's going to China, that area, we think has to go out of PNW. And when we start to take a longer look at it, we use Drew Lerner at World Weather, who we like very much, and he's very good. He doesn't see this, this dryness really, uh, you know, not to say that people aren't going to get— you're not going to get a shower here and there. But any sort of break of this to get some, to get some, uh, moisture into the Mississippi or the Illinois or the, or the Ohio Rivers and the tributaries, you know, he doesn't really see that until November.

And then, you know, then all of a sudden we're in winter, and usually we have the lowest river levels in November and December because— in January because the snow, the snowpack just sits there. So There's a lot of things going on out there, Chris, that are stuff that we're, you know, well beyond what the yields are, what the acres are, what the production are. And I, you know, it really is a, a pretty complex picture at the, at the moment. Never mind what's going on in South America as well.

Chris: Mm-hmm. With all that complexity, you know, the, the listeners here as they are in various stages of harvest, are also at various stages of sales. You have— and we've talked about this for about the last 3 weeks now— you have those rooting for lower prices during the month of October, and you have those rooting for higher prices, you know. And so there's a couple of different camps out there, you know. And what you have to take into account, the insurance indemnities that could be pretty high in some areas, significantly, could be very significant in some areas, even if they're yielding their APH with where, where that's set up. Where do you see, you know, I've been throwing the last few people under the bus. I might as well throw you under the bus too and ask, ask the question, you know, what are the probabilities in your view as we head into harvest?

You know, I mean, a lot of times we see that harvest low historically come in, I think, in the latter part of September typically. But, um, with all of those complexities, what, what's your take?

Peter

Meyer: Well, you know, this 473.5 basis December futures is now a double low here, right? So the technicians are kind of looking at that. It just seems to me that with the amount of uncertainty out there, I don't, I don't necessarily know that it gets, you know, just smoked. I don't, I don't really, I don't really see that. I mean this $4.75 area, $4.80 area certainly seems to be an area that garners a lot of attention. But I also think what we notice as well is that the volume is just awful, right? Nobody's really trading the thing. So, so what's your range? So what's your range then? So where do you go? I mean, certainly over $5, you have to, you have to start looking at stuff. But you know what, Chris, this is the same conversation you and I had 4 weeks ago, 8 weeks ago, whatever, right? I mean, once we got that break, we all said, okay, over $5 You got to let it go.

But I think, you know, it's just, it's one of those things that we have to, you know, this is the time of year too where we're so focused on what's going on in the US when we really have to take a global picture, a much larger global picture. And that includes Argentina and Brazil. So let me just run a few numbers past you, Chris. So in 1920, because they just raised Brazilian old crop corn production. I think it's 137 or 138 million metric tons. We, we think it could be as big as 140, but regardless of that, so let's look at where we are. So in, in, in the 1920 marketing year, Argentina and Brazil combined produced 153 million tons of corn. This year, or in the '23-'24, 184. And Argentina had a bad summer, this year, or a bad season last year, but with the El Niño, that could very well rebound. That's a 20% increase in production from 19-20 to '23-'24.

Very similar numbers in soybeans, 177 and change in 19-20 to 211 in '23-'24. That's up 20%. But now let's look at what the global stocks have done. There has been demand for corn. So despite this 20% increase over the last 5 marketing years in production, global stocks of corn are only up 2%. Why is that? Well, some of that has to do with Ukraine. Okay, and we'll talk about that in a minute. Global stocks of soybeans are up 25%. So this is an issue that I think— I know everybody's focused on marketing their current crop, but when you start to look at those '24 prices over $5, as well in Dec '24. I don't think you— I don't think that should go unnoticed because if the El Niño kicks in, the northern part of Brazil is not going to do well. The southern part will be fine and Argentina will be fine. These guys are not— and ladies are not going to take their foot off of the gas.

They're just not. And we do see that the first season Brazilian corn will be a little bit smaller. Because interior prices are $1.95 in Mato Grosso. So we may not get the acres in corn, but they'll certainly come back and plant safrinha on top of that. So what I'm telling you there is that there may be some room here to move the market up a little bit. Certainly the Mississippi River being as low as it is and the tributaries, you know, that's a negative this time of year. The ethanol, That's so-so. PNW, you know, if you're, if you're in the Dakotas or Nebraska or even in Iowa, you know, and your buyer can get it out to those shuttles, that's where it's going to go. But, you know, price-wise, I think it's very, very— you're— it doesn't seem like we're going to do a lot.

I mean, $4.75 to $4.80 basis, the December futures seems to be, you know, fair value at the moment based on what we know. So anything over 5 should be sold and I really don't see much risk below 4.50, but that's going to frustrate a lot of people.

Chris: But you know, it's the, there's just a lot, I think, you know, our clients are heavy, more heavily sold. Um, but from what I hear from some of the others that we work with on the, on the elevator side and on the, uh, processor side, there's, there's not a lot sold.

Peter

Meyer: Well, no, we hear that. We hear that as well. But we also hear that there's not a lot, a lot of sold of old crop Brazilian corn, which scares us, but it doesn't— it's getting too late for them to make an impact in the market. Because the rainy season is about to start there in about 3 weeks or so. And there's just piles of corn sitting around. So that may just dissipate as— excuse me, as far as their carryout is concerned. But what I worry about is, to use a term that guys you probably know, Luke Lawrence and Nick Ewers, use all the time— store and ignore, right? I mean, it's one of those things where you cannot, you cannot ignore it.

Chris: And the interest rate's going to kill some people if you can't, you know, you got, you got to take some money, right?

Peter

Meyer: Never mind the fact that, you know, we're already looking at, we're already looking at next year's acres in the US. And when I was on crop tour, the overwhelming sentiment was I have a much better chance of producing 220 corn than I do 60-bushel beans. 'Cause if I miss a rain on my beans, I'm done. And by the way, Pete, I just bought anhydrous at a 10-year low.

Chris: Right.

Peter

Meyer: The anhydrous prices have bounced a little bit. Yeah. So what does that suggest? Again, that suggests higher, not, not higher corn acres year over year, but certainly, you know, after planting, You know, the most recent data, let's call it $95 million, was $94.9. Certainly we could see a number around $93 again.

Chris: Mm-hmm. Well, and a lot of the budget— well, go ahead.

Peter

Meyer: No, no, no.

Chris: Well, a lot of the budgets we're seeing for 2024 are, you know, we're seeing anywhere from about 5 to 10% ROI. For, you know, the corn, soybean, and wheat guys. And if in corn specifically, if, if you can get corn priced in that $5.20, $5.30 range, that gives the producers a pretty good margin because fertilizer has been acquired at quite a bit less price and they've stabilized some of the other expenses that have gone up so much lately. Before we go too much past this, though, I want to have you hit the same comments on soybeans. As you did with corn as we go into more robust soybean harvest here? What are some of the things guys need to be thinking about that, you know, need to sell off the combine or, you know—

Peter

Meyer: Well, that's— I mean, you know, when everybody looks at it and I think I'm not on an island to say that I think that the soybean crop is getting smaller, right? I mean, 50.1 seems very vulnerable to me. You take another half bushel off that, let's say, and now all of a sudden you, you got to find 40 million bushels of cut, or 20 million bushels at least, to say, let's say a 200, or if you cut off 40 million, around numbers, you're down to 180. But the thing is, is that I, I know we've sold off here, we're down around this $13.50 level, whatever, but you know, we just, the $14 Everybody says, well, beans are going to $15. Are they? I mean, we're at $14. Okay, we're at $13.50 now, but I mean, just a few weeks ago we were at $14. Where do we expect that to go? As I said, when you look at combined Argentina and Brazil production of 211 million tons, I mean, where are we going?

I mean, we have low river levels. If guys try to sell it off the combine, you know, I get it that nobody, nobody wants to, you know, everybody wants to store their corn. I totally get it. But, you know, yeah, we're going to be, we're going to be empty. We're going to be empty this year. We were empty last year, basically, at $2.50. The year before, we were very tight. You know, when you look at the average farm price in '21-'22, it was $13.30. The USDA is currently looking for something 40 cents lower than that, even though the carryout's lower than that. Why is that? Well, I just told you why that is, because Brazil and Argentina are putting the hammer down. So, you know, we are starting to cut our exports because we don't have it to sell. We have demand from the renewable diesel sector. Certainly, I think the USDA has biofuel demand for, for soybean oil, like 12.5 billion pounds.

We're at a 14.5 billion pound run rate at the moment. We're going through 1.2 billion pounds a month to get to the biofuel guys. And we don't even, and you know, we're waiting for this additional crush capacity to come online. We think it's, we've seen some additional crush capacity come online. You know, we need more, but I mean,, you know, we could end up, the soybean crushers could end up importing beans for crush, even though there's some variables there that I've, nuances that I really don't, don't, don't, your audience probably doesn't care about that regarding importing beans for biofuels. But, you know, the fact of the matter is, is that the crush demand is, it continues to, continues to strengthen, but You know, if we have BB-sized beans, are the crushers really going to be that interested in them? Um, do they have to be interested in them? You know, it's, it's tough.

I mean, I, I get it that on, on the face of it, you're looking at it, you're saying, okay, Pete, crop's getting smaller, we're at $14, you know, we rally 7%, we're at $15, why, why, you know, why should we be doing it? But, you know, historically I mean, yeah, 2 years ago in '22-'23, the average farm price was $14.20, and we just can't— and now we have a smaller carry on us at $12.90. And the reason for it is just exports just disappear. So $14 is a good price for the current crop in my estimation. You know, if you're really going to hold out for 7% to get to $15, I do worry. But then again, yeah, much like in corn, Chris, I don't really see the downside. I just don't, you know. Unfortunately, I think we're probably going to trade between, you know, let's call it $13.25 and $14.25 for, for the foreseeable future.

Chris: So, yeah, interesting. Yeah. So I guess, you know, as we get closer to wrapping up, one of the things that I said, you know, at the beginning is that you're kind of the not only the expert we go to a lot on the USDA reports and stuff, but also you're the guru on renewable fuels. Let's wrap it up with kind of where things are at there, you know, with new, new crush plants being put up and the hopes of ethanol saving the day on the airline side of things down the road. How far out are we? What can we be hoping for there? And, you know, because Like I said, I think, you know, the '24 budgets look good, but you're still probably, you know, what, '25 before we start to see price influence from that kind of stuff.

Peter

Meyer: Yes, you're absolutely— you're absolutely at the crush capacity from what we understand. I mean, that's still coming online. It is likely a 2025 event. We will see some increased crush capacity in '24. Regarding the ethanol, ethanol to jet or alcohol to jet, whatever you want to call it, you know, we're still— we have a few— we have— well, there's two big airline— there's two big independent producers out there and we have meetings with both of them this week to talk about, you know, ethanol to jet and whatever. That's still though, that's probably a little bit out there as well. That's probably 24, $25-ish. So, you know, like I said, I mean, they are— we keep, you know, Tyne Morgan asked me on Crop Tour in front of the audience, hey, you know, we're not seeing this big explosion in it. Well, if you're paying attention, you're seeing it.

I mean, yeah, okay, you haven't seen the real explosion in price. One of the things that you're seeing though is that the RIN prices, the Renewable Identification number, prices have gone down. And the reason for that is because these companies have produced more renewable diesel and biodiesel than the mandate requires. So that forces the RIN prices down. So that gets a little bit, a little bit sketchy. But, you know, this thing's not going away. And but it's also, you know, not going to happen overnight. So we don't see any, any change in it. It might be a little bit slower than people had anticipated, but slow and steady wins the race, right? So we'll see. We'll see. I mean, Corteva still has this deal with Chevron Marathon where they want to plant 1 million acres of winter rapeseed from Illinois south. You know, camelina really hasn't done much. We looked at some of the FSA data.

They already planted 48,000 acres of spring camelina. They might, and, and to try to figure out how much they planted in the fall is difficult 'cause the FSA data covers that under undercover crops. So, you know, we have seen, I have farmer friends, guys who, you know, who planted camelina in Iowa and it was a disaster. I've got a guy who planted it in South Dakota east of the Missouri River and it wasn't very good. They baled it west of the Missouri River. It's a little bit better. So it's probably not, you know, camelina is the, is the crop everybody wants. For renewable diesel because it has a 40% oil content versus 19%, let's call it 19% for soybeans, even though this year probably be a little bit lower given the dry weather. But, um, you know, they're still working, they're still working hard to find alternatives.

Um, you know, I've talked to, uh, many oil companies who think that you could just flip the switch and plant 100 million acres of soybeans, in the US in a couple years.

Chris: And I'm, and I'm like, well, they're gonna have to bid up a hell of a lot more than where the, the corn-bean ratio has been.

Peter

Meyer: This is a conversation that I have with, with my, my good friend Steve Elmore, who's the chief ag economist at Corteva all the time. You know, we look at the ratio, the ratio of 2.5, 2.6, you know, these historic ratios just don't, they're not gonna draw any, any more bean acres in here. My opinion on this is that the ratio has to go to 3, but that 3 is not 5 and 15, right? 5 for corn and 15 for beans. That 3 could be, you know, 4.25 and 13, something like that in new crop. But that's really, and we're not gonna get there. So that's really where I kind of draw the line. Draw the line there. I think that the, you know, this, this, this old mentality of, of ratio levels, you have to throw that out the door. And I've told oil companies that literally you'd probably, for you to get that many acres, you'd have to be at a 4-to-1. And I don't even have confidence in that, in that number.

You know, $16 beans with $4 corn. I mean, I really don't. Yeah, that confidence.

Chris: Yeah, that's quite the spread.

Peter

Meyer: So yeah.

Chris: Anything else I didn't hit you up on as far as kind of where we're going as we get into the heat of harvest here?

Peter

Meyer: Sure. I'd like to talk about two things under one umbrella, and that umbrella is potential. When we look at what the USDA— when we take a deeper dive and look, you know, in September, what they do is they have their OY plots, their objective yield plots, right? They have 1,000 of them. When we look at ears per acre for the 10-state region and pods for an 11-state region, the ears per acre were remarkable. Remarkable. You start to look at some of these, some of these numbers, these are some of the highest numbers. I believe that the ear count was like 29,400 per acre for the 10 states, yet the yield was lower. So when we look at, so what that tells us is that, you know, or I shouldn't say it tells us because I've already talked to NAS about this. The ear size just isn't there, whether it's the girth or the length.

And that is probably attributable to that June heat in a lot of places like Illinois. And then July rain came and everybody thought, yeah, we're good. And you're not good. But what I wanna impress upon here is that this potential for this early planting, we could have easily been a 180, easily with those amount of ears at 29, you know, at, with, with some decent weather. And I think that that's, I, I think that the audience needs to keep that in mind as we, as we start to look next year. Okay, we didn't get there this year, but you can't count on that every year. And the potential, the ear counts in Iowa and Illinois, Illinois's ear count was higher than last year. In September. Now the ear count will go, will ear count will go down here.

There's no question about it because in September they count, you know, every plant that has a double ear gets counted, even though we all know that that second ear gets cannibalized for the most part or, or shows off, spits out very little grain. But the potential, and, and we talked about it on Crop Tour, the potential is tremendous this year. The bean potential was not that great. When you look at pod counts, Pod counts are maybe average to the last 5 years. '19 was the lowest pod count. We all know what happened in '19. It was so wet. Everybody got it planted in the east very, very late. You know, pod counts weren't as high. It's interesting though. I draw the analogy to 2018. So in 2018, pod count, the crop finished well. Pod counts were higher in September, went higher in October, higher in November, and then, and then stayed the same in final.

And corn, when you look at it relative, we're at a, we're at a higher ear count than we were in '18 in corn and a much lower pod count than we were in '18 in beans. So here again, you know, we got the beans planted on time, we got 'em planted early, but you just don't, I, you just didn't have that potential because you didn't have a shot because the August, uh, dryness and early September dryness just killed the crop.

So, you know, I just, you know, if you're, if you're looking at the markets and thinking, well, you know what, we've never really, you know, 177 and change is a record yield, you know, or looks like— and we look at the yields, you know, over, let's say, the 5 last, the last 5 or 10 years, certainly, um, you know, we're starting to look at our yield for next year Uh, we haven't decided on it yet, but when I start to look at like the University of Missouri factory, I mean, they're a 182.8 or 183 or something like that. People like, they're nuts, this and that. No, no, no. If you take the time, you can get this online. You look at the ear count in those 10 states. I'm not saying we can get to 183, but I understand they're, what they're looking at because the ear counts are very, very, very high.

So you get you get early planting again next year, I mean, I, I would think the potential, the potential is there, uh, the potential could be there all the time. I would— we were— I was very surprised to hear, Cal. Yeah, it was, it was, it was tremendous, just tremendous. Yeah, so you look at, you look at like, like Illinois, your count was like 32,250. I mean, they had a record yield last year. They're not— they will not have a record yield this year. They'll probably be 10 bushel below it, or 214, maybe even a little bit more. Their ear count last year was 31,500. It went up to 31,800, but not near 32,250. Iowa's ear count was 32,050 last year. It was 30,800 for the entire year. And the highest number we can see is in '21, 31,750. So, you know, it doesn't necessarily mean that farmers are planning planting heavier. It just means that the emergence rate was so good.

So good with, with your early, with your early planting. So I think you have to, you know, you have to kind of, you have to kind of look at that. I mean, even, even Minnesota, okay, Minnesota, we know was in bad shape. I mean, they had second highest ear count in the last 5 years, 31,350. Big numbers.

Chris: Big numbers. Yeah. The perspective there that you're, giving us as producers is being one that's in an area where the crop has— and, you know, throughout the whole month of August, I made the comment last week with Ryan Moe is that, you know, our crop is dying, not drying. And being in this area, if, if I hadn't had been blessed enough to get to go and travel all over the Corn Belt, I would have a different opinion, I think, because I, I saw a lot of good corn all through the growing season. I kept saying that every week. I seeing good soybeans and, you know, these— the drought area is the drought area. But, you know, you go and you look in Ohio and Indiana and big parts of Illinois and places in Iowa too, for that matter, where the crop is really good. The backyarditis danger for us as producers and how that impacts us and influences us.

I'm taking what you're saying is, you know, listen to that and be cognizant of the big picture. Your backyard's very important, obviously, because you have basis and all those other things to consider. But I take what you're saying really as an important perspective because sometimes I think we get ahead of our skis a little bit and we think we know something. And sometimes you can be smarter than the market, but we live in a regional market. All of us do, myself included. And we can be easily influenced. I know Joe Vaclovic always says, you know, he loves being in, you know, where he's at in Nashville because he can't see the corn crop. It doesn't influence his, his thought process, you know. And I think, you know, a lot of times we also think that production is, is the big deal.

Well, it's half the equation and a lot of times it's not even half the equation because we got to be able to sell this stuff, too.

Peter

Meyer: No, I totally agree. And, you know, I live, I live far from the Corn Belt, and I try to go into Crop Tour every year. I've been doing it for 17 years. And, you know, I always try to go in there with a little bit of a non-bias. And, you know, there's so much bias on social media and everything else. And, you know, it's just after a while, you just get exhausted by it. And, you know, for the most time before I go on Crop Tour, I spend a lot of time looking at the, at the other side of the equation, the demand side of the equation. But You know, this year I think was a, was a tough year. A wise, a wise young man told me about 15 years ago when I first met him that when you pull up on a cornfield and it looks flat like a pool table or nice and even, that it, it, you know, you have something there. And that was you, Chris. And I've used that for a long time.

And this year when I started to talk to the guys in central Illinois and in Decatur in that area, they were telling me that while it got in early and it was nice and flat, when it, when it dried, it was nice and nice and even, I should say, not flat, uh, nice and even. Uh, when the dry weather came, it just stopped and the, and the, and the, and the, the plant stayed at the same height and still looked good. Then the rains came and all of a sudden the plants started to become uneven in the field and you can, you could see it. And I knew then, thinking back to what you told me 15 or whatever it was, 15, 16, 17 years ago, And I thought, boy, that's going to be a problem. And I think it— but it also speaks to the variability in this year's corn crop for sure.

Chris: Mm-hmm.

Peter

Meyer: Yeah, for sure. And that's, and that's why I think the yields are, you know, was I a rocket science scientist coming off of Crop Tour 174? Absolutely not. In this business, when you're estimating yields on something like this, it's better to be lucky than good. And I was lucky. There's no question about it.

Chris: But yeah.

Peter

Meyer: The fact of the matter is, is that, you know, you could really see in your area of Iowa, um, you know, up, up past, uh, Waterloo and all the way up the spine there to Rochester, you know, you go from county to county and see who got the rains and who didn't. Oh yeah, so evident.

Chris: Oh yeah.

Peter

Meyer: So, you know, it's not easy, but I have— the first thing I always look at when I'm on— when I first go on the road is always the evenness of the field, and you taught me that many years ago.

Chris: Yeah, uniformity is key. Variability usually reduces things pretty quick. It doesn't take very much low yield to bring, you know, bring the, bring the average yield down. But with that said, I think this has been a good, good conversation. I think people have a lot to think about. And, and there's, you know, thankfully we have crop insurance and we have some of those other tools to use to kind of manage things and be paying attention to what 2024, your perspective on that was really good. And appreciate your perspective on the USDA report and kind of what all that meant and kind of what some of the things are we need to be paying attention to as we head into, head into harvest and maybe have to sell, sell some crops off the, off the combine yet. And for those that need to continue to do some marketing, just some good perspective and really appreciate your time today.

Peter

Meyer: Oh, it's my pleasure. And if there, if I'm wrong and, and you wanna send some hate mail, send it to Chris.

Chris: Okay. Yeah, that, that's right. I'll forward it to you.

Peter

Meyer: So very good. That'd be great. Yes. No, I, I, you know, no, I, I, I appreciate it. And I think that, you know, a lot of, a lot of what I do on the, on the, on the production side comes from input from farmers like yourself and others. And as you know, You know, I, I appreciate that very much and that's why I'm happy to do these sort of things where I share what we see from, from the other side, so to speak, because I, I appreciate the input from farmers very much. Thank you.

Chris: That's a, that's a huge part of the equation. So with that said, hey Pete, really appreciate your time.

Peter

Meyer: Thank you. You're welcome.

Chris: You bet. And hey everybody, um, as you guys get rolling, my last comment is, um, pay attention, be safe. Um, last, Last week I had our first round of harvest and I was amazed how tired I got 2 days later. And so, pay attention to your health. Try to eat healthy. Try to get your rest. Try to be on target with yourself personally, because that just keeps everybody a lot more safe. And with that said, hope everybody has a good productive week ahead. And with that, we will catch you again next time. On the Ag View Pitch.