Is it time to switch some soybean acres back to corn?

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 week. Happy Easter everyone. Hope everybody had a great Easter with family and everything. And as we head into a new marketing week, the 18th of April through the 22nd, We're lucky enough to have with us Jared Creed, JC Marketing, and also Brent Judisch is going to help me co-host this. So how's it going, Brent?

Jarod

Creed: Very good today.

Chris: Good, good. So hopefully you got— you brought some really good questions with you so we can quiz Jared here. Jared, how are you doing?

Jarod

Creed: I'm good. I hope he just doesn't ask me John Deere questions.

Chris: Yeah, well, you might be stumped. Yeah, we won't talk too much on equipment unless Brent goes off on a tangent here on us or whatever, so But, uh, well, let's go ahead, you know, heading into a new week. We've had a lot of crazy things going on in the markets. You know, we just came off having a meeting with you, Jared, kind of talking about all kinds of different things. And so I'm going to throw it out to you right now for some perspective just on, on some things that we're looking at as we go into a new week. What things do farmers need to be paying attention to other than the, the cold weather, and hopefully it's going to warm up and planting will happen.

Jarod

Creed: I'll agree with that. I think that it would make a lot of people feel better if we could actually get some field work started here in the next 10 days. You know, to kind of rewind the calendar here a little bit, what we've just gone through outside of Russia, Ukraine, inflation, so on and so on, we just got through a pretty big period of the, the Goldman Rule. Maybe not a very common household item.

Chris: Yeah, so what is that?

Jarod

Creed: Just think about it in a specified time frame enormous amount of positioning in the market from outside paper speculators, more or less, uh, have a period of time that they move from one contract month to perhaps the next or a different time frame. Uh, what I'm getting at here is we've seen an enormous move in March— excuse me, May-July corn about a month ago. The inverse, May was almost 40 cents higher than July. About 6 weeks ago, May was $1.50 higher than new crop December corn. Okay. Uh, you know, at this point we are talking about a 5 to 6 cent inverse May to July, and we're talking about a 50 to 55 cent inverse May to December. Now May to December is a very, very rarely discussed type of spread, so I'm not going to spend any time on that.

What I'm more or less getting at is I do kind of wonder if after this roll has taken place, a long position in the front month has to get out of that contract. So that would be selling that position and buying a later contract position. And I think a large percentage of that money obviously went from May to July and May to December, which certainly aided new crop deferred contracts. We've watched December '22 corn go on up to $7.35, give or take, after just, you know, a month ago being darn near a buck lower. Just continues on its march. Plenty of rhymes or reasons to think about that. But then also even out in the 2023 corn rallying all the way to $6.60 now. Maybe my, I don't want to say concern, but just something to point out that perhaps some of the easy rally in those spaces from being the beneficiary of the roll is over now.

You're going to have to continue to provide more fundamental reasons or outside financial market reasons to continue to push that market.

Chris: They call that feeding the bull.

Jarod

Creed: Yeah, feeding the bull is a pretty fair way to say it. And obviously we are at elevated prices for plenty of different reasons. We're not arguing that. Uh, as I said before, the risk is change to any of those pieces. I'd say the other thing that's just kind of sneaking up on me here is, um, you know, interest rates are starting to catch a lot of attention. It's starting to catch a lot of media attention as well. 30-year fixed mortgage rates have jumped over 2% since the beginning of the year. I think it's been a secret— or it hasn't been a secret that we expected interest rates to climb eventually. I don't expect that to just be a light switch to, you know, turn off the light on a commodity party, but that seems like it can have a, a pretty detrimental long-term effect on the U.S. consumer in the event we continue to trend in a direction that we're in.

CPI numbers this last week were higher again. Uh, U.S. consumers just, you know, taking the blunt from a lot of different directions— fuel price at the grocery store, interest rates, the cost to borrow money is going up. In my opinion, again, that just can't last forever, but that might not be a deal that takes place until 2024, 2025, for all we know.

Chris: Well, go on. Do you have any questions, Brent? So one of the things, I mean, you talk about interest rate as one of the components, and you just mentioned inflation. I'm like a broken record when I'm sitting here with our clients running the overhead expenses and looking at what that is as a category expense. I keep seeing, I keep coming up with a number closer to 19 or 20%, not 8.5. Talk about that a little bit. I mean, how, how far can this go in your opinion? I mean, we're— I mean, this is nuts. I mean, this is, this is extreme inflation, and energy is driving everything, right? Energy is connected to everything.

Jarod

Creed: I'm obviously no financial interest rate expert. I'm no energy expert. Not an expert really in anything for that matter. But why we got Brent here, a tremendous amount of truth to energy prices, specifically diesel, that is not helping anything in our economy right now. Uh, you can read articles about, you know, the U.S. economy is built on just-in-time supply, and when you are seeing elevated expense to transport goods from point A to point B, the consumer ultimately pays. They're gonna pay for that. What was the announcement from, uh, you know, the king Amazon this week? They're going to charge sellers a 5% hike. That's going to get passed to the consumer, I guarantee you. You know, the, the seller of that product through an Amazon Prime website is not going to just absorb that 5% price hike, or expense I should say.

So the, the turn of interest rates and how much higher can inflation go, my personal opinion, let me stress personal opinion, is that I think the Fed is scared of their own shadow. I think your administration, uh, let's just say DC in general, for years is always after the vote first, and they want to be careful to turn a tide against them very quickly. We are still, you know, to put a little plug in for the US, we're still in a heck of a lot better shape than plenty of other countries. In the world that we're in right now, uh, there's legitimate concern about starvation issues in parts of North Africa and perhaps Middle East and such. Uh, we don't have that right now. I don't think we'll let it happen in the U.S. either. And, you know, there's plenty of chatter of just the banks will eventually have to stop printing money.

Do we raise rates high enough, fast enough to put a huge scare in the marketplace that impacts ultimately the commodity that the farmer raises, or do we go about it very methodically that it just happens without us ever feeling the ramifications of it? I'm more on the former than the latter. Just at some point things just feel like they're gonna have to unravel for a period of time. Not calling for a 2008 type of a deal, you know, housing does have some concerns, you know, that obviously led the 2008 situation. But $100-plus crude, gasoline prices, grocery prices, interest rates going up, and the U.S. consumer being faced with what you were just talking about, you know, close to 20% inflation, that doesn't, that doesn't have the ability to stay that way forever.

Brent: I got two questions on the grain markets right now, Jared. One short term, um, you know, we got right now the Russia-Ukraine is obviously affecting plantings in Ukraine. There's some talk about China and maybe the lockdown might hurt their planting. Um, are we going to see a price here in the near future where we're going to start to ration demand? We really haven't seen it yet, but can we get to a point here short term where we could start pulling back demand pretty strong?

Jarod

Creed: It's too late to identify when we start rationing demand. I don't know, let me reword that. You find out you're rationing demand after the fact. And it does not appear that we've done that yet. We've put the pinch on some folks.

Chris: There's supply concern, right?

Jarod

Creed: There's, there's a supply concern. And I think right now there's been enough desire to get physical ownership of the commodity in the uncertain and unknown times that we have that nobody has said, no, I'm not going to buy it yet because it's too expensive. That can certainly happen domestically from domestic, you know, grind and ethanol and such, or even in the meat market. But we're not there yet. And I want to be careful to the idea that we're going to go to a price point to actually ration demand, and that's what stalls out the higher markets that we're in right now. I think there is still a tremendous amount of money in the sidelines, but it's not in the everyday consumer's pocket. Okay, so, so I guess I didn't really answer your question, so I apologize.

In the short term, no, I don't think we're going to find any type of a demand ration because we are 5 months away from being on the doorstep of the largest corn-producing country in the world, being the U.S. Replenishing that supply. We are 60 days away from a U.S. wheat harvest. We're obviously same time frame away from harvesting a soybean crop relative to the corn crop. We're gonna put some more supply back on the pipeline just like we always do. It's just a matter of getting between now and then if we're really going to hurt demand enough to matter.

Brent: Okay, and then let's go on the middle term. I'm, I'm pretty optimistic, guy. We're gonna get the crop planted. So we're sitting here May 15th, the Corn Belt's pretty well planted. What could happen between May 15th and July 4th when pollination starts? We start talking about weather again. We got about a 6-week period there. Can anything happen in that 6-week period we need to be worried about right now?

Jarod

Creed: I don't think— my personal opinion again— I don't think we can suck a lot of premium out of this market until we get closer to pollination. I think it's known that we're not going to be able to plant too much of anything, so that takes that risk off the table. And you're not going to take out whatever premium may be in the market today from a production standpoint until we get closer to pollination. So that comes with fireworks. Years ago, you were always nervous over a 3-day July 4th weekend to see what that weather forecast looked to be and what its impact on the markets was going to be. Now we're looking at that as early as June 10th, June 15th. It seems the important date right now is somewhere right around May 10th. Historically speaking, if we are at least 50% planted on May 10th, it has led to above-trend yields nationally. If we're not, it leads to below-trend yields.

The U.S. farmer has a tremendous amount of capacity and speed to plant a corn, a soybean crop. I'm a little bit of an optimist too, and I will be a naysayer to the idea that we can't get the work done. A handful of years ago, we planted 40-some percent of a crop in one week. So at today's prices, at today's margin opportunities, I think the acres will get planted unless Mother Nature has the absolute final say. We've seen the U.S. farmer go with gusto all the way to the middle of June before. It's a long ways out still. We're what, 20-some days out from May 10th still. A lot of stuff can get done in a one-week time frame, and perhaps right now looking at forecast, maybe that is the last week of April, first week of May.

Chris: Is there some weather, like, market already pre-built into this thing? You know, I mean, it's hard to know what's going on anymore. There's so much stuff happening, but it's almost like there's an anticipatory weather, you know, because we can't, we can't tolerate it.

Jarod

Creed: This is a pure guess. I'm gonna guess there is some, but not near as much as what we've seen in years past. And a lot of that is just because of the volatile up and down price action that we've had. It's pushed a lot of legacy players in the grain complex to the sideline, not wanting to leverage capital, not wanting to put risk on. It's more of a risk-off environment, which oftentimes is translated— risk-off is that, hey, we're going to go to lower prices. No, right now risk-off is that I don't want to go leverage any money in the market because of the uncertainties. And I'm not going to go off on a tangent, but a tremendous amount of, you know, computer-based type of algorithm trade going up and down, up and down, up and down with a lack of liquidity.

Chris: Yeah, and you brought that up offline earlier too when we were talking offline, is the computers are doing a lot of this, right? I mean, they're driving—

Jarod

Creed: yeah, the biggest player in the market is the farmer. The commercial more or less being a reflection of the farmer as well. But over the last couple months, you've seen the commercial long and short just continue to step away. They don't have the interest in being in a marketplace, and quite frankly, I don't blame them. Yeah, I mean, it's like you get the jitters. It's, it's just— think about the psychology of this. How dumb is it that you're nervous to sell $7, $8 corn? How dumb is it you're nervous to sell $15 beans and $12 wheat? That's the human emotion struggle out of it all, knowing that there's probably not a huge liquidity behind that decision from your legacy player. Once again, of supply and demand fundamentals, right now you have a tremendous amount of speed and You know, one, maybe this is a good way to show an example. This has been probably a month ago.

The wheat market, when it was locked limit higher, had 5 times the amount bid on the market than what the US raises for wheat. 5 times. Hmm. And it might even be more than 5 times. It might have been 50 times. I can't remember. It was a huge number. That type of stuff right there is, is, it's not, it's not, uh, thousands of people lining up to bid something at limit up. That's a computer. That's an algo. I'm not complaining about them. They'll give us opportunities, but it's just awfully dicey.

Chris: Yeah.

Jarod

Creed: And you got to expect a lot of choppy price action, low liquidity, a lot of crazy open moves at 7 PM at night and 7:40 or 8:30 in the morning. And that's happening in more than just the grain markets as well.

Chris: I want to shift gears a little bit to sales, '22 sales. We talked a little bit offline about HTAs. You had made a comment to me and just kind of watching what this market's doing here. We have a lot of clients, and I know there's some listeners out here that have HTAs on, and you had made a comment to me on some things to kind of watch from a practical perspective and be careful of. You want to talk a bit about that?

Jarod

Creed: Sure. If we stay in a tight supply, high demand driven market, you run the risk of seeing a cash inverse from more or less day one on a combine all the way through the time frame that you start planting the year following crop. And we've spent the better part of the last 6 months in an inverse with the exception of a couple weeks. The inverse's job is to get the farmer to move the crop in a very short time frame. And I apologize if we talked about this last time I was on with you, but it's impossible for a segment of producers to move the entire crop in a 30 to 60 day window. Yep, logistically just impossible. But the market's begging for it. The market gets its fill and then it's down to the next area that they need it, and then rinse and repeat, rinse and repeat.

Versus the quote-unquote easier but arguably less financially rewarding to the farmer is when the market doesn't want it in a spot and it's going to pay you to keep it in a bin for a while, locking in a carry. We're an exact opposite right now. That it does concern me that too much basis exposure, too much spread exposure between such as Dec-March, Dec-May July. Right now all of those are basically even money for this next year. Uh, I look at a group of producers and say, oh my gosh, what's that look like telling you from September 15th when you perhaps start harvest, or October 1st to the last bushel that leaves, you are hauling non-stop every single day that you can get dumped somewhere. Because anything that's not shipped is just taking on an assumption that it will get better later on a curve. You're being paid now to do it versus assuming that you can get this price later.

Chris: Gotcha.

Jarod

Creed: Does that make sense? I'm answering your question there. I just, I just think a producer does need to be careful on harvest delivery needs versus post-harvest delivery needs. Maybe this is a little bit of a time to get back to the simple blocking and tackling for some operations, just back to just straight cash type of sales. The last sales that we've been making here lately it just been cash sales. And it's kind of, uh, I'll probably put my foot in my mouth for saying this, but it seems a little silly to be trying to manage a basis gain when you're talking $6.50 to $7 cash corn in the first place, right? Yeah, yeah, it's a risk-reward really there.

Chris: Yeah, it's not nearly the percentage that it is when you get $3.50 corn or whatever, so I got another question, and then, and Brent, you can tag in on this one too, but land. And we talked about inflation, we talked about interest rates, but I want to circle back to land for a minute. And it's a little off the absolute topic of marketing, but it is and it isn't, because there's a lot of producers out there that have improved working capital positions. You know, there's a lot of operations out there that have looked at land and are probably still looking at it and thinking about, okay, when's the time to buy and interest rates are going up and I'm sitting here with a little bit more cash.

And then you see some of these farms sell, and we had some in Iowa here in the last month or so, and maybe you know of some specific ones, Brent, but I know there's been some over $20,000 an acre sales. And, um, you know, and, and it's just amazing what we're seeing for these land values and what some of the stuff's going for. Any, any, um, take or any thoughts on land values from either of you guys, or any thoughts or anything that we should just talk about a little bit?

Jarod

Creed: One thing that I'm gonna keep reminding myself: Northwest Iowa does not represent the rest of the Corn Belt. That manure has apparently been gold. And you think about, you know, in Sioux County, for example, of number one county for cattle, and the next county is like half that of it. Uh, and number one in hogs. That's where all the highest priced land has been trading. Yes, there has been some other high-priced land in different areas, but that's been the most consistent hotspot where you're seeing a fair discrepancy elsewhere here lately, in my opinion, of some fair value buys, it appears, and some still pretty darn high stuff. But the takeaway is that the cash is is still out there and the cash is arguably getting a little bit better right now and perhaps a chase before the cost to borrow money goes up.

I mean, I don't know if there's a perfect answer to all that, but maybe it's been a little easier to buy higher-priced farm ground in the last 18 months because of outside of agriculture influences.

Brent: Well, and if you're a really a true farmer from from the bone out, you want to own land. That's one of the best investments there is. We talked off, offline here a little bit about where to put some money, and there's some other places to put it. But long term, if you're going to be a farmer and you're in it for the long haul, land's probably the thing that's made you the most money the last 30 years. Has for me.

Chris: Yeah. Well, it's just interesting. I just thought I'd bring that up because, you know, and nobody wants to, to make any predictions either, right?

Jarod

Creed: Because Maybe the one other piece to mention on that, I think a lot of focus has been on a purchase price. Yeah, the— and we're caught in the here and now. What does rent do in the next 24 months if we all of a sudden do turn around sometime the next 24 months? We damn well know that we're not going to go from $300, $400 type of rent stuff back to $200, $250 if that's what's a necessity. That it's not all rosy. Even if you're a producer with owned land and the other 50% is rented, that rented ground can kick your butt in a hurry if not at least, uh, prepared for the what-if.

And I don't know if I have a perfect answer how to necessarily address that right now, but it's more about having a little bit of a sense of awareness that that's probably— fertilizer and land, in my opinion, is the number one and number two thing that's going to cost money negatively in the next 24 to 36 months. I don't think it's necessarily equipment. I think it's those two pieces.

Chris: Well, and when we look at it, what we've seen— I, I went back and looked at, at 2012 just to kind of see, okay, how long did it take us to create equilibrium again on the input side to the, you know, to the income side?

Jarod

Creed: And 2015.

Chris: Well, yeah, and it did for the land. I mean, it looked like to me though, the, the, the fertilizer came back way faster than the land did. I mean, the land took about 3 years to get back to somewhat of an equilibrium, and it still stayed more elevated than what it was prior, the land did, whereas the fertilizer actually came back to a better equilibrium. So I don't know if you have any comments on that, but that's just kind of what, you know, going back at 2012 and looking at that from our client base, it looked like whether that happens again now or not is anyone's guess. But the problem is, is the rents go up way, way too fast and come down way too slow.

Jarod

Creed: The old saying of high prices cure high prices— to take that a step further, the high prices that we have today aren't going to be just gone instantaneously overnight, in my opinion. We're not going to go from $15 beans to $8 beans. We're not going to go from $7.50, $8 corn to $4 corn in a month or two time span. I don't think— if it does, we all have bigger issues. So, but my point there is that the drop-off in fertilizer that we saw that still took a couple years back then and still move faster is because we're not going to dig ourselves out of a supply hole in one year. It is going to be a couple-year type of a deal, and it's just making sure that on that potential slide, as we restock the world with food, that the demand for that is going to soften. People are going to be more comfortable.

The risk-off is created, but the raw products we buy to produce the raw products we sell are going to be a lot stickier.

Chris: So let me roll over to '23 for a minute, and Brent, you throw questions on this if you want to also. But, you know, what if— get to the practical stuff for a minute here. You know, you, you mentioned some, some pretty strong price levels for '23 already, and I, I have an idea of what your thoughts are here, but I want to hear you verbalize it.

Jarod

Creed: What the market will give you. Yeah. So, and I think that might just be as simple as— and I'm guilty that some producers, I know it will make them money. Some producers, it is questionable. Some producers wouldn't be able to stomach it. It is a mix of different things there. I think there's one piece to keep in mind of prior inverses of new crop to new crop, as in like 2012 to 2013 corn, right? 2008 to 2009, those type of situations at least have to be identified to know that those prices were the best that we had the chance to forward market. When you get to 2023, I'm not so sure that the idea— not advice, but the idea— is to just start taking 1% increments of your crop and start layering in orders. Maybe it's more, maybe it's less.

I don't know exactly what that is, but if I'm gonna scale up sell from where we're at today, roughly $6.60 to $8, a $1.40 rally, and I'm doing it in dime increments. That means I'm selling 14 times, and if I do that 2% a pop, I've got almost 30% of my 2023 corn sold at an average of $7.30. If I can't make money at $7.30 futures for 2023, again, I don't know what world we're living in.

Chris: Yeah, so another thing we talked about offline a little bit was the corn versus soybean discussion in, in this year, and that, that ties into '23 a little bit as well. And it also ties into— we, we've been having some conversations around margin protection. Last time you were on, you had made comments on margin protection. A lot of people didn't didn't buy margin protection this year. There's parts of the country that can't buy it. There's people listening to this, it's not even an option to buy it in certain counties, certain states. With that said though, you know, any comments on that you want to make on margin protection, on, you know, just that risk mitigation as we move forward, you know, in general, um, you know, any comments on, on risk, risk management as it relates to margin protection for those who have that as an option?

Jarod

Creed: Permission to speak freely without cursing.

Chris: Yes, well, you can curse too. I won't curse, but you can.

Jarod

Creed: Let's just— I'm just not going to beat around the bush.

Chris: Good.

Jarod

Creed: If you ask an insurance agent, your insurance agent, to explain margin protection to you and they don't know what it is, why are you going to an equipment dealer to buy a piece of equipment from somebody that can't tell you what it's supposed to do? Why are you buying a life insurance policy if you don't know what it's supposed to do? Why are you buying a product from somebody that doesn't know what the number 2 most subsidized program in all the US is? Back to the producer. I don't know, a little maybe, maybe too vague. If your insurance agent doesn't know what the hell margin protection is, go find a new agent. Find somebody that can at bare minimum explain it to you. Because it is probably— even if you're not going to use it for corn, soybeans for 2023, you have to educate yourself on what your opportunity is. You educate yourself on all these different types of seeds.

You educate yourself on different strip till, you know, minimum tillage, no-till, whatever it may be. You educate yourself on all that. Why, why in the world am I just going to say, nope, my agent A didn't tell me about it, B says no, you don't want it without explaining it to me, or worst case says I don't know what what it is. That's just—

Chris: and that's—

Jarod

Creed: we're running the business.

Chris: Why? There's a lot of that is the problem, right? So, so many people that don't know.

Jarod

Creed: Off my soapbox, my, uh, maybe the takeaway, Chris, is just it's time to start researching that for 2023. Anybody that's using it this year, uh, we've got another couple weeks left in the insurance averaging period for the inputs. Uh, it looks like most counties call it 105 to 107% type of yield requirement. Uh, that's pretty hefty. A lot of counties would still be talking about a record yield at that point. Um, but for 2023, you know, we were walking through some math here locally in Buchanan County, Iowa, that a— just as an example, if we had a $6.60 margin protection price for the 2023 corn crop, and corn just happened to be, as an example, down to $4.50 in the fall of 2023, the county would have to yield 280-some bushel an acre, which is probably 60 bushel higher than it's going to raise in this next decade, right?

So some— a tremendous potential tool, and quite frankly, the cheapest tool. It's expensive, don't get me wrong, but the cheapest tool in the toolbox to protect price, yield, and inputs that can be viewed as a marketing tool in replacement of plenty of other things that are in the toolbox. It might not be a good fit for you, but get educated on it.

Chris: Yeah, and that's probably something— not, not for this time, but we probably need to corner you sometime and maybe do a little education just on a podcast on that. Because I know, I mean, Brent, you, you've got margin protection in this year. We've got it. Thanks to you, Jared, you've educated a lot of us on it, and that's probably something we need to do in another podcast. But I like what you said, and that's probably the best advice we can give people is get a hold of your insurance agent, have the conversation, and if they don't know what it is, find somebody that does and find somebody that can explain it to you. Yep.

Brent: So I think, I think the term itself is what scares farmers, you know.

Chris: It's, it's crop insurance, and it's the cost too, right? It's like, I'm not going to spend that much per acre, but what is it per bushel? And it's, and it's not just it's not just covering price, it's not just covering yield, it's covering margin, right? You know, it's, it's, it's a whole different tool that's— that I think a lot of people don't know enough about.

Jarod

Creed: That, like Brent said, the term insurance scares people. There is a thing as insurance, poor, I get it, but I don't view this as insurance. I view it as a marketing tool. And again, I'm going to stress, it's not for everybody, right? But you have to— it's such a viable option in today's marketplace that I would have killed to have this from the 2008 to 2013 stretch, right? It would have been— and the government might have actually disbanded a program if they had it at that point because it would have been an enormous— it would have been big for the farmer, yeah, to protect them. I'm not talking about, hey, we want to sign up for this insurance program that's going to guarantee me a payment. You don't want an insurance payment, right? You don't want to collect health insurance if you lose an arm. Right.

But this is a tool to make sure that no matter what comes our way over the next 12, 24 months, you're going to take a step forward no matter what. That's what's most important.

Chris: Yeah. If somebody wants to get a hold of you to ask some questions, do you mind throwing a good way to get a hold of you?

Jarod

Creed: Old-fashioned. Just give me a call or text, area code 402-680-1744. And I did forget, you asked me something else right there ahead of margin projection and I forgot. Well, just We were just talking, touch base on it.

Chris: I don't know, I think we're— I don't remember now. We, uh, we were just kind of talking about pricing for '23 and just protecting the risk going into '23, I guess, was the main thing. So, but that's all right. Well, you're going to be on again. Oh, you think Acres?

Jarod

Creed: Oh yeah, yeah, yeah, just— yeah, sorry, that's all right. Another soapbox, how about that?

Chris: Yep, do a quick one.

Jarod

Creed: Please do math on your decisions. If you are non— if you do not have an agronomic necessity to plant beans and you're planting beans just because you think the fertilizer costs are too high, no, stop it. It's— do just do the math, right? And again, that might be a deal where, hey, sit down with your crop insurance agent. If they agree with you that, uh, or they make the comment that your fertilizer is too expensive, it doesn't make sense, you should plant beans. Mm, strike two. Talk to your grain buyer, talk about what your revenue differences are, corn and beans. Look at your worst-case scenarios on crop insurance. Within the group of producers we work with, we've switched a tremendous amount of acres since the March 31st report. The ratio is at the lowest it's ever been post the ethanol boom going into planting.

Chris: Well, you switched some of our acres today.

Jarod

Creed: That's true. Look, The market's begging for the corn, absent of the conversation that fertilizer's high. It looks like the fertilizer supply is there, gotta double-check that.

Chris: But the listener says, but my, but my sales on my soybeans just went up, my percent sold on my soybeans just went up.

Jarod

Creed: And right, so you want to trip over a $250 bill per acre? No, that'd be your average Midwest guy. So here's, here'll be my closing comment on that. Um, I almost feel like a little bit of a Dr. Phil approach to some of the farmers that we work with. So I just want you to think about this: how many more years you want to farm? 10? 15? Okay, you want to farm 10 more years? Uh, you don't have another 100 chances at this. They make chemical, fertilizer, seed, all this powerful equipment for a reason, so you can adapt on the fly. And that's one of the most beneficial, um, uh, tendencies of the U.S. farmer, able to adapt on the fly. And right now it's screaming an opportunity for a Midwest farmer. I don't care, North Dakota, South Dakota, Nebraska, Kansas, Missouri, Iowa, Minnesota, Illinois, Indiana, Ohio, Michigan, at least in those parts of the U.S., please do the math.

Don't make the assumption that you're planting beans just because corn is too expensive. You don't have another 100 chances at this. If you're going to farm for another 10 or 15 years, it might just be one of the bigger, better, successful decisions you've ever made.

Chris: I'd echo what you're saying based on what we're seeing. There are exceptions, there are some agronomic exceptions, and there are some exceptions because of crop rotation either the prior year, this year, or the next year, and some, some off deals or whatever. But I would agree high percentage of the listeners are— need to do the math again.

Jarod

Creed: And maybe the one most important piece, if you're going to make the switch, you make the sale, make the sale to lock in that switch. Locking in a spread difference. Don't just do it just because of anticipation what the market may do.

Chris: Yeah, and that— and people have been guilty of that before, you know. You— well, I'm going to switch to— from this crop to this crop, and then you don't make the sale. And well, why in the heck did you switch then if you didn't, didn't follow through? Do the whole piece, right? So anything to wrap up with, Brent?

Brent: Uh, nope. I just hope I get in the field soon so I get this crop planted.

Chris: Yeah, yeah, we will eventually. And, uh, really appreciate you being here, Brent. Thank you. And, and again, thanks, Jared. And if, if, uh, people want to get a hold of you, you might get some phone calls now, some questions probably. That'll work. All right, well, thanks again, guys, for being here, and thanks everybody for listening, and we will catch Catch you again next time on the iViewPic.