Goodbye February...

The photo is water damage in our basement, my office, from the rainfall received in mid-January. A personal dwelling policy covers ‘clean water’ damage, water from w/in the dwelling; a dwelling policy does not cover ‘brown’ water or water from outside the structure. Only a flood policy would cover this damage and flood policies typically have a waiting period before they become effective. Lesson here, make sure all piping attached to the rain gutter downspouts designed to carry away from structure are connected! Thankfully, the damage wasn't worse...

2019 spring prices – RMA has released the 2019 projected revenue prices only for dry pea types at this time. RMA has not yet released the 2019 projected harvest revenue prices for other spring crops (barley, canola, corn & soybeans). The chart below captures the average prices for the discovery period of these crops, I don’t anticipate a significant variance from the average to official prices when released. I’ve also included last fall’s announced prices (canola & wheat) for your reference as well. The far right column is the volatility factor; this value measures the price fluctuation of the past 5 trading days, and has a direct impact on the premium for the crop year. Please let us know if you have any questions regarding.

Non-Revenue Type Dry Peas:

Oregon Dry Pea Prices (APH):

3/15/2019 – Sales closing date for spring crops is at hand. As is the case with all sales closing dates, any and all changes must be completed by this date, which is a week from Friday. Changes include coverage level, plan of insurance, entity changes (adding or deleting members), etc. If you have any questions or concerns pertaining to this, please don’t hesitate to contact us.

Fertilizer –

• A formula for predicting fertilizer pricing…you tell me if it’s accurate or not.
• If you’ve not heard Cat Salois’ presentation at this winter’s grower meetings regarding this nutrient, here’s an appetizer of topic – zinc is necessary for plant health and optimum yields.
• An article regarding the global nitrogen market...6 factors to watch in 2019
• And a story on phosphate and potash...outlook for 2019
• Lastly, an article pertaining to the 4r’s for wheat...N use efficiency helps evaluate 4R practices in Wheat

Glyphosate – The ongoing debate about this acid causing cancer has more results indicating it is NOT carcinogenic…

Greenhouse gases – A recent EAT-Lancet study and the proposed Green New Deal are concerning, but should be viewed with skepticism according to Frank Mitloehner, an air quality specialist at the University of California-Davis.

Herbicide resistance – At the recently completed winter grower meetings, The McGregor Company’s very own Bruce Palmer tackled this topic again…here’s some generic information on the same subject matter.

And along these lines, Mr. Palmer suggested practices to prevent resistance…if you missed it, you can follow their lead here

Income taxes – The IRS has extended 3/1 filing deadline until 4/15.

Livestock losses – If you’ve incurred any livestock losses due to weather, you may qualify for Livestock Indemnity Program (LIP). Application must occur w/in 30 days of loss and documentation must be provided, dated photos would suffice. Please contact your local FSA office for details and application procedures.

Markets –

• ASF – African Swine Fever has been confirmed in two additional provinces in Vietnam, four provinces total. Reports from China in January were that more than one million animals have been infected and destroyed in China. Analysts suggest this is likened the accuracy of Chinese reporting to that of an iceberg (visible) – 90% of the iceberg is unseen (unreported). USDA estimates a vaccine for this disease is at least a decade away.
• Corn & beans – USDA is forecasting more acres of corn and fewer bean acres to be planted this spring. Given the amount of moisture received last fall across the corn belt, which delayed harvest and virtually all fall field work, accomplishing this will be difficult. Many areas are now expecting flooding to occur this spring as well – areas of the Mississippi and Ohio rivers currently have shipping restrictions due flooding and high water levels. There will not be an early spring, as the grips of winter remain across the majority of the country. Corn demand is strong and supplies are short; we’ve had four years of yields above trendline, yet our inventory levels are just above the levels after the drought of 2012…who recalls those prices? Current prices do not reflect world demand, inventory and usage.
• Beans will be overly abundant for the foreseeable future. The US has missed out on supplying the Chinese market now that new crop South American bean are in the pipeline. Soybeans pricing suffers on two fronts, China and nearly 1 billion bushels in US supplies. Chinese demand is down significantly due to the infestation of ASF in that country’s hog industry. Given these negatives, beans will be planted again this spring because of economics – corn input costs are significantly higher this year than last, and the delayed spring will reduce early planted corn acres. Depending on how long the deep freeze grips the northern plains, bean acres may replace spring wheat for the same reasons as with corn.

Conflicting stories regarding the US farm economy - Economists say things aren’t that bad, the other reports that delinquencies are at a nine year high. Can it be both?

Livestock – The annual cattle inventory report found slightly more animals than last year at 94.8 million head. The 2018 calf crop was up 2% at 36.4 million head. US producers are already losing market access due to reduced tariffs produced by TPP. Grains and particularly wheat is on deck.

US Treasuries – 3 year low on sales, is a rate reduction on the horizon?

Wheat – Calling the February markets ugly would be a glamorizing the adjective. Significant losses for both Chicago ($.64) and Kansas City ($.58) markets occurred, whereas Minneapolis was off only $.03. Given the winter weather for the predominately growing region of hard red spring wheat, the Minneapolis market will continue to trade differently than the other boards – there will not be an early spring given the depth of frost and snow across the northern plains. Here’s the short-term for Bismarck…

WTO – A ruling was handed down on Thursday confirming the long held US allegations that the Chinese government was excessively supporting their farm producers.

Senior living – The ten riskiest states for senior living according to TheSeniorList.com were identified according to 5 matrix. Not to split hairs here, but when did Washington DC become a state? My geography class identified the US with fifty states and the District of Columbia…just sayin’

Worms making water out of poop – Regardless of your take on the subject matter, one must admit this is a pretty cool step in technology.

Weather – The forecast maps for next week don’t support an early end to cold temperatures.

WOTUS – Lines are drawn; those opposed and supporting are taking their respected positions.

Worker Protection Standards – We’re in the planning stages of providing training to get those interested EPA approved. Please advise accordingly so we know who and where – coordinate with your account managers or with us in the absence of an account manager.

Until next time, stay warm…

“A dream doesn’t become reality through magic; it takes sweat, determination and hard work.” ~Colin Powell

Curtis Evanenko   @mcgregor_risk
cevanenko@mcgregorrisk.com
mobile – 509.540.2632

Posted in Risk Management; Posted March 07, 2019 by Curtis Evanenko