Episode Transcript
[00:00:00] Speaker A: How do you call a top in the cattle market? It's been a bright spot here the last number of months. Well, a number of years, but last number of months while we go through all this tariff stuff, cattle prices have been phenomenal. Margins, fantastic. How do you call a top in this market? What's going to change this upward trajectory that we've been on? Let's find out in episode number 70 of the what the Futures podcast.
Hey folks, welcome to the what the Futures podcast where we complex market trends into simple, actionable advice. It's your quick guide to better farming decisions.
All right, folks, welcome into episode number 70 of the what the Futures podcast. Of course, recorded in the UPL studio each and every week. And I think I know you guys are having some fun here with our Akito promotion. Fantastic product from UPL that you can use on those Barley Acres wheat. I think Durham was even in the mix there as well. Go to our social media, check it out. Very easy way to win yourself. A little bit of product from upl, a little bit of a keto and hey, some beer for me as well from the what the Futures podcast. Check it out on Instagram X. You'll find it. I want to do some housekeeping. We're going to bring in Ryan Copperthorne with cows and control this market. Cattle market's been phenomenal. I'm going to also talk to Cody Bills from FBN Market Advisory and Brokerage. They did a heck of a job with their survey here with US Acres. I also want to just take a few minutes to do some housekeeping. I want to thank all the new farms that joined the Lunchbox crew. Farms from Manitoba, Saskatchewan and Alberta. Even some old faces coming back into the fold here as well. So we did close the books the Lunchbox Crew earlier this week and I just want to welcome all those new members.
Lots going on here at what the Futures. We just keep rolling and we got something else. Something else really cool and close to my heart here when it comes to a good cause. I'm getting to be known here for some of the hats that I, that I sport. I wonder if I could see any actually nearby hat inventories in the other garage at the moment. But I've been teamed up with a company in, in Hawaii of all places for these wonderful hats that I guess it's been about. It'll be two years here where I, I stumbled upon these but a great company and we were doing this cool thing here where you the. The listener, maybe it's your kids or grandkids but somebody that you know is going to design a hat. We are going to get hundreds of these printed. We are going to, I don't think sell them is the right way. It's a donation. We're going to collect some funds here at Egg in Motion. So that's where you're going to be able to access the hat. And all the funds that we, that we bring in, those are going to go to the Canadian Centre for Agricultural well Being. Of course, that's helping out farms, Canadian farmers, supporting mental health initiatives. And I'm super excited. You go to the website ryandini ca and that's where you can get the details. It's called hat contest. You can't miss it. And we want kids, if you know anybody in 4H in school, you want to put, get some schools involved here, some of your kids design a hat. We're going to put them up to vote. We're going to pick a winner and then we're going to get a bunch of these made. Sell them or buy donation, I guess at Egg in Motion. If you're a company and you, you want to participate, you know, from a corporate perspective, we can do a bulk order for you as well. But all the funds raised are going to go to the ccaw. Again, that's the Canadian center for Agricultural well Being. We're going to raise a pile of money for those folks. Of course they have that wellness line, the crisis line, 1-866-FARMS. That's Farms01. Again, that's where you call the crisis line to help, you know, farms in need. I had Dr. Brianna Hagan on last week. This is just a key access here, especially while we go through all the stuff that's happening in Canadian agriculture right now. Okay, so we'll talk more about the hat contest. It does just run here for the month of April. So you gotta draw them up. You can draw it, you can submit a picture, you can, you know, send us in your ideas again, head to the website ryandani ca. Let's get some hat designs going, folks, and let's raise some money here for the ccaw. All right, what else do I have here? We, we are going to do what the future's hockey pool, playoff hockey pool as well. So keep your eyes open for that on social media. But yeah, let's, let's get into, into this week's episode. Here again, Ryan Copperthorne with Cows and Control. Cody Bills with FBN Market Advisory and Brokerage. Also, folks, I'm gonna just, I'm gonna reference something from the conference this last December, and I want you to hear it. It played a key role over the last couple weeks in good crop marketing decisions. So let's get into it.
All right, folks, Joining me here in episode 70 of the what the Futures? Podcast is my good friend Cody Bills. Cody, how's it going, man?
[00:05:49] Speaker B: It's going well, Ryan. It's good. Good to see your face. Usually we're chatting over the phone and it feels like old times.
[00:05:58] Speaker A: Podcast debut. Cody, for on the what the Futures podcast. I know you've done many other shows, but first time on what the Futures.
[00:06:06] Speaker B: First time on the big stage. You know, been in the minor leagues most of my life, and here we are swinging in the majors.
[00:06:13] Speaker A: I just heard you on Market Talk the other day, pal. So you're the. You're back in. This isn't even like AAA ball we're playing today. That was big leagues. This is like, I don't know, a. I don't know, Little league. I don't know what it is.
[00:06:26] Speaker B: But anyway, yeah, I'm excited. I'm happy to. Happy to join you today and kind of talk a little bit about the FBN acreage survey, which. It's always my favorite time of the year. It's so, it's so cool because really, it's just participants from FBN that. That reply to a survey. It's a simple survey. It takes less than three minutes.
[00:06:50] Speaker A: Yeah.
[00:06:51] Speaker B: We got a great data science team that consolidates the results and says, hey, this is what you told us over the last five years. We've done this for five years now.
[00:07:01] Speaker A: It's okay. I thought it was even longer, but, yeah, five years sounds. Sounds right.
[00:07:04] Speaker B: Yeah, five years maybe where we were really promoting it. I don't know if we did it longer, but five years where we were in the public space and we've just really performed well. It's done a great job. And this year, man, I, I don't want to say we nailed it, but it was so close. Yeah, we had 95 and a half million acres that our, our forecast was for 95 and a half, and the USDA came out at 90 or 5.326 acres. So we were 174, nailing it off. And then for beans, we were 5,000 acres off. Like, that's.
[00:07:40] Speaker A: That's incredible. So I saw you, or I was listening to you on the other show last week, and then, of course, the numbers came out here. Was that this week? Was it Monday that the numbers came out? Wow. I feel like I've lived a whole other week already. But yeah, and so I, I saw the numbers come out and I was like, they nailed it. Like they absolutely nailed it. And even on some of the smaller acre crops, like the ones that matter for us in Canada, like your report had spring spring wheat acres on the decline. I believe from what I saw, yeah.
[00:08:15] Speaker B: Our spring wheat acres, we had had them pegged at 10.4, so we were expecting a decline of 200,000 acres. And yeah, USDA came out with 10.02. Yep. So we saw, you know, nearly 600,000 acre decline. So we're directionally correct, but not to the same magnitude. And just like as a disclaimer, it's, it's harder. So I always view this acreage report as a really a corn and soybean report. Yeah, that's where I mean, we had almost 1,000 farmers that responded and the vast majority of them have corn acres and they transition their crops into other things, in and out of other things. And so, sure, having all these crops listed is important for us to understand the movement in corn and soybeans, but it ultimately means that we have lower confidence in our forecasts for winter wheat, spring wheat, Durham cotton and sorghum. So we don't look at those numbers and say like, oh, we think the USDA is going to say this for spring wheat. We say, hey, this is based on the information that we have, but it's low confidence because we don't have a good distribution of survey respondents for that commodity.
[00:09:35] Speaker A: Yeah, fair enough. So, you know, I got to ask, you have all these survey results that, that come in and I don't know if I'm allowed to ask this, Cody, but is there any where you just sit there and you're like, wait a second, this guy's telling us there's like a thousand acres of pineapples on his farm.
[00:09:52] Speaker B: Like, where are you talking about bad actors?
[00:09:54] Speaker C: People are trying to mess with us.
[00:09:56] Speaker A: Yeah, yeah, yeah. Does that ever happen?
[00:09:58] Speaker B: Yeah, I don't, you know, I can't imagine that it would have ever happened before. But no, we, absolutely, we see that, you know, people respond, they put in bogus info. It doesn't match anything. And I think that's one of the cool things about our survey is that this is a member based survey and you put your information in and over the years, you know, you can, you can understand the people that are participating, that are, that are truly responding in good faith and you can see people that, that, you know, they put their information in, but nothing makes sense. Nothing matches. You know, totally random character out of the blue. Yeah, stuff like that gets dropped. And I think that's again the value of getting something like this from FBN than from, you know, I mean when you look at the survey of analyst estimates, There was like 22 analysts wild.
[00:10:55] Speaker A: Yeah.
[00:10:55] Speaker B: That, that reported their information to Thompson Reuters and, and we were in terms of absolute error. So like the difference between our, like where we were and where the USDA came out, we were the, the most accurate in this report. So. And I think that is the advantage is that this is network based. We've done it for five years and we're kind of get it building more and more accuracy as we go.
[00:11:22] Speaker A: So I have to ask for a follow up question. Like a thousand farmers or whatever it is. Like that's a lot of farmers. But yet like how, how do you go from that number? Because I don't know what that would represent for acres, but it ain't 95 million acres, dude. Like, so how do you go from like, all right, we got these guys, they're spread across, across the country. And now let's take that and zoop. Let's pull that up to a big number.
[00:11:51] Speaker B: Yeah, well, you know, without giving away the secret sauce, I think generally speaking we try and we try and hit the states, right. So like we get the survey responses, we look at it and we try and estimate the state first, then cumulatively bring it all together, look at the numbers, see if it makes sense. And there's, you know, there's some art to that because there's different things that you can do because you don't have a complete, you know, all respondents, all farmers aren't are applying to this. You're getting a little, a little bit. And so there is a little art to try and understand. How do you weight these like relative to location? Like you know, generally speaking where they, I mean not all growers in, you know, Montana are dealing with the same soil or the same production. So our data science team, they have a way of handling it. I don't exactly know all the ingredients that goes into it, but, but they've been pretty consistent over the last few reports and it's last two years been fantastic.
[00:12:53] Speaker A: Well, I want to, I want to add. So you, you've got your advisory clients, you have your brokerage clients. This report comes out, I think you were on the radio and on the shows. I don't know if that was Thursday or Friday last week.
[00:13:06] Speaker B: Was it Friday recorded on Thursday? Some of this. Yeah, played on Thursday, some of it played on Friday.
[00:13:12] Speaker A: So when did the. The brokerage and the advisory clients, like, when would they have seen that number? Was that a few days earlier than that or.
[00:13:20] Speaker B: So the first people that get to act on this, that get a report when it goes public.
[00:13:25] Speaker A: Yeah.
[00:13:26] Speaker B: Are the respondents, the people that participated in the survey. They see, it's like the whole thing is like, why do you want to share this information? And it's, well, if you share a little bit of your information, which has minimal value. Right. Like, I mean, I'm not saying that your information has, but like, hey, yeah, put it together. Y. Yeah, yeah, exactly. But when it is accumulated and, and put through kind of a rigorous statistical analysis.
[00:13:50] Speaker A: Yeah.
[00:13:51] Speaker B: It has real meaning. And we think that the people that should benefit from that first, they should get access to this first. It's gotta be the respondents. That's the, that's the whole reason why you do the survey. And we're hoping to grow that number every year. You know, we had. We. We grew it by like 50% compared to last year. And we intend to do. I would hope to do the same next year. And the more we grow it, the more we're going to have more confidence in the weed acres. And that's something I do care about. I want to get more accurate with those wheat acres and spring wheat.
[00:14:30] Speaker A: Yeah, no, that's awesome. All right. I think, like, these reports, like, so the, the USDA acreage number comes out and, you know, I would say that the, the, the response from the corn market and the soybean market was 95.
[00:14:47] Speaker B: Lame.
[00:14:48] Speaker A: Yeah. Yeah.
[00:14:50] Speaker B: And so that to me was a signal right away. It's like, all right, so. So on Wednesday, survey respondents received insight the report. You know, they received the report. Yep. On Thursday, FBN members that did not participate get the report and Bernoulli's. Tuesday, they get Tuesday, the recipients Wednesday, the FBN members Thursday, broad public. Hey, we're going to send this to everyone. So there's like a delay and this really is kind of a member value add. We're trying to say, hey, there's real value to being an FBN member.
[00:15:29] Speaker A: So. Yep.
[00:15:30] Speaker B: So that's kind of the delay now. It seemed like to start the week to Tuesday when that was released to. To the respondents, it just felt like the market was starting to slide. And, you know, it kind of continued really into the end of the week, just kind of slowly drifting lower for new crop corn. And, and so it almost. I mean, by Friday, everyone was talking about like, the acreage numbers and where the average analysts were. And it just felt like the way the report reacted, there's kind of two, two things that I'm thinking. One was kind of the Whisper number was 95 and a half and some people may have even had kind of a whisper number of the, hey, this could have been even bigger. And so when we didn't see something bigger, you know, people took some of the, the, the risk positions off, you know, the protective positions off. So that's one way of looking at it. My thoughts are like, hey, 95 and a half million acres or 95.326, that brings ending stocks, you know, over 2 billion bushels and stocks to use ratios up to 14. That's not super bullish, that's kind of nerve wracking. I would thought that we would have put push lower, but we didn't. Which tells me that, that people were prepared for that number and that we immediately pivot into a weather market and.
[00:17:06] Speaker A: We got to grow it now. Yeah, yeah.
[00:17:08] Speaker B: Weather market and policy, baby, it's dry here in the US So that could favor further increases in acres for corn. When, when people can get out in the field, they plant, they're going to plant early. Usually that's the tendencies of the past.
[00:17:22] Speaker A: Sure.
[00:17:23] Speaker B: So I think that this client, this, this weather situation is likely to promote further growth in the corn acre numbers. But there's also some concern about weather down in Brazil. I mean, they have a Safrina crop that is a large part of their production. Safrina corn crops. This is like their second crop.
And you know, the weather models are not showing abundant moisture past this week. And so now people are saying, okay, that's a big part of their production.
[00:17:55] Speaker A: Yeah.
[00:17:56] Speaker B: You know, what does this mean? We have tight ending stocks going into this thing.
Policy, which could kind of hammer short term demand. Who knows, I don't know.
It's up in the air. Yeah, there's just, there's bullish things tugging on this and there's some bearish things that are, that are weighing in.
And it just felt like people pivoted over to weather which is more uncertain. And the policy, I mean, here today.
[00:18:24] Speaker A: Exactly. Yeah.
[00:18:25] Speaker B: Who knows what's going to happen?
[00:18:27] Speaker A: That makes sense. I also think too when you start building that track record, to me now, sure, the report comes out on the Monday, but the real report came out Tuesday, Wednesday of the prior week. Like when you start building up that track record and building up that level of consistency and accuracy, it's, you know, in my opinion, it changes it.
[00:18:56] Speaker B: I want it to Be the truth. You know, I don't know if people are trading on our number in any sort of meaningful capacity.
You know, we put the number out as a reflection of what our, our farmers told us. So it's not us trying to finagle the numbers, not us trying to get all, you know, statistical with the relationship between corn and soybean prices. And, and it's just simply raw. This is what they told us. Yeah, and you're right, it has had good performance over the, over the past and I think people do look forward to seeing the number. I always look forward to do. Like it's just my favorite time of the year. It's like Christmas in March.
[00:19:34] Speaker A: And Cody, do you guys do this at any other time as well throughout the year? Is this the big one? And, and this is the big one.
[00:19:42] Speaker B: We, this is the big one for sure. And I mean when you were here at fbn, Ryan, we did pretty good job in Canada too.
[00:19:52] Speaker A: Yeah, yeah, I remember those days.
[00:19:54] Speaker B: We haven't done that in a while and that would be pretty cool to kind of get that back up and, and running. But I mean, I don't know, is that something, is that something you guys want or what?
[00:20:04] Speaker A: Oh, I, I would think so. Obviously a big spread of, of crops. I remember those days going through.
I, I would get like the, they would send in like the question mark ones like the pineapple guy or something like that like what's going on here? Like. Yeah, yeah, don't worry about that one. Right.
But yeah, I, I'd say anytime we get a indication and this is an extreme year we've got, as we're recording, I'm getting text messages from some of my lunchbox crew members making tweaks in their plans. Right. And it's very extreme this year, but anytime you get insight that you feel good about and that you have confidence in that you can use in your risk management is, is appreciated. So 100%.
[00:20:50] Speaker B: Yeah.
[00:20:51] Speaker A: Well, so Cody, I, I appreciate you coming on. I, if you need help on the, that Canadian one, let me know. We'll, we'll try to give you a boost there. My understanding is that FBN Brokerage is, is available in Canada as well as either a self serve option. So kind of farmer self navigating it is how I, I would say or full service which is basically having somebody that you can connect with and have someone on the other line. Is that accurate?
[00:21:20] Speaker B: Yeah, that's exactly right. There's really two things we can do for our Canadian customers and one of them is Self directed. And it is nice. You do have a mobile option. You can view quotes and then click on the quote and see the chart. You can place trades directly from your mobile device.
When you get home, you can add options to your quote board. If there's specific options or spreads that you're looking at, you show Canola. I know some, some, some brokerages don't like have, you know, the ability to trade. I don't want to say some bro. Like there's, everyone has the ability to trade Canola. I know that historically we've had issues with some of the trading platforms, but yes, you can trade Canola, you can trade your spring wheat, you trade your winter wheat. And, and that's the self directed side. It's, you know, very cost competitive. And then you have the full service where, hey, if you want someone that's a risk management advisor to work with you and kind of pitch some risk management strategies and kind of spend more time digging into your operation, we also have that available as well.
[00:22:25] Speaker A: Awesome. All right, man, well, I appreciate you joining me on the show. Good job on that report once again and yeah, look forward to our next conversation.
[00:22:34] Speaker B: Thank you so much, Ryan. Hey, just as a disclaimer, the one thing that I do need to say is that futures trading is not appropriate for everyone. So make sure that you, you, you consider the risks when you're, when you're looking into those sort of things. But Brian, I appreciate it. I hope you have an awesome day.
[00:22:50] Speaker A: Awesome. Good job.
All right, folks, so for what's on my mind here in crop marketing, I wanted to go back to the handbook from the December conference. And on some of these pages here, the back pages, we have who is on our crop marketing team. We have who is our support team? Advisors. It might be newsletters, but advisors, analysts, emotional. It could be grain buyers to emotional supports. Emotional supports, you know, your farm team. Who's your support when it, when stuff like what we've seen the last couple of weeks happens? Because those people, those people or processes played a huge part in your crop marketing here. The last couple of weeks, crop marketing, Canola was. We basically dug the grave of Canola and we, we rose back here from the dead. This week started late last week, but into this week and the people that you wrote down in this book from, think about from family. Like who when that market moves, limit down Sunday night and you're sitting there with the stakeholders on your farm or your spouse or your partner, your support team, you know, where does, how does that conversation look at that moment and then you go to your advisors or grain buyers or people on your team that you trust. I should, we should put in there the people that you trust more than anything.
And then who are your emotional supports? Right, because it was a very emotional time. You know, we. We have farms that made some big, drastic decisions there. And again, you know, right or wrong, whatever it is, there's no right or wrong really. It's always evolving. But having that plan on who your supports are. Emotional supports, I was gonna say your technical supports. But you know, the people you rely on, maybe from a research, opinion standpoint, and your farm partners in there as well, you relied on all those people here the last couple weeks as this market was going against it, just to come out of this, Just to come out of this and sell canola this week at basically the same price as right before the China Tariff right in there. Unbelievable move. Unbelievable strength and, and, I don't know, support to sit there, go through all of this, and then two weeks later breathe a little sigh of relief and say, all right, we're back to where we were. If I wasn't feeling good about my position that week, I have a chance at redemption. I have a chance to do something and to sell this for the same or even possibly higher than where it is. This unbelievable how powerful this has been over the last couple weeks for many of you. I've been a part of the conversations as well, like we all have, and I just, I can't highlight enough how identifying those supports, relying on those people, can guide you through some of these tough days and tough weeks. Never mind. You keep going about the plan, your percent sold by what day, your cash flow, or pardon me, your margin goals, your total revenue goals. All these numbers, they let you think big picture and just escape a little bit from the pressure of that day, of that moment, of that limit down move. They let you escape that a little bit. They let you think a little differently, and it paid dividends here once again, folks. It did. It's incredible the conversations I've had over the last couple of weeks. But there was no panic in our game. There was no fire selling. And yeah, we did do a little bit of stuff this week, but that's so everyone could feel a little bit better and get back to where we were just before the China tariff. All right, so that's all my mind for crop marketing for this week, I think. Again, I think that's just a big one. And I hope that you can identify, write down your plan and execute. It ain't over Folks like it is not over. Even by the time you listen to this, there could be that next headline that takes this market and does what it does with it. But just having those people on your team here in 20, 25, it pays huge dividends. All right. The other thing I've spent a lot of time on here this last week, I spent a lot of time, you know, reviewing crop insurance, all sorts of crop insurance stuff. I don't want to get into the weeds too much about crop insurance. Saskatchewan deadline was. Was lost well earlier this week. Alberta deadline is coming up. Actually can't remember the Manitoba deadline, if it's same as Saskatchewan. I think it is. But anyways, lots of crop insurance reviews and discussions and all. All I'll say, folks, is like, for me, what. What got out of hand was all the different insurance levels and costs and talking to some farms where, you know, you're bundling multiple products and you're 50, $60 an acre, $65 an acre in some cases, like your fertilizer is more expensive than that. Your land probably, and equipment payments probably more than that as well. But like, insurance is coming in as a top three, three or four expense on the farm this year. And I get it, you have to manage your risk. I'm by all means, you know, talk to the experts and figure out what works for you. But, you know, when. When I boiled it down to that, you know, in our farm, you know, we're talking about 600 grand in insurance premiums. Again, I'm not saying that I could tell you what's going to happen here, but on our farm, we talked about what level of risk were we comfortable with, what level of risk were we okay owning that risk and how much do we want to offset with insurance? And I tell you, we are not spending 60 bucks an acre to offset that. I was getting a little bit out of hand, so you got to make it your own. But I spent a lot of time and energy on insurance this week or this last week or so. And you got to make it your own. You have to be comfortable. You have to sleep at night. You have to protect your operation. I tell you, though, that that cost is getting a little bit out of. Out of hand. All right, that's it for what's on my mind here for crop marketing, even though crop insurance really isn't crop marketing. So I'm. I'm in studio. I'm making. I'm making tweaks in the background. I'm making subtle tweaks. I've got. Got some Stuff that's going to be changing here again in short order. We're trying to keep it fresh for you on the what's your futures Podcast. But I was looking at my John Deere signage and I, I am not the most observant person out there. My wife, it kills her when she comes home and she says, what do you think of my hair? And I'm like, it changed. It looks fantastic, right? Not, not good. I'm not. I don't observe things very well. But I noticed that on my John Deere signage I have three different logos. And it got me thinking, wait a minute, did I buy like knockoff signs here? I thought these were all legitimate, so I looked it up and there are eight different logos. John Deere has evolved and changed logos from 1876 since then to now. Eight logos. And the one on my hat is from the year 2000 on. But the one from my youth, the one that I identify with the most is the one from 1967 to 2000. It is, I'm pretty sure I have it. Oh yeah, it's on the bottom sign. It's the bottom one.
That is the one that we had on the 8650, on the 4440, on the 4230. Like that is the logo that I identify with. So I ask you, what is your go to John Deere logo? What is the one that stands out? Are you the 2000 and on or are you old school like me, going back to 1967, to the year 2000, the one of my. Of my youth when I was learning to drive a tractor. Let me know, hit me up in the comments what logo you identify with from John Deere. Check them out. There's. Yeah, eight different ones going back to 1876. Positive moments, positive moments of the week. I like talking family at this time, but I gotta go to the well here, back to the well of crop marketing because we went through the ringer here in the Canola market the last couple of weeks. All right, you know, I was sitting here as well saying, hey, biofuel policy, that is a big concern for me. And we, we did see some positive headlines out of that this week. I'm not saying it's all perfect yet, but we did see the Canola market find some strength. And my positive moment is, is just having the confidence in the plan to not panic, to not sit there on the Monday after the China announcement and fire sell this stuff. Right. Obviously, you know, there's the talk out there that some selling happened and stuff. But the positive moment here is that for the greater plan and the maybe trusting the plan is the positive moment. Trusting the plan because the market has gained everything back since then. As of recording this, the market has basically gained, if not everything is very, very close. It's been frustrating, it's been stressful, but in a positive way. There was no panic in our game and, and we got back. All right, so that's my positive moment of the week. I think that's super powerful for a crop marketing plan.
All right, folks, I've got Ryan Copperthorne with Cows in Control joining me once again here. Ryan, we're in episode 70 this week, so moving along here.
[00:33:02] Speaker C: Yeah, congratulations.
[00:33:04] Speaker A: Last time you were on, there was a, we talked about your risk management workshop. Has that happened? Did you guys have that event? I think it was down in Calgary. Was it? How did it go?
[00:33:18] Speaker C: Yeah, it's, I held it in Crossfield Veterinary Egg Health, they allowed us to use their building there, but we had a full room again. So I'm gonna keep doing these every, probably every six months and until people stop coming, I guess. But it, I would say it was a, it was a good event and, you know, it gives me a chance to go one on one with, with people on, on exploring how to do hedging and how to use the insurance programs and things like that. So I've enjoyed doing it and I think people are liking it. So I'll just keep doing it, I guess.
[00:33:52] Speaker A: Awesome. Congrats. And keep it up if that, like you said, if that room's filling up, keep her going, man. That's great. I've been in the dumps a little bit here about grain prices the last month or so and all the nonsense out there.
A bright spot here is cattle prices, right? What's the state of the cattle market here in the spring of 2025?
[00:34:15] Speaker C: Yeah, I mean, these prices have been super hot in the cattle side and so we're just really grateful for that. I, I, I thought they were too high in, in relation to, you know, where all these tariffs are going and tariff talk and such. But, you know, maybe they know something that I don't. But it just demonstrates that we're really short of cattle, that, that, you know, these calf prices have just been going higher and, and, and you know, I think we're, we're suffering shortages. I have lots of clients that are trying to buy heifers to, to keep and rebreed and they, they're having a hard time finding them. They just aren't out there, you know, so we hope this, this market continues, keeps going higher. But it's been good.
[00:34:59] Speaker A: Yeah, awesome. It's, it's definitely a bright, bright light out there for sure. That's great.
In your recent article, your recent newsletter, you're referencing the 1950s and the 70s from a historic perspective on where we're at for cattle futures here. Can you just tell me a little bit about what you wrote here this month and what stands out?
[00:35:28] Speaker C: Yeah, well, when you get into these supermarkets like this, like where the, where the market, we've had just an incredible bull run since 2020.
The only way to sort of really know where to, from here is to look in the past, in my opinion. And so I take those long, long, long term cattle charts and you just take a ruler and you just basically run a ruler across the top of the, the tops, you know, going back to the 1950s. And it, it establishes a trend line for you. And then you can do the same thing with the lows. You run a run ruler along all the, the lowest prices, you know, from now going back to 1950. And you can kind of get this trading range that, that we, that we operate in. We've recently bounced our head up against the top of that trend line going back, you know, the last time we hit it was 2014 and then before that was 1979, which were the huge mega bull markets basically in cattle. And so we've matched and got up as high as those levels, you know, in a slope, in an upward trajectory. Now I'm starting to question, you know, okay, like, what's going to propel this thing further or is this really it? I've been through a couple of those cycles where it usually turns when you're not expecting it. You know, things are going good and running. You know, it's like the Canola market was a few years ago. It's like running hot and everything looks good and all of a sudden, bam, the whole thing turns and you have no idea why it turned until after the fact. And so I'm trying to prepare people for that eventuality that, that, that could come. And when it does come, you know, these markets can drop 15, 20% pretty quickly. So you have to be, you have to be ready to, to hedge that.
[00:37:15] Speaker A: Yeah. Is there.
Maybe I'm naive in saying this, but is it, is it just because, you know, when you, we grow a crop a year in, in South America, they're, they're growing two crops a year.
Is it just with cattle, we, it just takes that much more Time to get replenished here, like, just takes years and years and years to, to replenish. And the barrier of entry is for a new farm or a farm to come back into cattle is hard. Right? Like, it's not easy.
[00:37:48] Speaker C: Yeah, yeah. And I don't think we are going to rebuild, to tell you the truth. I think, you know, everybody's waiting for this, this heifer retention and the herd rebuilding. I think what could happen is the demand will break before the supply breaks us. So it'll just get, you know, if we get a recession or something, that can set back our demand because a lot of our, even though we're producing less cattle, we're still producing similar amounts of beef than we were, you know, five, 10 years ago or even 20 years ago.
[00:38:20] Speaker A: Right.
[00:38:21] Speaker C: We're just that much more efficient, but we're really short on cow numbers. And I just, I, you know that the whole doubling and almost tripling of prices here has been more, I would say, demand led than supply led so far.
[00:38:37] Speaker A: Okay, so futures, cattle futures are very, very high. But when you go to the local, you know, auction, lots of spring auctions happening right now, bull sales popping up across my feed all the time now. How, how are those prices doing?
[00:38:54] Speaker C: I think they've been relatively good. I, I always question whether, and, you know, producers will hate me for saying this, I wonder whether the bull prices are high enough sometimes when I compare to, you know, how much productive value there is in all the calves they generate. But the sales have been strong and, you know, replacement heifers are just like gold right now. You can't find them and they're expensive and, and generally the cash prices have been leading the futures for the most part. And especially in the US the cash prices have been leading futures higher. And Canadian prices have been kind of trudging along behind, maybe at a little discount because we're trying to figure this tariff thing out. But for the most part, you know, the cash prices are really strong.
[00:39:41] Speaker A: Okay, let's turn to some of the, these wild cards here. Some of these factors. You know, we, we paused here to watch Trump's announcement. I don't expect you to have an opinion on, on that at this time. It's so fresh. But what do you, what are you gathering here for some of these risks and some of the stuff coming out of the US From a tariff perspective?
[00:40:07] Speaker C: Well, there's good news and bad news. And from what I saw, like, the good news is that there's not going to be a tariff on USMCA items. So it's basically going to be status quo with where we are right now.
There's going to be 25% auto tariff on Canada and such. But as far as our beef and grains, as far as I understand right now, there's going to be no tariff impact worse than where we are right now. So that's a positive.
But I was shocked when I was watching that speech. I was just absolutely shocked at the tariffs that he's implementing globally.
I don't know how that ends. Well, I think we're going to see a really nasty stock market correction on account of that because there's so much money that flows in to the US from foreign holders. And, and what he's doing with that reciprocal is he's looking at not only the tariffs that people are charging, he's also looking at non tariffs, but then he's looking at currency, you know, if people are manipulating their currencies as well. So in, in essence, he's basically saying we're going to devalue the US Currency to, or, you know, we're going to make them bring their currencies up to match ours, which is, in an essence devaluing the US Currency. So that could be really bullish for commodities. It could be really hot. But I don't think the people that are investing in the US Stock market from other countries are going to like that very well. Why would they? They've been investing their dollars into the US because they know that they can make money on the stocks and also get upside on the currency. If the US Currency is dropping there, I think there's going to be a lot of money pulled out of that stock market and, you know, it might trigger a recession which, where we have to question the demand side of our cattle. But as far as the US Dollar dropping and tariffs, I think it's, it's actually bullish.
[00:42:07] Speaker A: So, folks, just to put this in perspective, we're recording about 10 minutes after Trump has ended his press conference. So it is very, very fresh. And as we're chatting, Ryan, my phone's just lighting up from other folks in the industry about what they're pulling out of the report. So I'm not seeing anything different, but I'm getting. What a mess. I'm so confused.
All sorts of things coming in. So, yeah, you know, I think the stock market, the impact to the stock market, the impact to this transition period or whatever we're going to call this, you know, into maybe this U.S. recession, you know, if that's what happens here, I'm not saying that is happening. But if that is what happens and demand for beef drops, you know, when you, when you're working with your rancher clients here, you know, across the prairies, like, how are you tackling risk management right now or, or what? Yeah. What pops up in that conversation?
[00:43:19] Speaker C: Yeah, it's, it's been a pretty straightforward strategy for me. I've been telling people, just get yourself covered with lpi, Livestock price Insurance and that, that basically puts a floor on your Canadian prices and do that as tariff hedge number one. So lock up everything you got to cover that tariff risk. Now maybe after today that was a, that was wasted money. But at least, you know, riding into this announcement today, you knew you were kind of covered. So now that this tariff announcement is kind of behind us and it doesn't look like there's going to be tariffs on beef so far from what I've seen now that money is, you know, that you're still going to have a floor price thanks to that insurance. But the next stage for me is to look at the futures market in general. I really think that if there were tariffs or whatever that the futures market could keep going up because it'll be seen as a barrier to imports. I'm not sure what's going to happen to that futures market now. I've just been telling, I've had everybody on alert saying that we're looking for a topping in the charts. We haven't seen any topping in the cattle charts. In fact, they were pointed higher as far as today.
So. But once I kind of get a, you know, once the fork kind of feels like it's been stuck in it and it's done, then we're going to take some pretty aggressive shorting actions on the futures, you know, whether we use options or futures or whatever. But we're going to short that board because I think, I think that that could be the end of the, the futures rally for now.
[00:44:53] Speaker A: And is that market quite, is liquidity pretty decent when you're trying to trade options in, in that market or how, how easy is it to get put bought or something like that for most.
[00:45:09] Speaker C: People that are, you know, most people are trading one or two contracts. If you're a rancher, it's, it's not hard at low volumes. If you were doing high volumes. Yeah, the feeder market can be a little tricky. It's not, you know, there's low volume but, but they like to, you know, if you put stops out there, they love taking out your stops and things like that. So it's, it's low enough volume, they can do those kind of games.
[00:45:31] Speaker A: Sure. Okay, so just going back to the insurance for a second here. I'm just so green on all this. So my buddy Scott, I talk about him on the show quite a bit, but he's just wrapping up calving.
So is it as easy as like going to count? Okay, I've got this number of calves here and buying insurance on that number of calves or honestly, how does this work?
[00:45:56] Speaker C: Yeah, so if you knew that generally you would look at like what your probably going to wean in the fall.
So if you knew you're going to wean 100 calves and they were going to weigh 500 pounds, you just multiply it. You just figure out how many total pounds that is. And then you're buying insurance to cover the price on those for September, October, November, whenever you decide to. To buy the insurance. And what that does, it just locks in a floor price for those calves at a certain weight.
[00:46:25] Speaker A: Sure.
Okay, nice and easy then. And you can buy so price protection here for the fall. How far out can you go right now on that?
[00:46:38] Speaker C: Oh, I think it goes out to I think December now. I think. Okay, yeah, November, December, something like that.
[00:46:45] Speaker A: All right. Okay.
Anything else kind of stand out here with what's been going on the last number of weeks?
Again, I got all these questions coming in from growers as well and that don't have cattle, but wondering what the feed side of the equation here on barley. And the one theme that's come up is that we take us, I don't know, calves is the right way to say it, but we take them north, we feed them, and then we ship them back south. Like is, is that true and is there any impact right now to that type of trade?
[00:47:28] Speaker C: Well, yeah, I mean, it all came down to those tariffs what was going to happen there. But there's a lot of. There's cattle go both ways really. You know, we bring calves up to feed here and. And we send a lot of slaughter cattle south. And so it's kind of tit for tat. You know, I think we exported 780,000 head of cattle last year in total and we imported three hundred and something thousand back. So I think we were net about 400,000 went south.
Okay, but. But generally, I mean, it's kind of both. And as far as when we feed them, I think we're feeding a lot of imported corn. I think it's just easier for those feedlots in Lethbridge to take rail loads of corn than it Is to even barley, because they're always worried about the supply of barley. Right. And there's. Sometimes there's price advantage and quality advantage on the corn side. So if there's reciprocal tariffs on the corn, that could get interesting. I hope the government doesn't do something dumb like that, like a retaliatory tariff on corn. That's something that we'll have to keep an eye on. But, you know, that would be the impact I'd be worried about is that kind of. That kind of thing. But it could be bullish for barley producers, if that were the case.
[00:48:48] Speaker A: Yeah, would be. Yeah.
You were telling me, I think it was in one of our conversations, that they. There is some newer processor technology where corn. Is it flaking or something like that? I can't remember.
[00:49:05] Speaker C: Steam flaking.
[00:49:05] Speaker A: Yeah, yeah, yeah. That's been a bit of a transition the last couple of years, right?
[00:49:10] Speaker C: Yeah, yeah, yeah.
[00:49:12] Speaker A: Okay. We don't have to go into any names here or anything like that.
And again, I just. I know enough to be dangerous at times, but there's a. I think it was a cooperative that.
I don't know if bankruptcy is the right word, but there's a large cooperative, and I don't know, something is not. Not working there. And I'm just wondering, is there fallout that could happen in the industry from this cooperative? It was explained to me that basically, they provide a loan for four cattle. You sell your cattle, you pay your loan back first, you keep the profits or proceeds. But I don't know if you can explain it better than that. But any fallout expected in. In the industry, like, in that situation?
[00:50:05] Speaker C: Yeah, I. I don't know. I'm an. I don't know enough to be dangerous, too. So I'm. I'm gonna. Not gonna comment too much, but what I will say is it was the largest feeder association in Alberta. And these feeder associations, basically, if you want to buy some cattle, you put 5% down deposit, and they loan you the cattle, or, you know, they buy the cattle for you, you pay interest, and then you pay it back when you sell the cattle. So there were some questions about the eligibility of the people that were taking these. These feeder loans. And so, you know, I think there was some concern about that, that there might have been inappropriate usage of that program and maybe even to the point of fraudulent activity. Okay. So that. What happened was that feeder association went into a receivership and got some. There's a legal firm that was actually managing it now, trying to get it out of that position. From what I'M hearing it's. It, it's not as bad as what people were worried about. Like they found the cattle, they're dealing with it. They think that that feeder association is going to get back online fairly soon.
[00:51:13] Speaker A: Okay.
[00:51:14] Speaker C: Yeah, but there were a lot of rumors about like, you know, $280 million or something, which I don't think were founded. So I think, I think the news is. I think we have to be patient and just see what actually transpires. You know, I wouldn't listen to the rumor mill on that one yet.
[00:51:30] Speaker A: Sure. Yeah, I know when I, you know, I read the story and I just messaged a few feed buyers and I'm like, is there any, like, impact on here at all that I need to be aware of? And they said, no, no, you know, don't, don't really worry about this on like a feed demand side or anything like that. Just, just, you know, give it some time or something like that. It's like, oh, all right.
[00:51:52] Speaker C: It's a huge feeder association and it would be concerning, but I think they're doing a good job of fixing the situation. So from what I'm being told anyways, I think it's, I think they're getting it resolved.
[00:52:05] Speaker A: Okay. Okay. Awesome. All right. Anything else in your world that you want to. Want to bring up? That's all I had for questions for this week, but anything else that's top of mind.
[00:52:16] Speaker C: No, I just wanted to say, like, I, I'm. I am calling for maybe a topping of this market, but I don't think it's doomsday. Like, I don't think it's like gonna be like 2014 where the market just fell apart and gave back everything in a very short period of time. I think it's more like I compare it to the 1979 market where it'll top out. We're probably going to give back, you know, over the next four or five years. We could give back, you know, half the gains or something like that. But I think the, the new trading range is probably going to be at, at these elevated levels. So, you know, you can expect $5 cabs on the high side and three 50 or $4 cabs on the low side. So, you know, I, I don't. It's not a reason to go sell your cowherd or freak out. Just be ready to hedge it. And that initial drop is usually the biggest one. It's, you know, it can be 15, 20%. It might drop pretty quickly if it does roll over, but you know, that's what hedging tools are for. That's why we're looking at the futures and options and the livestock price insurance. So keep building, don't be afraid of it. We still, we're still going to be short of supply. We have not built our supply back yet. So I think there's a long case, long term case for cattle.
[00:53:31] Speaker A: Yeah, I can't argue against that. Again, the barrier to entry, I don't know, it just, it seems, seems quite, quite challenging. So. All right, Ryan, I appreciate your time and your patience with me as I get learn something every time you're, you're on the show. So thanks for, for joining me here in episode 70. Folks. You can check out Ryan at CowsInControl and he's doing some great work with ranchers here across the prairie. So if you have questions, it's Ryan Coppethorn cows in control. Throw that in Google and I guarantee you he will pop up. So thanks so much, Ryan.
[00:54:11] Speaker C: Yeah, Yvette, thank you.
[00:54:15] Speaker A: All right, folks, eating your veggies for this week. You know, when you, when the canola market puked, you think about that feeling of maybe feeling a bit undersold or, or some remorse or some regret. Well, hey, you're back, you're back at where we were. Sell some canola. Number one, eating your veggies this week. Sell some darn canola. You got some, maybe you got some old crop to sell. Get your feet Wet on your 2025 crop. Start picking away if you're profitable. As of recording, my 2026 target has not hit yet. But don't sleep on November of 2026, folks, to get your plan going. I know you're going to sit there and say, Brian, you're insane, man. Three crop years in one week. Hey, man, guys, if it pays the bills, I don't know, don't sleep on it. November 26th. 650. Take a peek. All right, the second thing that I have here for eating your veggies for this week. So obviously a big week here of, of tariff stuff once again.
And, and I would just say that you're, you're exiting, you're exiting the quiet time now. You're busy, you're farming, you're busy. But it's April now. Welcome everybody. It's April.
You're gonna get a lot busier here over the next couple of, couple of days, couple of weeks, right? You're gonna get very, very busy. And so what I want you to do is I want you to prepare for your spring rallies. Okay, now, maybe it's setting some targets out there for spring. Now, you gotta be a little cautious. Markets are a little. Get a little excited in the spring. But just to review your spring, your plan for your spring rallies and how you want to execute, and put that somewhere that you can review. If it's in your notes section on your phone, I know some of you will write on the windows in the tractor, like, maybe it's there, but just to figure out how you're gonna prepare for this spring rally, because this spring, if there are rallies, they are going to be critical for your crop marketing plan. Absolutely critical for your margins in your 2025 and 2026 crop marketing plan. Okay? So I want you to prepare for your spring rallies right now, and I want you to write down your plan. I will sell these bushels at this price. I am going to scatter in these targets. I'm going to stage them in, starting here and going to this level. Get some of this done and in place or at least to a spot you can review regularly. Because you all get busy, you guys. You tend not to do a lot in the spring from a marketing perspective when the action is happening. All right, so write it down. Don't miss it this year. It's important. It is important. And the last thing I want you to do for this week is pencil next year's seating plan. I've said some outrageous stuff on this episode already. Some head scratchers for you, and here's another one. But pencil it out for next year, because I guarantee you that I will have a canola sale done in very short order, maybe two. I will have. Well, I will definitely have some wheat sales done for next year over the next eight weeks. Doesn't look likely at the moment, but, yeah, they'll be there. There'll be some wheat sales done next year. Your crop marketing plan could start now. All right, so pencil it out. What are you planting next year? I know it's a head scratcher when you're trying to figure out what to do this year, but think about it, and if you have a path to profitability there, where you're making money, I don't know why you wouldn't start crop marketing for next year. All right, that's it for eating your veggies for this week. Well, thanks again, folks, for hanging out with me in episode 70 of the podcast. You know, a 70 is not a big, like, monumental number, but it's cool to see them stacking up. So please share the episode with a friend, colleague. I get messages from new listeners all the time. Super cool. I got a message from Bob just outside of Regina this week. A new listener. I got another one out of Macklin from the the Stangs, I believe. John Stang, you know, fairly new listener. Very cool. Don't be a stranger. Ryanothefuturespodcast C. That's the email. You can get a hold of me that way, but share it with friends and neighbors. You know, maybe they'll enjoy it here during listening to it during the spring in the tractor. I appreciate it, folks. Lots going on this week. Check out that hat contest. Design the hat that is going to be the coolest hat this summer at Egg in Motion and beyond. All right. It's going to be a wicked hat, raising money for a great cause and it could be your design. You could be the winning design. You don't have to be an artist. All right, stick figures, whatever you got to do. You are competing against my four year old. So that's it for episode 70, folks. Thanks again. I'm out.
