Katie Geerdes

Government officials are saying that the Federal Emergency Management Agency may run out of money before the end of next month. With the hurricane season still possibly active through the rest of fall, FEMA has been stretched thin while it is currently dealing with the aftermath of Hurricane Helene. This year was already busy for FEMA and other aid organizations because of severe tornados and floods.   Numerous natural disasters have challenged agriculture in 2024. For the U.S., it started early with the first six months of the year including over twice as many hail events than what occurred through all of 2023. Texas, Kansas, and Illinois were the states with the most hail this year. Deadly tornados started up in January and accelerated toward Iowa's devastating tornado in May. Tornados were involved in 13 of the 20 natural disasters this year that caused damages of more than $1 billion. Other of those billion-dollar events included a late-spring derecho in the South, the New Mexico wildfires at the start of summer, and the historic June flood around the shared corners of South Dakota, Minnesota, Iowa, and Nebraska.   There have been notable natural disasters outside of the U.S. this year…

No one should be surprised by the level of acrimony, death and destruction in the Middle East. Conflict there has gone back centuries and appears to be ingrained in the DNA of those surviving there. In many cases such as Gaza, survival is all that there is. Israel's primary concern is survival as well. This region's historical conflict is literally pre-biblical and driven by the religious fervor of its inhabitants which takes it to a new level and keeps it there. The 'eye for an eye' 'tooth for a tooth' reprisals carrying on today reach back before Christ. When a father is killed, the son picks up his weapon and so on and so on. Reprisal spurs revenge. This circular firing squad is still unfolding in the events of today. Theoretically Christianity was supposed to be the cure for the conflict with a liberal dose of 'turn the other cheek' intended to diffuse it. Then came the Crusades which were an example of hypocrisy that eventually contributed further to the conflict rather than end it. Both sides of the current conflict appear to believe that the only solution is the elimination from the earth of their antagonist. Even a cease…

Brazil's Central growing region remains dry this week, but next week's forecast finally sees some precipitation trickling in. Volumes remain low, but most regions should see between 0.5" to 1.5". While this is not sufficient to build any soil moisture, it may encourage producers to accelerate planting with the hope that more will be on the way. The northwest corner of Mato Grosso continues to be the sweet spot receiving the bulk of the rains as well as in RGDS. But pretty much everything in between remains below average. The 30-day weather outlook for October shows improvement but it all appears to be back ended. We don't see much of the rainfall starting to build until October 10th.   Our research suggests we are still in the very early stages of Brazil's planting window. Historically Brazil has had roughly 10% of their crop planted around October 6th. They will likely fall short of that this year. 70% of their crop should be planted by November 23rd. November was our primary planting season on our farm in Bahia. The point is that while Brazil is arguably a week behind on their planting, there is still plenty of time to catch up…

The lack of a new farm bill, not updated since 2018, has negatively impacted me. I applied for conservation waterway CRP as part of an NRCS cost sharing program in July that they expected to be approved in August so we could get the work done this summer. August came and went with no word of approval. It is now October. Now they informed me that they cannot approve it until the next fiscal year. They assure me that it will eventually be approved but we will miss the opportunity of having had this land in prevent-plant corn when the work could have been done this summer with no crop damage. They tell me that the lack of new farm bill authorization for CRP funding causes it to be approved in tranches, limiting and delaying approval. Most likely now, at least some of this work will have to be done next spring. It is frustrating. For most farmers the most important component of the farm bill is crop insurance funding. Crop insurance is really the only safety net that farmers now have. It will be attacked in the next farm bill from both sides of the aisle in Congress because…

Our local ethanol plant briefly pushed their bid 25 cents over CBOT for a short period of time Friday, as despite the onset of harvest, the end-user pipeline is slow to refill. Same for soybeans. Spot soybean basis has improved as well. Cash soybean bids have been poking above $10 bushel which is a psychological trigger point for some farmers in order to spur consideration of sales. It is odd to see the basis improve as harvest activity initially ramped up but is likely to weaken when enough trucks cross scales. We have been asking the question as to how grain stocks have supposedly expanded year to year, yet end-users act short bought and needing supply. Again, this is regional.   Price lows, seasonal lows, were set in late February and again in late August related to commercial basis and price-later contracts where farmers let the pricing default to expiration. Farmers Should Stop Doing That!   USDA put quarterly corn stocks at 1.76 bln bushels which was 84 mln bushel below the average trade estimate. Demand continues to exceed trade expectations. There is not much sign of any increase in corn stocks west of I-35. In fact, in the flooded…

Fall started this week and seemed to leave the speculators buying into what is usually known to be a more bullish seasonal period just ahead for grain futures. For speculators to continue covering short positions is one thing, but is expected that sustained strength for grain prices would rely on the commodity trading funds eventually building significant bullish bets again. "A bull market always needs to be fed," so the direction of the managed money position will itself depend on a steady flow of friendly news and data.   The next test for sentiment begins on Monday already, with USDA issuing the Grain Stocks and Small Grains Summary reports. This is the update that can include the yield and acreage revisions for the previous crops. The average trade guesses slightly favor seeing reductions to last year's corn and soybean production estimates. The ranges of the ending stocks estimates show the extreme alternatives of corn stocks being as low as 1.655 billion bushels with the most bearish view for the 2024 carryout to rise back above 2 billion. Soybean stocks are currently pegged in the area of 350 million bushels, with a range extending up to almost 450 mbu, after measuring…

There are families who have begun to contemplate what the result of the November election will have on the tax consequences on assets and estates. We had a call with our tax advisor and accountant last week to review where we were in our estate plan and whether there were additional actions that should be taken to protect wealth and mitigate risk. The current capital gains tax rate is 23.5%. That is as good as it is going to be with the risk all on the side of that tax rate rising. Same with the estate tax exemption, currently approximately $14 mln per person and $28 mln per couple (rounded off). Not a lot of farm families will be impacted by the current level of exemption. These exceptions however were established by 2017 tax law which expires at the end of 2025. If Congress doesn't extend them in a new tax law deal, the exemption automatically shrinks by half. If the exemption is reduced to $7 mln per person, the Urban Brookings Tax Policy Center estimates the number of estates owing money will more than double from 4000 to 9000 in 2026. ,LA (Kamala) is promoting a 40% capital gains…

Part 3 of 3 When a tariff is placed on China…China doesn't pay the tariff. The buyer of the Chinese made product sold in the US or EU does. If a tariff of 60% was put on all Chinese goods being imported, the buyers of those goods have a tough decision to make. How much do they raise their prices to compensate? …the full 60%, which would be a shock to their customers, or do they eat some of the margin taking a loss themselves? If Trump looks strong near Election Day, I would expect trade with China to surge. For example, a maker of US grain handling equipment said that the only place that he could currently get some component he needed was from China so he bought a 3-year inventory of the part hoping to avoid a trade disruption or tariff hike. The supply chain is global with parts sourced from all over the world. A 10-20% tariff imposed on all US imports from everywhere may mean there is nowhere else to source goods but domestically. If those sources do not currently exist here then industry would need to expand to create the plants and local supply to…

Little has changed in Brazil's weather forecast for major growing areas since last week. The market is becoming increasingly sensitive to a potential delayed start of the rainy season. One Brazilian grain trader contact described this rally as "bullshit". His reason was that a late start to Brazil's soybean crop didn't mean anything to the final size of the bean crop. He argued that it will have a greater impact on the second crop corn crop that followed. While he is correct, the market is still going to react to it. It is no different than if the planting window in the US got pushed back two weeks. It doesn't mean the crop is a disaster as it has time to recover. But the market is still going to react.   We have spoken with local contacts that typically get an early jumpstart on planting in Mato Grosso and yet are sitting idle. Temperatures are consistently hitting triple digits. Wildfires are popping up everywhere, creating a constant haze blocking out sunlight. It is not a fun place to be right now. Based on the current forecast, there is an increasing likelihood that planting pace will fall below average. Does that…

Dr. Elwynn Taylor could fill seats in farm outlook meetings each season as farmers had learned to respect the ISU Climatologist. There were weathermen and there were agronomists. Talyor was one of the first climatologists who assimilated into both. He was one of the first weather scientists to connect the Pacific ENSO to summer corn-belt weather. In fact, the -7/+7 90-day SOI benchmark used to delineate the existence of El Nino/La Nina used by the industry was set by him. He had researched a number of climate cycles that would show up in the US trendline corn yield. There are many good climatologists today that are being helped by base climate knowledge that was first determined by Taylor in his career that they are building upon. Taylor was on the cutting edge of climate research that exploded during his era with the advent of technology in both data collection and analysis. Today there is an AI weather model which would not have surprised him at all. For example, Climate Scientist Eric Snodgrass is "always working on his models" building and remodeling his website. While he is paid by Nutrien Ag which supports his work I think that he is independent…