Grain Division Report – May 2023 Grain Mill

Brian Fadness

For those of you that have delayed pricing contracts expiring at the end of May, you will be receiving an invoice and a letter in the mail outlining what you need to do before the end of May. Please watch for that arriving in your mailbox or contact the Southwest Grain location that holds your delayed pricing contract for more information.

Cash spring wheat put in a recent low of $7.04 on May 2. The decline was mostly due to U.S. spring wheat planting getting started, Canadian planting intentions reported more spring wheat acres, and some forecasted rain for the parched winter wheat crop. Since May 2, cash spring wheat has increased $.70; all that in just four days. The turn higher was helped by Twitter pictures of some sad looking winter wheat fields. There are some decent looking fields on Twitter too. To put this move higher into perspective, on the futures side, this is about a 62% retracement of the move lower that started April 18, the most recent high. Extending out to the next high of April 3 the retracement is about 60% of that move. For new crop hedge-to-arrive contracts, Minneapolis December has recovered to about $8.50.

Remember to place offers with us for your target prices on spring and winter wheat, corn, and soybeans. This is a good idea all the time, but especially so during busy times.

Southwest Grain is planning on handling canola at Dickinson Terminal and New Salem. Lemmon will also continue to handle canola. Dickinson Terminal and New Salem will begin with this year’s new crop. New crop bids have been posted for a few weeks for all three locations.

Please remember to clean out trucks and augers of all fertilizer and treated seed before delivering grain to the elevator.

Brian Fadness, Manager Grain Division

From the Board Room – May 2023 Grain Mill

Shane Sickler

Greetings, from your SWG producer board! I would like to start by welcoming two new board members, Loren Bock and Josh Haugen, to the SWG board of directors!

  I look forward to working with them as we navigate another spring planting season.

It’s that time of year again, where sleeping in is not in the picture for the next 8+ months in the ag world.  Long days and long hours are a way of life for farmers and ranchers.  The signs of spring are in full bloom!  Baby calves are running everywhere and, on some farms, kittens darting through straw, and maybe even a new foal running alongside its mom.

Spring has finally arrived!  Now if the temperature would warm up soon so we can ditch the heavy sweatshirts and jackets and chore gloves needed in the early morning only to misplace by the warmer afternoon!  The next morning you start over with another jacket and gloves and before you know it, the coat rack is empty and outwear is scattered across the farm!

Seeders and planters are busy getting crops planted at a fast pace in the western half of the state.  Our long winter of never-ending snow mostly dried up with the help of a lot of windy days.  The water supply for dams is a nice start for area ranchers.  It will be nice to get pairs out to green pastures soon.  We do have to deal with Old Man Winter’s effect on a lot of fences, thanks to that heavy wet snow that snapped a lot of wires.  A lot of us will be spending a fair amount of time out on the prairie doing fence repair!

SWG is very busy getting the nutrients spread in the fields and the staff at the fertilizer plants are working hard to keep up with the demand of the producers’ needs.  It seems as though it has been non-stop as someone is always there getting anhydrous or dry fertilize.  Thank you to all the employees for putting in long hours as well, to fulfil everyone’s needs. As Memorial Day fast approaches, please be safe getting your crops in and as you work cattle during branding and hauling to pastures.  Take some time to take a break over the holiday weekend and enjoy some family time.  Thank you for being a loyal customer and patron of SWG.  We truly appreciate your business. Remember to stay safe, healthy, and grateful, and take care of each other!

Shane Sickler

President, SWG Producer Board

Heat Stroke Safety Tips

Hello! I am Nikita Lorenzen, the new Safety Specialist for Southwest Grain. I worked here a couple years ago and am happy to be back! Previously, I worked for Stark County Emergency Management for a couple years and gained some valuable experience. I am also on the Dickinson Rural Fire Department.
With the warmer weather finally here and operations ramping up, it is important we stay hydrated and monitor each other for signs of heat stress. If your job requires you to work outside in hot weather, you can take precautions to minimize the risk of heat-related illnesses such as:

  • Staying hydrated and drinking before you get thirsty.
  • Watch out for co-workers exhibiting signs of heat exhaustion and heat stroke.
  • Take time to rest and cool down

    Signs of heat exhaustion include:
  • Pale, ashen, or moist skin
  • Muscle cramps
  • Fatigue, weakness, or exhaustion
  • Headache, dizziness, or fainting
  • Nausea or vomiting
  • Rapid heart rate

    Uncontrolled heat exhaustion can evolve into heat stroke – which is life threatening. Signs of heat stroke include:
  • Body temp above 103 degrees
  • Skin that is flushed, dry and hot to the touch; sweating has usually stopped
  • Rapid breathing
  • Headache, dizziness, confusion, or other signs of altered mental status
  • Irrational or belligerent behavior
  • Convulsions or unresponsiveness

    Heat stroke requires immediate attention:
  • Call 911
  • Get victim to cool place
  • Remove unnecessary clothing
  • Immediately cool the victim, preferably by immersing up to the neck in cold water (with the help of a second rescuer)
  • If immersion in cold water is not possible, place the victim in a cold shower or move to cool area and cover as much of the body as possible with cold, wet towels
  • Keep cooling until the body temp drops to 101 degrees
  • Monitor the victim’s breathing and be ready to give CPR if needed.

Stay Safe!

Nikita Lorenzen, Regional Safety Specialist

Regional Manager’s Report – May 2023 Grain Mill

Delane Thom

We are in the month of May 2023 with this newsletter, and we have completed six months of operations or the first half of fiscal 2023 (Sept 1, 2022 thru Feb 28, 2023).  Everything was setting up to be what looked like a late spring due to the record, or near record, amounts of snow over the winter and that is exactly what happened.  Very little crop was seeded in April.  This is similar to last year with the back-to-back blizzards we experienced starting April 12, 2022.  The moisture is certainly welcome and will give us a good start on the 2023 crop year.  This is creating a very compressed planting season again this year. We will do what we always do:  Just get it done and move on.

Grain movement is steady with the current commodity markets at higher, but quite volatile, price levels.  This is due to so much uncertainty in the economy, global conflict, speculation, and just supply and demand.  The conflict between Russia and Ukraine still lingers and has created a lot of the volatility in grain markets.  The very dry conditions in the southern plains of North America and some of the same in South America also contribute to this volatility.  Rail freight had a tough go through the long winter in the Northern Tier of the US and Canada but has mostly recovered at this point.  Hopefully, the freight markets will stay caught up as we clean out bins in anticipation of the crop for 2023.

There is still a fair amount what is now “old crop” grain to move in the country.  We need to get a crop in the ground and look for market opportunities or storage space for that volume.  Our grain handle for the first six months of fiscal 2023 will be up a little as compared to last year by about 4,500,000 bushels, or about 18%, year over year.  The bottom line is, the market demand is still adequately supplied, so until demand improves for both exports and domestic mills, we are in a range bound pricing pattern, up one day and down the next two days kind of trading.  Ending stocks of grain will be a bit lower, but still adequate for the short term.  Keep an eye on new crop 2023/2024 values.  There may be some opportunities to lock in some nice sales to cover the high input costs.

The crop inputs are another story.  Prices hit record highs for fertilizers.  This was in part driven by the grain markets and supply and demand.  Maintaining supply on hand is key again this year with the logistics issues that still exist.  There is still some uncertainty as to what crops will be planted in 2023.  The cash flows for all grains are much better than they were a year ago, with most in positive territory.  How well a crop cash flows is highly dependent on yield potential, so doing what is right for the crop will give you the best chance of profits.  Despite the calendar showing May and we are getting in the fields a little later than we first thought, we are still in a good position overall.  There are a lot of buying decisions that have not been made, so actual demand is a little more difficult to predict.  The trade flows are still much different than what a few years ago looked like but the global supply of inputs is finding its way to the end user.  Having the products you need on hand is important in today’s market, and do not forget about looking ahead to next year.

Refined energy products (gas, diesel, propane) are fair on supply in our region and globally.  Energy prices are extremely volatile, like everything else that affects agriculture.  As a result, looking ahead on supply is more important than it has been for a while.  The supply today is impacted by refinery shutdowns for maintenance or repairs.  We have come off the highs that were a result of the Russia/Ukraine conflict from over a year ago.  Recent pricing has actually been lower than expected for this time of year.  Fuel demand has continued to increase as people are traveling more and we learn to live with the aftereffects of the pandemic.  The past winter use of fuel was higher than expected due to a lot of snow removal and colder than normal temperatures.

Our input business is in good shape with a good supply of fertilizer products on hand and on the farm. Employee shortage and the ability to find new hires is a concern no matter what business you are in. Early indications were that supply would be affected and a lot of customers made decisions early and took supply home when it was available.  The Mississippi river system went from too low to move barges last fall to too high to move barges this spring.  Fundamentally the business is sound and feeling fairly good after six months of the new fiscal year under our belt.  Most product in position is as good as it has been.  We just need to figure out how it will move to the farm in a compressed period.  Grain margins are normal to strong and grain volume is good as we continue to move various qualities of wheat, corn, and sunflowers to market.  There is still not much of a premium value to protein.

Feed sales have again shown a good and sustainable increase year over year.  We continue to offer and develop new feeding programs and markets for our customers to help them be more efficient and profitable.  Watching the recent cattle sales and bull sales this time of year would indicate that there is a lot of optimism in the cattle industry.  With the recent moisture event, there will be green grass as it warms up and we should have some hay to make in June.  Having a good balanced ration for cows at calving can help offset any of the weather challenges that we get every year.  This winter will go down as a record in terms of inches of snow in most of our trade area.  Not sure that record is one to be too proud of, but it happens.  In the feed area, we have almost completed the renovation of an existing fertilizer plant in Lemmon to accommodate our feed grind and mix business.  That system has been tested recently and appears to be a good addition to our capacity to produce grind and mix feed products.  Once we are comfortable with the function of the new mill setup, we will demolish the old wood elevator in Lemmon that houses that business today.

It is time to think about getting pairs on grass.  Making sure your vaccination and nutrition programs are up to par is critical at this stage of the game.  Check with your nearest SWG Feed Sales rep and work with them to understand your plans and they will help you make the best decisions for your operation.  We can solve a lot of problems with nutrition but if animal health products are needed, we have a full line available at most of our locations.  If you have a prescription from your vet that needs to be filled, we can accommodate that at all our locations that handle animal health products.  We have some knowledgeable staff that is continually training to service your animal health needs.  Our partnership with West River Vet Clinic in Hettinger will prove to be invaluable as we work thru this process.  We will fill all VFD prescriptions at all our locations and have the training in place to maintain the necessary records to comply with the FDA regulations.  Let us know what you need, and we will do our best to make it available when you need it.

There is always work to do in and around safety and compliance.  Thanks to our employees for making safety a part of the culture and for maintaining our level of compliance excellence.  Safety is something that we take seriously and will continually work on to get better.  Safety at the farm level is something that should not be taken for granted.  Take the time to stop and think about what might happen or cause an accident.  These things do not need to happen if you just stop and think about safety first.  During the busiest times of the year especially, it should be talked about daily and each of you should have a plan in place.

The patronage payments were sent out a few weeks ago.  Earlier some were paid electronically for those who signed up for ACH and the balance were sent in a hard copy check.  Patronage rates will cycle with the commodity markets, so it is important to look at them for a longer period to time and not just one year.  This business, like farming and ranching, is not a one-year deal.  We are in this for the long haul.  We will be here to help our customers remain profitable on the farm and ranch, because without that, nothing else really matters.

This is an ongoing reminder related to equity retirement.  Any requests for equity retirement, either for age or estate, require a form to be filled out as these requests are not automatic.  You can contact our central office, and we can help you with the necessary forms to get this doneAlso remember that the age requirement is currently at age 70, so please plan and get the request submitted. Talk to your relatives, friends, and neighbors who are out of the area, so they are aware of the process.  They simply need to call us, and we will check on the equity balance, see if it is eligible, and send the necessary forms for the request.

As always, thank you for your continued support of the cooperative system, and for putting your trust in our people locally and our company.  The cooperative system needs to focus on efficiency and doing what is right for the customer.  The success of your cooperative is not about any one person or event, but a true team effort.  Please feel free to contact us with any questions, suggestions, or concerns.  Sometimes the little things are what matters and communicating those helps us get better.

Remember “Do it Safe by Choice”.

I will leave you with this quote:

“You must find the courage to leave the table if respect is no longer being served”

Delane Thom, Regional Manager

Mineral in Cattle is the Foundation to a Healthy, Profitable Herd

Sarah Thompson

Zinpro Performance minerals offers a trace mineral package called Availa 4. These Research based trace minerals have the highest absorption rates on the market. The 1:1 mineral to amino acid complex bond makes this a unique and very effective mineral. This bond is stable in the rumen and cannot be tied up by antagonist like sulfur in our water or molybdenum in your forages. Once these minerals reach the small intestine the 1:1 bond is easily broken down and absorbed into the blood stream and quickly gets to work. Benefits of Availa 4 mineral are…

1. Reproduction: Calving is a very stressful and nutritionally demanding time for cows. You as producers can only make money if our cows breed back in a timely manner. By offering a Availa 4 mineral program you are providing your cattle with quality micro and macro minerals along with vitamins that are important in reproduction. When cattle are mineral deficient you will see decrease conception rates and shave more 2nd and 3rd cycle calves and some cattle may need back at all.

2. Healthy Immune System: Cattle that are offered a Availa 4 mineral program with highly bioavailable trace minerals have quicker more effective response to vaccines which yields stronger immune system to fight off illness.

3. Hoof Health: In the past few years we have seen a significant amount of hoof rot cases during the summer on pasture. Zinc and iodine are very important in hoof health and skin integrity. Many producers suffer financial losses with summer foot rot cases.

Having adequate Availa zinc in your mineral can help decrease cases of hoof rot. This in turn saves money by having less treatment cost and less time spent treating. Keep the hooves healthy, keep them moving throughout the pasture, grazing, and breeding.

Things to be aware of…

Salt Content: Salt in your mineral is not always a bad things but paying high dollar for mineral that contains 25% salt is not necessarily doing your cattle or your pocket book any favors. We recommend offering salt separately, so your cattle are not over consuming your mineral just to get their salt requirements filled. Salt is often used by producers to control consumption. I understand your frustration when your cattle are overeating mineral day after day and all you can see is your money disappearing.

If you decide to mix 50% mineral with 50% salt remember you are diluting the minerals and vitamins your cattle need. So, if your mineral has a 2-3oz feeding rate your mineral/salt combo feeding rate should now go up to 4-6oz per day giving them 2-3oz of mineral and 2-3oz of salt.

Price vs Cost (The price is what you pay per bag or ton when you pick up your mineral vs the cost which is what it cost you per head per day to provide it to your cattle)

Example: Summer Mineral Ultramin Elite 12-3+ Prices & Mineral Options will vary by location Price = $34.44/50# =$1377.60/ton (feeding rate is 2-3 oz/hd/day)
50 pounds = 800 ounces
$34.44 divided by 800 = $0.043/ounce of mineral
2-3 oz/hd/day = $0.086 – $0.129/hd/day

Example: Brand X
Price = $32.56/50# = $1302.40/ton (feeding rate is 4 oz/hd/day)
50 pounds = 800 ounces
$32.56 divided by 800 ounces = $0.041/ounce of mineral
4 oz/hd/day = $.164/hd/day

Not all minerals are created equal and there is not a mineral available on the market that will fit your cattle’s need every season of the year. If you are noticing your cattle either overeat mineral or not at all, please reach out and we can work together to make adjustments to level them out. Let us help you provide mineral to you cattle without breaking the bank!

Sarah Thompson, Field Consultant Lemmon Terminal

Ready to Serve You!

Jeremy Imhoff

Greetings from everyone at the Elgin Southwest Grain location. I hope everyone is well and staying safe in these unprecedented times. It looks like it is finally going to be spring. After the long winter, I think everyone is ready for some sunshine and warmth. We received plenty of snow this winter and maybe we will get a little more rain this spring, but with that said, we should have enough moisture in the ground to get us started. It looks like it will be a little later start to planting, just like last year, but I think we will get the crop in the ground quickly when it finally warms up.

With that said, we are ready to serve you with all your spring planting needs. We are filled up with all dry fertilizers and our blender is ready to go to work for you blending any mix you want. Just a little refresher, we carry Urea, Mesz, AMS, and Potash in bulk here on location. We also offer dry fertilizer delivery to the yard or field. In addition to that, we have four anhydrous plants in the surrounding area to serve you too. Here are the locations: right at the Elgin airport, right outside of Leith, north of New Leipzig, and south of New Leipzig along the highway 49. The supply chain seems to be opening a little more all the time and we are mostly back to normal with the supply of chemicals and fertilizers. Please feel free to give us a call at the office or you can call our Agronomist, Alexis Olson, to answer any of your agronomy questions.

Many people are still in the middle of calving. We have a large variety of ear tags and vaccines on hand. We also have an array of protein and mineral tubs along with different begged. FYI, we still have bulk calf creep and cow cake here on location to be picked up or delivered to the farm. We will have creep and tubs available for bookings for the summer months. We are working on a creep feed booking day, but it has been tough to get something nailed down. If you are interested in booking any tubs or creep before we have a booking day you can give Kristine Koepplin a call or call us here and we can help you with any questions you may have. If you are looking for any millet or sorghum for your haying needs, we have that available too. One last note, we also have some varieties of net wrap and twine on hand to assist you when it is time to roll up some bales.

The last thing I will talk about today is soon it will be time for summer fill for your home heating needs. I know a lot of us are still using our furnaces yet, but a person always has to look ahead. We will start summer fill at the end of May. If you have questions, please call, and talk to Karen. We have a large assortment of oil, grease, and DEF on hand. We have them in packages from quarts to 55-gallon drums. Please stop in and check it out. Lastly, when we dry out here, it will be a shotgun start to get the crop in. Everyone please stay safe and have a great spring. Remember we are here to help with any of your needs.

Jeremy Imhoff, Manager Elgin SWG

CHS reports second quarter earnings

Second quarter net income of $292.3 million in fiscal year 2023 reflects strong energy market conditions

CHS tanker truck at fuel storage terminal

CHS Inc., the nation’s leading agribusiness cooperative, today released results for its second quarter ended Feb. 28, 2023. The company reported quarterly net income of $292.3 million compared to $219.0 million in the second quarter of fiscal year 2022. For the first six months of fiscal year 2023, the company reported net income of $1.1 billion and revenues of $24.1 billion compared to net income of $671.0 million and revenues of $21.2 billion recorded in the first half of fiscal year 2022.

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Energy Division Report

Jim Renke

Hello to everyone from all of us in the Petroleum Department!  As I write this update winter is taking a welcome break with temperatures in the 40’s.  What a difference than this time last year!

Propane pricing remained slightly below last year and currently looks to stay that way for now.  Inventories are more on the upper side of the five-year average vs. last year at this time when they were at the bottom of the five-year average.  For those of you who bought a LP Contract this year, it continues to be a very good value and saving customers a substantial amount of money.

Laurel, Montana is the primary refinery for our local supply.  They will be performing maintenance on the refinery starting the end of March to the beginning May.  The supply output will be reduced during that time period.  Consider visiting with our staff to discuss getting your fuel delivered before the spring rush and avoid the possibility of not getting your product in a timely manner.  Lemmon area customers can call Barb at 605 374-3301 and customers in the North areas can call the Dickinson Energy office at 701 483-5157 or you can call our sales staff:  Jared at 701 260-5235 or Savanna at 701 260-6415

CENEX TOTAL PROTECTION PLAN DETAILS

*The cost of a New and Used TPP warranty is $799 each.

*There are $200 in rebates with warranty activation.

*New Warranty covers 10,000 hours or 10 years of coverage.

*Used Warranty covers 8,000 hours and 8 years of coverage. 

*The equipment Horsepower is 50HP per machine.

Warranties provide excellent value and can ride on top and beyond the OEM’s factory warranties.  If you would like more information on how to protect your farm equipment, please call Jared or Savanna, our Certified Energy Specialists, to go over the program details.

LUBE TRIVIA

Question:  What are the six tasks of your engine oil?

  1. Reduce friction and wear – lubricate
  2. Carry away heat
  3. Disperse contaminants
  4. Protect against rust
  5. Control deposit formation
  6. Resist the attempts of heat and oxygen to change its properties.

Question:  What problems can occur when a bearing is lubricated with too much oil or grease?

Answer:  Higher energy consumption with oil/grease operating temperature, short lubricant life, and thinning oil film thickness.

Question:  What are the main factors that promote chemical degradation of lubricants?

Answer:  Air (oxygen), elevated temperatures, metals, and water.

The whole staff of Southwest Grain Petroleum would like to thank you for all your support in the past and look forward to working with you into the future.

Thank You,
Jim Renke, Manager Energy Division

Rumensin to Cows!

Heather Dykins

It has been a while since I wrote about Rumensin and it is something that should not be forgotten in our cow mineral and the benefits it provides.

Supplementing Rumensin will not only help in the calves’ diets, but it also improves feed efficiency in the cows’ diets.  By improving the feed efficiency, it can decrease your hay use by 10-11%. Feeding Rumensin 2 weeks prior to calving suppresses the cows from shedding the cocci within their manure. The prevents the baby calves picking it up in the environment.  All it takes is one oocyte cell of cocci ingested by a baby calf for them to break with cocci.

Rumensin causes a shift in rumen bacterial bugs which increases the population of the good bugs.  If the bugs are happy, the cow is happy!  Rumensin fed at 200 mg/head/day will add 0.2 lbs/head/day to your ADG.  So, do not be worried what Rumensin will do for your herd because the benefits are endless.

Rumensin is the ONLY approved ionophore for use in mature beef cows that can kill coccidia at three different stages in their life cycle.  This is more effective at a lower dose compared to other ionophores on the market.  If this sounds like something you would like to add into your program, call me or your local SWG and we will get you set up!

Thank you for your business!

Heather Dykins
701.320.8947

Grain Division Report

Brian Fadness

Of the major commodities, spring wheat saw the most activity recently.  With little fundamental news available, investment money is the source of the futures movement.  Spring wheat futures have been range bound between $8.85 and $9.40 since the end of December.  Expect more of the same until a move above $9.40 can be maintained.  This would open the possibility of testing $9.50.  Keep cash sale targets in mind.  You can take action on those targets by turning them into offers that will automatically trigger a sale for you when your price target is hit.  This is a great way to reduce some of the stress of marketing.  Kayla and I would be happy to help you establish your offers!  New crop pricing should be considered too.  Quietly, Minneapolis December futures have crept back to $9.00.  This is a good place to start new crop sales and scale up with offers.  Hedge-to-arrive contracts are a good fit for marketing new crop.

Adding corn to our handle at New Salem went very well and we thank you for supporting our effort!  Corn demand remains dominated by the interior market as the US export program has not found any life.  Writing an HTA around $6.00 December futures would be a good place to start marketing new crop.

The US soybean export program has ground to a halt with South American soybeans taking the focus of world demand.  Starting new crop soybean sales at $14.00 would be ideal, but with $.55 of downside risk from the current Nov futures price of $13.85, the risk-reward points to this being a great price to start at too.

Cash offers were mentioned as part of a spring wheat marketing strategy, but these can be utilized in corn and soybeans too.

Brian Fadness, Grain Division Manager

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