Good morning.
We all know October is the time for ghosts—but ghost cattle are the ones in the headlines today.
Cody Allen Easterday, a rancher in Washington state, was sentenced to 11 years in prison last week for his role in conjuring up cows that didn't exist—then raking in the profits.
The beef between Washington and Easterday all started after investigators discovered he had been submitting fraudulent invoices for what was supposed to be the feeding costs for hundreds of thousands of cattle. The only problem? Those cows didn't exist.
It was a sprawling scheme that brought in $244M over a roughly 4-year period. Now that's a spooky amount of fraud.
Stories:
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BanksPhotos from Getty Images Signature
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Drought’s bringing barges to a halt on southern stretches of the dehydrated Mississippi River, where bottlenecks and backups are stymying shipments of critical commodities.
This new supply chain snafu is showing up due to a dry summer, and is expected to hurt farmers and food prices alike.
The shipping snarl is kind of a big deal: 60% of U.S. corn, soybean, and wheat exports set sail from Gulf Coast ports off of the Mississippi River.
But how bad is it? 1,600 barges are waiting to pass through Lake Providence, La. Meanwhile, Stack Island, Miss., and Memphis, Tenn., are also seeing logjams. Since Sept. 1, 40% fewer barges have been unloaded in New Orleans.
In response, the U.S. Army Corps of Engineers is dredging parts of the river. But without substantial rain, future shipping remains at risk approaching the busiest grain export period of the year.
Costs rise: As the waterline sinks, the price to move goods rises. The St. Louis barge rate for export grain is up 95% from the five-year average. And those set on sailing are reducing the cargo load per barge so they can sit higher on the water.
Companies are paying a premium to switch from transport by barge to rail and truck. The cost of this can be up to five times more.
How low will it go? In this much less fun game of limbo, all eyes are on the skies to see how parched the river will get. So far, there’s no relief in the forecast.
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→ Get a look at the land. AcreTrader is launching a new land analysis platform, where people can get access to 10+ layers of data about 150M U.S. land parcels, including soil and crop info, satellite imagery, and more.
→ Wrangling weeds. Throughout the Midwest this year, weed control was "the talk of 2022," with many farmers struggling to keep up, often amidst cutbacks on inputs and dry weather conditions.
→ Equipment expansion. Stratview Research released a report that says the ag equipment market is expected to reach $226.79B by 2028—which would be a 6.1% bump in market growth from this year.
→ Not so eggs-cellent. For the third time this year, egg prices have reached an all-time high, this time hitting $4.18/dozen—well above the 5-year average of $1.45/dozen.
→ Checks are clearing. As part of one of the biggest scope 3 emission reduction pilot programs, Corteva has started delivering initial payments to farmers on 1M acres throughout the U.S.
→ The perfect avocado (market). A new Texas A&M report found that the importation of Mexican Hass avocados has added a record-breaking $11.2B to the U.S. economy.
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Roomba Goes Rural - Autonomous Ag Equipment |
Look Ma, no hands: In the ag equipment market, the future is autonomous. Like Babe Ruth calling his shot, manufacturers are putting out their estimates for their fully autonomous equipment to hit production lines.
For John Deere, that’s 2030—which means 8 years to swing for the fences.
🎵 Whoa, we’re halfway there: Automation is no new thing for farmers. Many tractors, combines, and sprayers boast impressive GPS systems with miniscule margins of error.
However, FULLY autonomous (no people involved) equipment is a new challenge. Most current systems require the operator in the cab.
Earlier this year, John Deere revealed the new 8R model at the Consumer Electronics Show in Las Vegas. The machine is piloted by artificial intelligence, six pairs of stereo cameras, and a powerful neural network to classify what those cameras "see."
🎵 Whoa, living on a sprayer: Meanwhile, AGCO (makers of Massey Ferguson and Fendt) are taking a different direction. They’re looking to own the retrofit marketplace—bringing automation to farmers’ existing fleets.
Instead of having to upgrade an entire fleet of equipment, farmers can "add on" the tech they want.
Soundbite: "We’re at a stage we call supervised autonomy, where we still have someone in the cab of the machine. The buzz is around fully autonomous operations, but where farmers are willing to pay for automation is feature by feature." - Seth Crawford, senior vice president and general manager of AGCO’s precision agriculture and digital division.
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ICYMI, World Cotton Day was Friday, October 7. This was the third year for World Cotton Day to celebrate the global commodity grown in more than 75 countries and on five continents.
Can you rank the top four cotton-producing nations in order?
- Brazil
- China
- India
- United States of America
Answer at the bottom of the email.
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🎵 "It’s harvest time in this little town, Time to bring it on in, pay the loans down…" 🎵
Luke Bryan’s lyrics ring true this time of year, especially as farmers bring in one of their most expensive harvests.
We don’t need to remind everyone (okay, we will anyway), but inflation this year, along with the war in Ukraine and global weather events, have raised input prices on everything from fuel to fertilizer.
And while farmers harvest this year’s costly crop, more than 50% are already worrying about how expensive fertilizer will be next year.
Fertilizer fiasco: We won’t rehash all the details, but the Russian invasion of Ukraine in February exhausted tight conditions for the global fertilizer supply, causing prices to hit record levels in March.
Fertilizer, one of farmers’ most expensive inputs, relies heavily on natural gas for its production.
ICYMI: Natural gas has proven extremely volatile, so we can count on fertilizer prices to stay high for a while.
And there was a hurricane: Ian caused "modest damage" to Mosaic phosphate fertilizer facilities in Florida. They’ll have the damage repaired within two weeks, but production could be reduced by 250K metric tons in upcoming months.
Mosaic produces nearly half of the phosphate fertilizer in the U.S.
The good news? DTN reported for the fourth consecutive week that no fertilizers experienced dramatic pricing swings. Five of the eight major fertilizers were slightly lower. Three fertilizers were slightly more expensive (urea, anhydrous, and UAN).
Data from September 2021 vs. September 2022 shows a price increase of $72/acre for fertilizer costs for corn and an increase of $25/ton for soybeans.
Fertilizer frugality: It’s a no-brainer, but farmers can limit/eliminate applications by soil testing and only applying where needed.
Soundbite: "Phosphorus and potassium applications can be reduced or eliminated if soil test levels are sufficiently high," a report from the University of Illinois and the Ohio State University said. "Significant uncertainty exists concerning fertilizer prices moving into the spring."
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Written & Edited by Aaron Dunajeski, Amelia VanLandegen, Ashley Scoby, and Travis Martin
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