🚚 The Grain Bin Frenzy

Good morning.

If you can believe it, it’s the last Friday of January. Also, if you can believe it, there's an Israel-based startup making flying fruit-picking robots. The video is fascinating.

On today's agenda:

The Grain Bin Biz
Whoa, ADM
Ag E-Commerce Drama

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Grain bin manufacturers and contractors will be rolling up their sleeves for the foreseeable future.

“On-farm storage demand is through the roof,” noted Nathan Luff, a Sukup/Brock dealer in Missouri. His take reflects industry vibes that demand this heavy hasn't been seen in 10+ years.

How we got here: With the price of corn and soybeans soaring to recent highs and a solid 2020 harvest for most, many farmers are flush with money and are looking for a place to stash that cash. Hello, grain storage.

But it’s not just corn and soybean farmers who are driving demand...

Wheat prices are up.
Rice farmers had a strong production year.
Even pistachio growers, who are experiencing record production, need - you guessed it - grain bin components.

And that’s not all. When the derecho ripped through the Midwest last August, it damaged or destroyed 120 million bushels of grain storage in Iowa. Bin builders are playing catch up like mad.

Add in strong export demand from China and commercial grain traders are begging for more storage, too.

Bottom line: With dealers booked solid through late summer and demand funneling from all corners of the industry, wildly long waitlists will become the 2021 norm.

→ Out of ink milk. Researchers at the University of Wisconsin Platteville are experimenting with dairy proteins as a material to be used in 3-D printing.

→ Tapping the brakes. The Biden administration yanked back a proposed rule allowing poultry processing plants to increase line speeds from 140 birds per minute to 175.

→ Not cool, Mother Nature. The National Oceanic and Atmospheric Administration reported that 2020 piled up a record 22 different ‘$1 billion’ weather disasters, many impacting agriculture production.

→ Farmers can take a breather. The USDA announced a temporary suspension of debt collections and foreclosures across a variety of FSA-administered programs.

→ No Fly Zone. Producers, many in the Mid-South, are concerned about a lack of H-2A guest workers available after a pandemic-related travel ban added South Africa to the 'suspension of entry' list.

Happy hour came early on Tuesday for Archer Daniels Midland with an epic 4th quarter earnings announcement.

The U.S. agrigiant noted revenue jumping 10.1% to nearly $17.98 billion while profits soared +36%. A shaky 2020 ended on a high note for the company despite lingering pandemic market dynamics, volatile commodity prices, and a mischievous Mother Nature.

So what led to the big gains?

→ Record-speed soybean processing crushed volume expectations while margins flexed.
→ Record-large U.S. crop exports [China wants all the corn] were very positive for the grain trader.
→ Record-high hand sanitizer sales plus the quarantine baking trend boosted the carbohydrate segment.

Talk about record-setting…

What’s ahead: ADM sees more green in its future. CEO Juan Luciano feels bullish, noting, “Based on the continued delivery of drivers under our control and improving market conditions as the year progresses, we expect strong growth in segment profit and another record year of earnings per share in 2021.”

It’s not every day that startups get access to 25% of their target customer base…

But that’s where the Beef Alliance steps in.

For their 2021 Beef Alliance Startup Challenge, the goal is simple: bring creators (you, the startup!) and customers (feedyards) to the same table to scale high impact solutions at rocket speed. 🚀

What’s on the line? It’s simple:

$50K case prize
Opportunity to pilot your product with the Beef Alliance
Networking with potential investors

So, are you working on the next animal health or nutrition product? Building a livestock monitoring tool? Cranking out software for environmental management? All that and more applies.

If you fall in these buckets, it’s a no-brainer. Apply here by February 15th.

The battle at the intersection of ag retail and e-commerce has been heating up. And now it’s boiling over into the courts.

In early January, an Illinois farm family filed suit against a ‘who’s who’ of crop input manufacturers, distributors, and retailers claiming collusion. Those in the hot seat include Bayer, Winfield, CHS, Nutrien, and many other notable farm input giants.

The key claim: The ag defendants banded together and boycotted online sales platforms, like Farmers Business Network, to avoid price transparency and lock in high prices with cozy profit margins.

Where this goes: E-commerce drama and the ag input stratosphere are old pals. Time will tell where this most recent litigation will land.