SHOCK Survey! 70% of Farmers CAN'T AFFORD Needed Fertilizer

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Rising input costs are squeezing US farmers as fertilizer and fuel prices surge following the closure of the Strait of Hormuz. A recent Farm Bureau survey shows 94% of respondents say their financial situation has worsened or stayed the same compared to last year — with smaller operations facing the steepest challenges.

Wheat futures pushed sharply higher Tuesday on deteriorating crop conditions across the Plains. Hot and dry weather has taken a toll, with 54% of Texas winter wheat rated poor to very poor, and Oklahoma close behind at 48%. HRW wheat country is expected to stay dry for at least another 7-10 days.

Tensions between the US and China are heating up, with Treasury Secretary Scott Bessent accusing Beijing of hoarding oil amid the ongoing Iran conflict. China has yet to purchase a single bushel of US soybeans for new crop delivery, despite earlier talk of major long-term commitments.

On a more bullish note for South American supply, Conab raised its outlook for Brazil's soybean crop to a record 179.15mmt, with exports also revised to a record 115.4mmt.

Optimism about peace talks sent crude oil tumbling nearly 8% Tuesday, settling around $91/barrel, with WTI trading near $92.50 early this morning. The Nasdaq jumped 2% and the S&P 500 gained 1.1% on hopes that Iran negotiations could resume within days.

The USDA also reported flash sales Tuesday—316,000mt of corn to Mexico and 120,000mt to unknown destinations.

Transcript

Joe is Sick / Tax Day

SPEAKER_01 0:08

Morning guys, it's Wednesday, April 15th, 5 24 a.m. Central Time. I am dying of a cold. I'm sorry. I sound terrible if I say something stupid. That is my excuse. May Corn Futures up four cents at 447. May Soybeans up 5.5 at 1163 and a half. May Chicago wheat down four and a half at 587 and a half. May uh Kansas City wheat down four and a half cents at 618 and a quarter. May Spring wheat is unchanged at 638. Mackenzie, it's tax day. Did you file your taxes?

SPEAKER_00 0:35

I sure did. Did you?

SHOCK Survey, Fertilizer

SPEAKER_01 0:36

I did. Um, I'll tell you guys something. I've been a small business owner for many years now. And if you are younger, uh pay up for the good CPA or accountant. It's absolutely worth it. If you have a really good CPA, it makes your life very, very easy. If you have a not so great CPA, it can make your life absolutely miserable. Okay, let's go to our first story. Uh shocking survey from the Farm Bureau out yesterday.

SPEAKER_00 0:58

Right. So the survey found that rising fertilizer and fuel costs triggered by the closure of the Strait of Hormuz have put increased financial strain on U.S. farmers with impacts varying by region. Midwestern farmers are relatively insulated from fertilizer price increases due to higher pre-booking rates, while producers in the South, Northeast, and West face greater exposure due to fewer securing fertilizer purchases ahead of the season. Smaller farms remain particularly vulnerable given their lower pre-booking rates compared to larger operations. 94% of respondents reported that their financial situation has either worsened or remained unchanged from last year, with only 6% indicating improvement.

Wheat Rally, Serious Drought Problem?

SPEAKER_01 1:41

Farm Bureau had a bunch of very good charts that we're going to look at here in a second. However, the first, this headline, 70% of farmers can't afford all fertilizer needed. This would appear to be in direct contrast with what Brooke Rollins uh told us uh just a week or two ago. About 80% of farmers locked in supply last fall. Okay. Uh this survey, I wonder what their survey response rate was. It doesn't say. Uh, but they had 5,700 farmers respond to the survey, which was conducted April 3rd through April 11th. So um this should include a great deal of the Iran situation and everything that took place after that. Let's look at some charts. Percentage of farmers who pre-booked fertilizer. Uh the Farm Bureau believes, based on their survey, that only 67% of farmers in the Midwest uh pre-booked fertilizer, 31% in the West, 19% in the South, 30% in the Northeast. Um, I've heard a lot of things and differing opinions and ideas on this. These numbers feel very low to me uh personally. I I've been told through a number of channels that in the Midwest it's probably closer to like 80%, but that maybe they're closer to reality, closer to reality in the West and in the South. I still think these numbers are too low personally. But you guys tell me what you think. I mean, I didn't I didn't run a survey on this, so um, this is this may be the best data that we have as of right now. Fertilizer pre-booking by commodity. Um, if you look at corn, let's say 71 or 72% uh pre-booked in the Midwest, but then much lower in other areas. Um, that would be the big implication here, I think, if anything, is that the the urea situation, the nitrogen cost, would result in a lower corn acres or perhaps down the road, lower corn production if the fertilizer was not applied at a normal rate. It uh it could make things very interesting. It could make for yet another uh acreage surprise from USDA later in the year. Share of farmers unable to afford all fertilizer required. And I wonder exactly what that means, all fertilizer required. Like, did you get 99% of your fertilizer bought, but you don't fit the criteria here? I don't know. But of corn growers, 66% were unable to afford all fertilizer required. Percentage of farmers, farmers unable to afford all fertilizer uh needed, pretty high. I uh I struggle. I'll tell you what what is is most often like the best sign of things for me when it comes to anything, is what the market's doing. And the corn market right now is not telling you that this is a problem. That doesn't mean it's right. The market I've seen the market be wrong about stuff like this before, but the market, you'll get a corn market, these corn's at 474. It's not telling you that this is a problem. Uh by farm size, of course, it kind of looks like bigger farmers did a little bit better in uh getting their needs covered, which is not surprising. So I don't know. Again, we'll go back to this. Let me know what you let me know what you guys think. You can email me, info at standardgrain.com. You can uh drop something in the YouTube comments. We'd love to hear just your location, uh, what you've heard, uh, pricing, availability, all that stuff.

SPEAKER_00 4:34

Wheat futures were sharply higher yesterday amid deteriorating crop conditions. The May 26 Chicago wheat contract gained nearly 10 cents to close at 592 per bushel, while the May Kansas City wheat contract climbed roughly 20 cents to close near 623 per bushel. Persistent hot and dry weather across the U.S. plains has intensified concerns about potential yield losses. In Texas, 54% of the winter wheat crop is rated poor to very poor, with Oklahoma close behind at 48%. Weekend rains across the plains fell short of expectations. The near-term forecast is also unfavorable, especially for western HRW wheat areas that are expected to remain dry.

Bessent, China, Soybeans

SPEAKER_01 5:14

I'm gonna repeat what I said yesterday about uh the HRW crop and the ratings because it bears repeating. Kansas, Oklahoma, Texas, Colorado, and Nebraska are the five largest growers of HRW wheat in the U.S. The average rating of these five states is 17.4% good to excellent and 45% poor to very poor. Um, the forecast, or let's go back, here's the last 30 days of precipitation versus normal. This is from our friends at Crop Profit. Uh no rain in a lot of areas and um 10 to 20% of normal. So you're talking like trace amounts of rain if they caught anything in a lot of these areas of uh western Kansas, eastern Colorado, Texas, Oklahoma, Panhandle area. Um, and it it lines up very much. So if you look at this map on the right, that that dark green stuff over Kansas, that's a super high production density area, and it's gotten dry, and it looks to remain dry. There's nothing here in the forecast during the next seven days. The GFS, the Euro are in agreement this morning that the next week is going to be dry. Where it gets wet, perhaps, is next weekend, Thursday, Friday, maybe you have some rains return. But I'll tell you what, we've seen these rains forecasted in the extended period for the last two or three weeks, and they've all failed to materialize. So if that uh continues to happen, you could have yourself a hell of a move in the wheat. And a rally in wheat could uh help to lead corn out of the doldrums. It could help to lead soybeans out of the doldrums. Um, I know the wheat supply and demand situation, it's not great. We're oversupplied, but uh this HRW thing gets bad enough, it could be it could be uh something good for a lot of our markets. To look at the radar this morning, uh this is more Corn Belt specific. You got some rains over uh parts of Iowa, parts of Illinois, and the forecast looks pretty wet. You got more rain coming back this weekend. So again, I'll use the phrase planting disruptions. Planting disruptions are occurring. It's far too early. It's April 15th, far too early to call them delays, but they are disruptions. And if they continue, uh, that's something we are going to have to uh monitor and discuss.

SPEAKER_00 7:10

On Tuesday, U.S. Treasury Secretary Scott Bessent accused China of being an unreliable global partner, claiming that Beijing is hoarding oil as the Iran war disrupts global supply. When asked whether the dispute could affect President Trump's planned mid-May visit to Beijing, Bessent declined to comment. Instead, he emphasized that Trump and Xi Jinping remain in regular communication with uh, excuse me, the U.S. blockade of the Strait of Hormuz could further escalate tensions as China is a major buyer of Iranian oil.

SPEAKER_01 7:43

Okay, so we're concerned about the China relationship, of course, because of soybeans. China has officially, based on USDA data, purchased 11.5 million metric tons of U.S. soybeans for current marketing year delivery. And they had agreed essentially to 12. So we'll we'll say that they're there. They've uh taken delivery of almost all of them. Only 2.2 million metric tons out of that 11 and a half were unshipped through last week. However, China has not bought a single bushel of new crop U.S. soybeans, despite um chatter on both sides, that they would buy 25 million metric tons each year for the next three years. And typically to hit that sort of target uh during a marketing year, they need to pre-buy ahead of the marketing year. And they would typically buy in the spring, it'd be March, April, and we haven't seen any purchases yet. So uh that's something that we very much uh need to see and uh would like to see in order to keep the soybean market supported.

SPEAKER_00 8:32

If you guys have not checked out our premium content, you sure need to do so. Yesterday I did our monthly cattle outlook video with Ross Baldwin. We covered um the record high futures and cash cattle prices that we've seen. We've covered, we covered beef demand, new world, screwworm, uh the fun position, everything that pertains to the cattle market. We went over um this information is fantastic. Ross does a great job.

SPEAKER_01 8:54

You guys did 30 minutes on cattle yesterday.

SPEAKER_00 8:56

We did, and it was interesting the whole way through. I mean, every video was interesting, but especially this one, obviously, because it's cattle. But Ross is just fantastic. The information is second to none.

Brazil Soybean Update

SPEAKER_01 9:05

If you wanted me to do a cattle video, it'd be about 30 seconds long. That's that's that would be the the amount of information that I would have for you. Guys, we pitch the premium subscription every day, and I'm gonna tell you this about it. Most of the products that you buy for your operation, the money goes into back to a handful of massive corporations. There's not really much you can do about this. What we do here is totally independent. We're not a big company, we have no shareholders. The only people that make this show available uh to you guys on YouTube and on the podcast is the premium subscribers. So, you know, a lot of the way that that you spend money, it kind of tells a tale about what you believe to some extent. If you like this show and you like what we're doing here, and you like the idea that there is a non-biased, uh non-corporate uh media outlet out there that you can listen to every day, you should sign up for the premium deal. Not just for that reason. The the info is gonna, you're gonna love it. If you like what you're watching here or listen to here, you're gonna love it. But support independent media, guys. I promise you, you guys will love the premium stuff if you check it out. Uh, you can go to standardgrain.com. I know you guys are busy. You're incredibly busy. I can tell from uh our text messages and emails, things just slow down this time of year. Sign up on your phone, take you 30 seconds. You'll be listening to our stuff uh in the tractor or in the truck, uh, you know, a minute after that. Well, I'll forward you a copy of this morning's email. You should absolutely check it out. It's 50 bucks a month, cancel at any time. No other fee, no other obligation, nobody to try to sell you anything else. Give that deal a shot this morning, guys.

SPEAKER_00 10:32

Conab raised its outlook for Brazil's soybean crop yesterday. The agency estimates the 25-26 crop at a record 179.15 million metric tons, up from its March forecast of 177.85. Soybean exports were also revised higher at a record 115.4 million metric tons. Conab increased its estimate for total corn production to 139.57 million metric tons, and corn exports were left unchanged.

Iran Update / Stock Market

SPEAKER_01 11:01

Let's uh look at some big picture soybean stuff. We talked about the Safrina corn crop yesterday, I believe. So if you guys want to look at weather maps and stuff, uh go back and watch yesterday's video. Brazil is at 180 million is USDA's number. Conab's a little lower than that, whatever. Um, that's 42% of all global soybean production. It's pretty phenomenal. The US is is uh a distance second in terms of production. Brazil is the largest exporter by a wide margin, 61.4% of all global exports at 115 million metric tons. The US again, a distance second at 42 million. And if you look at the trends here in soybean exports, I could have done the chart would look very similar for production, but Brazil continues to grow and grow and grow and grow. And the US was kind of flat for a while, and now we're actually shrinking. So um it underscores the importance of the RVO news that we've seen recently of the crush expansion of the idea that we're using more soybean oil for biofuel because we desperately need all of those things.

SPEAKER_00 11:54

On Tuesday, President Trump said peace talks aimed at ending the Iran war may restart within the next two days in Pakistan. The announcement sent crude oil prices tumbling, with U.S. crude falling nearly 8% to settle around$91 per barrel. Optimism carried over to Wall Street, with the NASDAQ rising 2% and the SP 500 gaining 1.1%, approaching approaching a record high. Tensions, however, remain elevated as the U.S. enforces a blockade of the Strait of Hormuz in an effort to restrict Iranian oil exports. Iran is reportedly considering a temporary pause in shipments through the strait to avoid further escalation and preserve the possibility for renewed negotiations.

Flash Sales

SPEAKER_01 12:40

I believe Trump was chatting overnight again this morning about a possible end to the war. The back and forth is excruciating and exhausting. I'm I was happy to see yesterday the grain markets were kind of able to divorce themselves from this uh to some extent. We've talked about crude oil a lot. Let's talk about the stock market. This is pretty uh phenomenal stuff. The SP 500 was uh damn near at an all-time high yesterday, half a percentage point from uh an all-time high at the close. We've now rallied 9.3% during the past three weeks. We're up uh almost 2% year to date, up 29% over the last year. This is all despite the fact that gas prices have risen by what, 25-30%. Um, Q1 earnings, we're in the we're in the middle of earnings season, but stuff has been pretty good. The uh what what I have heard and have read is this the high gas prices are a big deal for maybe the bottom 25% of the population in terms of finances, economics, uh wealth, whatever. For the upper three quarters, people are still kind of spending the way that they have been spending, and the higher gas prices have not impacted them. And this is a frustrating trade if you're a if you're a stock market bear. And it it very rarely Paris pays to be a stock market bear over time. But if you're a stock market bear, you're looking at this. Oh my gosh, inflation, higher crude, and the stock markets at all-time highs. It's uh it's pretty unbelievable, but it tends to climb a wall of worry as we've discussed in the past.

SPEAKER_00 13:58

We saw multiple flash sales yesterday. U.S. exporters sold 12 million bushels of corn to Mexico. Of the total, 3 million bushels is for delivery during the 25-26 marketing year, 5 million bushels is for delivery during the 26-27 marketing year, and 4 million bushels is for delivery during the 27-28 marketing year. And then exporters also sold 5 million bushels of corn to unknown destinations for delivery during the current marketing year.

SPEAKER_01 14:22

We love Mexico. They've been our best friend when it comes to uh corn exports and they continue to buy, and it's absolutely fantastic. What did cattle do yesterday?

SPEAKER_00 14:28

Cattle futures climbed to record highs yesterday. Live cattle were a buck oh five to two ninety higher. Feeders saw gains ranging from a buck forty up to two fifty. Box beef prices were mixed. Choice was up 128 at 383.20, while select was down 384 at 379.80.

SPEAKER_01 14:42

I'll call the outside markets relatively quiet this morning. Stocks are off just fractionally, treasuries are mixed, US dollars up a little bit, crude oil is up a dollar eighty five, and the may WTI 93.15. Again, kind of reflecting the um risk. Or I guess the war is over for today, but it might be right back on an hour from now. I don't know. Everybody have a uh wonderful day today. We'll be back on Thursday.