This interactive edition of the CFS customer newsletter allows our member-owners and others to get up-to-date information on local agricultural information in a timely manner.
CONNECTIONS FALL/WINTER 2024
CFS ANNUAL MEETING NOTICE
DATE: JANUARY 21, 2025 TIME: 12:00 AM TO 3:00 PM PLACE: NASINEC EVENT CENTER 3789 BUSINESS PARK DR. WELLS, MN 56097
The CFS Board of Directors election will be held online this year - no paper ballots will be sent. If you are a qualifying voting member. Instructions will be sent by mail or email, please provide/update your email information through the CFS app or send it to: speterson@cfscoop.com. I nclude the following details: Your CFS customer number(s) The account name email address and phone number
Thank you!
CFS TOWN HALL MEETINGS
RSVP FOR EVENTS
CFS will host two Town Hall meetings this winter. These informal events include presentations from our core business team leaders, who will share vital information, including a recap of the past year and future plans. They will also be available to provide additional insights and answer your questions.
Use your phone’s camera to scan the QR code below then click on the link, go to https://forms.office.com/r/28nidhc7kB, or call Stephanie at 507-475-3328
Date: January 20, 2025 Time: Noon Place: Cabela’s 3900 Cabela Drive Owatonna MN 55060
Date: January 22, 2025 Time: Noon Place: St. James City Hall, 1205 6th Ave S St. James, MN 56081
PROJECTS AND IMPROVEMENTS ACROSS OUR LOCATIONS
St. James Feed Mill CFS built a new state of the art feed mill in St. James and removed the old mill.
CELEBRATING A SUCCESSFUL YEAR AND EMBRACING NEW CHALLENGES August 31st, 2024 marked the end of another fiscal year for CFS. I am happy to report that we had another strong year for our cooperative. This success is due to our great members, customers, and employees. We recognize that our achievements are only possible with your support and patronage. Thank you for helping make 2024 another very successful year in the history of our cooperative. As we look ahead to the new fiscal year, we are already a month in and recognize the challenges that exist. Whether it is input costs, livestock, or grain prices, CFS remains focused on helping our customers balance risks while maximizing profitability on the farm. This can only happen by working together and always communicating. Transparency and trust have never been more important for your and our operations. I guarantee that our team is dedicated to serving your needs each day! Over the past year, we worked on many projects at multiple locations. We were also busy with several demolition projects across our footprint. Major projects include finishing the grain bin in Randolph, the feed mill in St. James, and the chemical and seed storage in Clarks Grove. These projects have been completed to help improve efficiency at our locations. As we are now in October, we have plenty of reasons to celebrate National Cooperative Month. Conducting business with a cooperative is different than with a private or corporate business. In doing business with a cooperative, profits are returned to the members whether in equity, cash, or facilities. All of these positively impact our members and customers, and we are proud to participate in the ag industry. Thank you for your continued support of CFS. Your business is truly appreciated, and we are extremely grateful for your confidence in us. We will do our part to meet or exceed your expectations every time! I would also like to thank the dedicated CFS employees for what they do each and every day! They are second to none. Our success would not be possible without everyone working together! Finally, please be safe during this harvest season. Take a few extra minutes to work safely in your fields and at home. Safety is always well worth the time. Wishing you all the best with your harvest and the year ahead.
Randolph Bin
CFS added a 690,000 bushel bin for bean storage and also to aid in mix and blend opportunities.
MN Lake Woodhouse
Removal of the old woodhouse in Minnesota Lake. CFS placed a new scale and office at this location and business continues.
Clarks Grove Warehouse
A 40,000 sq. ft heated warehouse was constructed in Clarks Grove to store crop protection products and seed. CFS also added 130,000 gal bulk crop protection storage in containtment and two independent load out stations.
Wells Fertilzer Warehouse
Cooperatively,
Merlyn Kruger Merlyn Kruger, CEO
Demolition of the old fertilizer warehouse at the Wells Agronomy site.
EXTREMES REFLECTIONS INNOVATIONS and KC Graner, Senior Vice President of Agronomy
The previous Connections magazine was published 6 months ago. This was before a bevy of events which have now worked in concert to redirect the agricultural industry on its path. While not a necessity to remind readers, the past six months have presented the opposite extremes to last year’s drought, new geopolitical occurrences that impact trade flow and valuations, and a volatile election sequence that will shape commodity markets moving forward.
The entire CFS trade territory ended up being classified in either ‘drought’ or ‘extreme drought’ categories as the growing season concluded. Spring 2024 decided to swing the pendulum back and offered every weather-reporting district across Southern MN, Northern IA, and surrounding areas their wettest 60- day span in the past 132 years. There is no doubt that Spring 2024 and early summer 2024 were amongst the most stressful for CFS patrons in recent memory. The agronomic impacts of this pattern are undeniable: moisture and fertility stress due to poor root development, fungal disease pressure, elevated insect pressure, and inconsistent crop maturity are all factors witnessed in this growing season.
Last fall, our geography saw unilateral stress due to drought in crop year 2023.
Regardless of last year’s drought and now this year’s excessive moisture, yields of CFS and Central Advantage GS patrons are again outperforming relative to local trendlines due to the compounding benefits of annual zone management, optimal fertilization, and utilizing the aggregation of data for input decisions in a stressed year. Key decisions on fertilizer application, weed control, and fungicide utilization are much clearer when historical data is consulted to help decide to invest. On the technology front, CFS invested in several emerging types of technology in the Summer of 2024. CFS has piloted See and Spray technology, invested in DJI Spray Drones for spraying and spreading, and trialed new biological products. CFS is driven to ensure any product or application recommendations remain rooted in local data with statistical significance. CFS can rapidly evaluate these new products for their consistency and reliability for return on investment. Expect more exciting news on these innovative technologies from the 2024 growing season. Lastly, CFS also continues to invest in its digital technology to allow for easy interaction with our customers.
The CFS App can be used to conveniently manage your businesses while partnering with CFS: Customers can view statements and farm plans, check invoices and pay them, apply for easy financing, sign contracts for grain/energy/fertilizer, learn about products or services, and stay up to date on CFS operations. The investment into this CFS App is one worth checking out – a CFS sales representative can walk anyone through its features. The app itself is FREE and very intuitive to use for a first-timer. Please try it out – the feedback on this App has been outstanding from CFS owners the past few years. As crop year 2024 ends and crop year 2025 begins this fall, CFS is excited to be a part of your operation. Through the highs and lows of every agricultural commodity cycle, we strive to be dependable trusted advisors while navigating markets and technology. Thank you for the opportunity to serve you each day and thank you for your business!
AGRONOMY
Effective Input Decisions for 2025
Dylan Barth, Agronomy Sales Manager
Yield Impact of Cutting Imputs When market pressures tempt growers to cut input costs, it’s essential to think carefully about the potential impact on yields. We’re once again seeing, based on this year's results, how crucial it is to invest in crops and adopt a systems- based approach. Those who continued to prioritize key practices—such as side-dressing, applying fungicides, following precise fertilizer prescriptions, and incorporating micronutrients—are seeing significant returns. Even in tighter market conditions, a well-thought-out system can often mean the difference between success and stagnation. Before considering cuts, it’s important to analyze the long-term implications of reducing investments in critical crop management practices. A s we look ahead to the 2025 crop season, many growers are beginning to focus on the commodity markets, which don’t appear as promising as they have in the past couple of years. After relatively strong prices, this shift in market conditions has naturally led to important discussions around managing input costs. Growers are increasingly seeking ways to protect their bottom lines while aiming for optimal yields. In these conversations, we always emphasize three critical factors that should be considered when determining input strategies:
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Input Value in Terms of Bushels Another vital consideration is evaluating the value of inputs to the bushels they help produce. A useful metric for this is calculating how many bushels it costs to purchase a given input and comparing that to historical trends. For example, when looking at potash, the current price per ton represents the third-best value within the last six years. This makes it an appealing input to invest in despite the broader market downturn. Additionally, it’s important to calculate break-even points for yield-enhancing inputs such as fungicides and micronutrients. Even with compressed commodity prices, these inputs are showing positive returns on investment. Understanding the value of inputs through this lens can help growers make more informed decisions in any commodity market 3 Impact of Added Bushels on Farm Finances It’s always important to ask, "If I produced an extra 20 bushels of corn or 10 bushels of soybeans, how would that affect my farm's overall cash flow?" Row crop farming remains a high fixed-cost operation, and one of the simplest ways to spread these fixed costs is by increasing production. By producing more bushels, growers can improve their cash flow and create a financial cushion, even when market prices are under pressure. Investing in the crop, rather than cutting back on crucial inputs, can help to navigate through a lower commodity cycle more effectively. More bushels mean more revenue to cover fixed costs, making each acre more profitable. As growers consider their input strategies for the 2025 crop, we fully understand the pressure to manage costs. However, it’s crucial to make these decisions based on data and a solid understanding of the financial and agronomic implications. We encourage you to consult your CFS agronomist and carefully assess the data before finalizing any input-related decisions. By working together, we can help you grow a profitable crop not only in 2025 but for many years to come. We appreciate the opportunity to support you and your farming operation and are committed to your continued success. Moving Forward with the 2025 Crop
THE POWER OF GENETICS: Why Choosing the Right Corn Varieties Matters on your Farm Andrew Thilges, Regional Sales Agronomist
In the world of agriculture, the difference between a good harvest and a great one often boils down to one crucial factor: genetics. Selecting the right corn genetics can significantly impact yield, resilience, and overall profitability for corn farmers. Here is why making informed choices about corn varieties is vital for your farming operation.
At the heart of every farming decision is the quest for higher yields. Different corn genetics come with varying potential for productivity, shaped by their traits such as disease resistance, drought tolerance, and adaptability to local soil conditions. By choosing hybrids that are specifically bred for your geography and challenges, you can maximize your yield potential. Today’s agricultural landscape is full of challenges, from unpredictable weather patterns to the rise of pests and diseases. Modern corn genetics are engineered to withstand these pressures. For instance, many hybrids are starting to offer better resistance to diseases like Tar Spot and enhanced protection against corn rootworms through mRNAI technology.
By opting for these varieties, growers can stay in front of any issues that may arise throughout the growing season. Choosing the right corn genetics is not just a matter of preference; it is a strategic decision that can determine the success of your farming operation. By investing time in understanding the options available - considering factors like local climate, soil conditions, and market trends - farmers can position themselves for long-term success. In the ever-changing landscape of agriculture, the right genetics could be the key to thriving in the years to come.
As you drove by corn fields this August, odds are you might have seen a high-clearance ground sprayer, helicopter, or airplane spraying a fungicide over the crop. This year, however, you could have also seen a drone covering some of these acres as well. The end of the fungicide application marked the end of the first season that CFS trialed its new spray drone, covering an impressive 4,100 acres with the machine. Throughout the season, the drone was primarily used to apply fungicides, insecticides, and micronutrients to crops such as corn and oats. However, we also had the opportunity to apply other products, such as the biological Utrisha N. As with many new pieces of technology, the first season of its inaction is spent learning how and where it can be best utilized. Like helicopters and airplanes, a spray drone provides a method of application that removes the risk of running over crops while the equipment is in the field. However, it can also provide more thorough coverage, by getting closer to the crop, and the ability to get closer to edges and objects that the other airborne applicators may not have. These benefits make the drone a great choice not only for more open fields but also for smaller fields that may be difficult for a sprayer or a helicopter to operate. That being said, the drone does have some limitations on where it can best fly, a fact that the applicators this season learned fairly quickly. The drone only works when it can have a direct signal between the machine and the remote controller that the operator uses. This means that obstacles, such as hills and trees, can cause some challenges when flying in a field. While some of these situations can be addressed by using a signal booster, applicators still must be careful to evaluate each field to best minimize the risk of signal loss. Because of this, the drone must still be used in tandem with the ground sprayers and the other airborne applicators to ensure that the CFS operations team can be as efficient as possible and that the correct piece of equipment is being used for the correct acre. Overall, the first season with the spray drone can go down in the books as a success and everyone is excited about the prospects of the next fungicide season. Though the drone may not be used on every acre, it finds its niche in the CFS applicating team and opens the door for more applicating possibilities. By keeping their eyes on the future and embracing the new technology that enters the agricultural space, such as drones, CFS continues to ensure that they will be well prepared to provide the most cutting-edge level of service to their members that they’ve come to expect. CFS'S SUCCESSFUL FIRST SEASON WITH SPRAY DRONES Lucy Pieper, Regional Sales Agronomist
The Farm Bill at a Crossroads: Ongoing Debates and Delays
KC Graner, Senior Vice President of Agronomy
As of September 2024, the United States Farm Bill remains at a critical juncture. The Farm Bill is a comprehensive piece of legislation that governs a wide range of agricultural and food programs. The current bill (passed in 2018) was set to expire at the end of September 2023, but ongoing debates and political disagreements have delayed the passage of a new bill. This legislation is renewed approximately every five years and plays a vital role in shaping U.S. agricultural policy, food assistance programs, rural development, and conservation initiatives. The Farm Bill is generally considered to be amongst the most bipartisan in the mutual political effort, however, the election year seems to have added rigidity to the political parties’ willingness to consider policy over politics. Several contentious issues have contributed to the delays in passing the new Farm Bill. One major point of contention is nutrition assistance programs, especially the Supplemental Nutrition Assistance Program (SNAP), which accounts for nearly 80% of the Farm Bill's budget. Lawmakers are divided over whether to expand or restrict eligibility for these benefits. Some lawmakers are advocating for tighter work requirements for recipients, while others emphasize maintaining or increasing support for low- income households. These are certainly necessary programs, yet the overarching budget deficit and inflation story to fund a similar bill as the 2018 version is amplifying the complexity of the issue this time around. Climate and conservation efforts are also at the forefront of discussions. Many lawmakers and agricultural organizations are pushing for stronger support for conservation programs that help farmers adopt sustainable practices to reduce emissions and improve soil health.
These programs are particularly important as the agricultural sector is seen as a key player in combating climate change. Some legislative members are concerned about the costs and implementation challenges of these initiatives – generally, the lack of understanding of the costs farmers incur is something advocacy groups are working to remedy. CFS leaders have spent time in Washington DC each of the past three summers to advocate for farmers on the need for subsidy programs related to these conservation efforts. Commodity support programs are the most important portion of the Farm Bill that CFS advocates for given their impact on CFS owner’s operations. These crucial programs provide financial assistance to farmers, and it can be easily argued that these programs are a matter of national food and energy security. With volatile markets and climate-related risks affecting farmers' livelihoods, the advocacy ask has consistently been to expand or update safety nets and crop insurance programs to better protect producers. Much like the issue with policy for the SNAP program, however, budget constraints are complicating decisions on how much funding to allocate. Legislators are rightfully concerned about overspending and must make difficult choices on which parts of the budget to trim out. While discussions continue, temporary extensions of the 2018 Farm Bill have been enacted to prevent major disruptions in farm programs and food assistance. These extensions are not a long-term solution. The agricultural industry players (including farmers, cooperatives like CFS, and upstream and downstream commodity handlers) are growing increasingly concerned about the lack of certainty. Without a new Farm Bill, programs that are crucial for supporting farmers' incomes, ensuring food security, and promoting environmental conservation could face funding
shortages or operational delays. Despite the delays, there is hope that a bipartisan agreement will be reached soon. Key lawmakers in the Senate and House Agriculture Committees are working to address differences and finalize a bill that balances the needs of farmers, consumers, and environmental sustainability. Versions have been drafted in the House and the Senate. As negotiations continue, the future of U.S. agriculture, food policy, and rural development remains in the balance, with the next Farm Bill expected to shape the industry for the next half- decade.
Central Advantage: Data-Driven Decisions Ashley Boehnke, Precision Agronomy Lead
With harvest underway and yield data starting to come in, the Central Advantage team is focusing on ensuring that all our growers’ data is entered correctly and completely. We are beginning to plan for Data Insights from 2024, a year markedly different from the previous one. We are preparing for reports, grower books, learning centers, and grower meetings that will take place over the coming months. While the final results from this year's management decisions, combined with the weather we experienced, are not fully in yet, we have an idea of what we have to work with and look forward to analyzing it with all our Central Advantage growers.
We end the 2024 crop year with 310,000 total acres in the Central Advantage program, 304,000 of which were planted to corn, corn on corn, or soybeans. This extensive data pool allows us to conduct queries ranging from all CFS territories to local areas within just miles of your bin site. The Central Advantage team also placed a total of 1,324 Enhanced Learning Blocks (ELBs) in 2024. We covered the usual metrics: seed population in corn and soybeans, and nitrogen, phosphorus, and potassium rates. This year, we also conducted 61 sulfur rate ELBs and 10 fungicide application ELBs. The fungicide ELBs included on/off blocks, demonstrating how well the technology works to implement these trials. Pictured to the left. Additionally, there are numerous other trials and side-by-side comparisons in the Central Advantage database this year. Our team will collect results from all these trials and share them this winter with our Central Advantage growers to help them make informed management decisions for 2025.
The Importance of Soil Health for Farmers STRATEGIES FOR SUSTAINABLE CROP PRODUCTION AND SOIL MANAGEMENT
Dean Frank, Conservation Agronomist
One of the first things farmers need to consider when growing crops is their land. The land and soil used to grow crops should be at the forefront of every operation. As we continue to use the land, soil health is becoming increasingly important. There are no two fields with the same soil makeup, and there is no universal practice to improve soil health that will work in every field and operation. It is up to us as stewards of the land to identify what our soils need to be healthy and take steps to ensure their fertility in the future. The soil in our fields is like a large city with vast networks of interconnected parts. Healthy soils are full of living organisms, like people in the city, that are working to create a thriving community. Aggregates that create pore spaces act as transportation and utility services. The more opportunity the soil gets to build its structure, the bigger and better that “city” becomes. Practices like crop rotation and cover crops help build organic matter and bring nutrients into the soil, while excess tillage can act like a bulldozer demolishing those communities. Past farming practices worked for growing crops but often left the soil ignored and in worse shape. It takes years to build or improve organic matter in a field and decades to create new soil. It only takes a strong wind or heavy rain in a field with poor soil structure to fill the ditch with soil meant for crops. Fortunately, there are a variety of ways to create and manage healthy soil: reduced soil disturbance, keeping the soil covered, diverse crop rotations, keeping a living root in the soil, and integrating livestock. While every one of these practices is not viable for every field, most operations can find a way to make a combination of practices work for their fields. Reducing soil disturbance is one of the best ways to allow soils to begin their transformation back to a healthy state, allowing for the soil and organic matter to build a nutrient-rich environment capable of handling a variety of weather conditions. Healthy soil structures can act as a sponge, taking in larger amounts of water and holding onto that moisture for when it is needed. Stronger soils can support equipment like planters in wet conditions more than overworked soils can. Deep conventional tillage creates beautiful black dirt and an ideal seedbed but also destroys and rips apart that useful spongelike soil. Keeping the soil covered in a variety of ways ensures that the soil is protected from the elements, reduces moisture evaporation from the field, and protects the soil from extreme temperature changes. Cover crops have a multitude of benefits, including breaking up compaction, building organic matter, capturing solar energy, and suppressing weeds. The longer our soils stay covered, the more the ecosystem can work to extract nutrients from the soil for the crops. Taking on practices to improve and maintain healthy soils can seem like a daunting task; however, growers are not alone. The Central Farm Service community is here to help growers navigate practices, programs, and supports that operations may take on during their soil health journey. CFS has agronomists, precision agronomists, and me, Dean Frank, CFS’s new conservation agronomist—who are all able to identify where to start. We want to ensure that you are farming land, not just space. If you have any questions or are looking for support with your soil health, do not hesitate to contact any one of the CFS agronomists.
A SEASON OF GROWTH & INNOVATION Nick Jackson, VP of Grain
This year, we welcomed a new face to our grain merchandising team, adding a fresh perspective and deep expertise to help navigate market complexities. Grain merchandising is the backbone of our ability to secure the best prices for the crops our farmers work so hard to produce. Our new team member, Emily Meixell, has already made valuable contributions, helping to streamline processes and uncover new opportunities in our markets. In the months ahead, this addition will further our goal of offering tailored solutions that maximize value for our patrons. Another development that has generated buzz among our members is the introduction of new contract options. With commodity markets experiencing unprecedented volatility, we understand how critical it is for farmers to manage risk effectively while capturing market opportunities. Our merchandising and grain origination teams have worked diligently to create innovative contracts that offer more flexibility, allowing farmers to lock in pricing with greater confidence. Whether through specialized pricing options or enhanced grain marketing programs, we’re offering more tools to help you navigate the challenges and capitalize on market shifts. We’ve also been hard at work expanding the functionality of our cooperative app. This app is a central tool for our patrons, offering real-time market information, contract details, and grain ticket tracking right from your phone or tablet. Our development team has rolled out several new features this year based on member feedback, such as improved reporting capabilities, faster updates, and streamlined notifications on pricing changes. It’s all about making it easier for you to access the information you need, when you need it, to make informed decisions about your grain marketing strategy. As we move into the heart of fall, it’s the perfect time to reflect on the changes and growth we’ve experienced as a cooperative this year. In the grain division, we’ve seen significant progress across several key areas—innovations that will continue to enhance our services to our farmer-owners and better position us in the ever-evolving ag market. I want to share some of the exciting developments we’ve rolled out, with detailed insights from members of our team following in this issue of Connections.
Infrastructure is another area where we’ve made great strides. Over the last year, we completed several major construction projects aimed at improving efficiency and capacity at our grain elevators and shuttle loaders. These projects are critical to keeping pace with the needs of our members and ensuring we can continue to provide fast, reliable service during peak harvest times. With these updates, our facilities are better equipped to handle larger volumes, and we’ve optimized storage and drying capacity in response to the increasing demands of modern grain farming. Beyond these internal improvements, I want to take a moment to address the broader context of the grain markets, especially the dynamics affecting corn and soybeans, two pillars of our members’ production. This year has been one of uncertainty and change, as multiple global and domestic factors continue to weigh on commodity prices. For corn, supply challenges have come from weather-related production issues across the Corn Belt, particularly drought conditions in some key growing areas and flooding in others. The resulting stress on yields has kept the market on edge, with supply-and-demand balances shifting from month to month. While recent rainfall has alleviated concerns nationally, locally the potential for yield variability remains high, driving ongoing market volatility.
On the demand side, ethanol production and export markets remain crucial drivers of corn prices. Despite domestic ethanol production remaining strong, export demand has been somewhat weaker than expected due to increased global competition and a stronger dollar making U.S. corn less competitive on the global stage. Trade relationships and geopolitical tensions have further complicated these dynamics, and it remains to be seen how they will play out through the remainder of the year. For soybeans, the situation is somewhat different. Global demand, especially from China, remains a key factor. However, the slowdown in China’s economy has raised concerns about the sustainability of high import levels. Compounding these concerns is the record production coming out of Brazil, which has made global soy markets highly competitive. U.S. soybeans, facing both logistical challenges and stiff competition, have struggled to maintain their usual share of the market. Domestically, crush demand for soybeans has remained robust, driven by strong demand for oil and meal, but global factors will continue to exert pressure on prices. Additionally, government policies surrounding biofuels, including mandates and incentives for biodiesel production and SAF, will continue to influence corn and soybean markets as we move forward. The energy transition and the growing emphasis on renewable fuels offer both risks and opportunities for producers, and we are closely monitoring how these policies will affect demand for key grain commodities. While market conditions are complex, our cooperative is committed to ensuring our members have the tools, expertise, and infrastructure they need to succeed. By focusing on innovation in contracts, expanding digital capabilities, and investing in our physical infrastructure, we are positioning ourselves to navigate these challenges effectively and deliver value to our farmers. As always, we appreciate the trust you place in us to support your operation, and we look forward to continuing to grow together in the seasons ahead. Stay tuned for in-depth articles from the grain leadership team on each of these developments!
CFS'S ROLE IN GRAIN SUPPLY AND EXPORT SUCCESS
Kevin Schweer, Lead Grain Merchandiser
For the past four years, the western corn belt has faced tight corn supplies due to droughts, flooding, and strong demand from Canada and Mexico. Fortunately, Southern MN and Northern IA have consistently produced good crops during this time, allowing them to provide grain to areas in short supply. CFS is well connected to the world marketplace with access to the UP and Canadian Pacific railroads, enabling us to be part of the solution to their supply problems. Three years ago, Delavan and Welcome grain locations shipped corn trains on the Canadian Pacific Railroad to Alberta, Canada, after the region experienced its worst drought in over 30 years. Due to droughts in Nebraska and Mexico for the past two years, Randolph and St. James grain locations have sent trains to Mexico and the Western United States. These rail connections create a marketplace for exportable grain surplus and help maintain competitive grain prices. Corn and soybean processing plants must keep their bids high enough to prevent excessive grain exports, ensuring grain stays in the area to meet local demand.
It will be a steeper challenge this year to export grain from the area due to lower local yields. There are also near-record yields in the rest of the corn belt, but there are still opportunities that are present. Today the United States has the cheapest corn available to the world, and there really aren’t any other good alternatives for foreign buyers. The combined stock/use of the major exporting countries of the US, Brazil, Argentina, and Ukraine is 9.6%, near the historical average. However, after taking the U.S. out of the equation, that only leaves the world with a stock/use of only 3%, the tightest value in the past 25 years. This compares to the historical average of 9%. Not surprisingly, this is leading to one of the best starts to the corn export program in many years. There is currently a record-high amount of unshipped corn to Mexico for new crops and we continue to see excellent weekly sales as of this writing in early October. Looking ahead to this winter, we expect CFS will participate in this strong export market. Our rail facilities represent a vital link between our area and the global marketplace. By providing efficient, cost-effective access to international buyers, these facilities empower farmers to increase profitability and diversify marketing outlets.
Welcoming Emily Meixell to the CFS Grain Division
Racquel Walters, Lead Grain Advisor - Central
As many know, 2024 has been a significant year for the CFS Grain Division. One of the exciting changes is the addition of Emily Meixell. Primarily based in Truman, Emily started in August and has seamlessly integrated into our merchandising team, crediting the transition to the welcoming and helpful culture of CFS. Emily and her husband live just outside of Sherburn. They are blessed with three wonderful boys, ages 15, 12, and 10. Their boys are active in football, hockey, and baseball,
so much of their time outside work is spent on a field or rink. When they can sneak away from a sporting event, they love to travel, hike, and spend time with family.
Before joining CFS, Emily spent 18 years with Cargill, where she started in customer service and later became a Farm Relationship Manager, working with many growers in Southern Minnesota on their marketing plans. “I am excited to continue working with these accounts in the future at CFS,” said Meixell. The Grain Division and CFS are extremely pleased to have Emily on board and look forward to growing together in the years to come!
STRATEGIC GRAIN MARKETING Accumulator Contracts:
Robb Conroy Lead Grain Advisor - East
Additionally, CFS will soon begin sign-ups for our 2025 Market Advantage and Average Price contracts. These contracts offer a great way to diversify your marketing strategy, providing you with multiple tools to manage your bushels effectively. To explore how these options can fit into your grain marketing plan, we encourage you to reach out to a CFS grain marketing advisor today.
Corn Dec 25 Producer - Weekly Accumulator with Euro Double-Up & Gtd Qty
Corn Dec 25 Producer - Weekly Accumulator with Euro Double-Up
An accumulator contract is a strategic tool that allows grain producers to lock in a higher selling price above the current market level. This type of contract operates with two key price points: the accumulation price, set above the market, and the knockout price, set below. If the futures price dips below the knockout price, the contract automatically ends, leaving the producer to manage any remaining unsold bushels. Some contracts offer a safety net in the form of a guaranteed minimum price for these unsold bushels, essentially acting as a floor price in the event of a knockout. The contract runs over a defined period, during which incremental amounts of grain are sold, typically either daily or weekly. However, as beneficial as they can be, accumulator contracts also come with inherent risks. One such risk is the possibility of being required to deliver twice the amount of grain at the accumulation price, known as the “double-up” risk. Therefore, it's crucial to use these contracts thoughtfully, limiting the amount of grain involved and ensuring they align with your broader marketing strategy. At CFS, we offer a variety of customizable accumulator contracts to suit individual producer needs, helping you manage your risk. Below are examples of two types of contracts, each designed to offer flexibility and protection.
Corn Dec 25 Producer - Weekly Accumulator with Euro Double-Up & Guaranteed Quantity Board Price: 4.5375 Pricing Period: 10/04/2024 to 11/21/2025
Accumulation Level: 4.7500 Knock-Out Level: 3.,8975 Double-Up Level: 4.7500 Guaranteed Level: 4.5375
Contract Details: Every day the contract settles above the Knock-Out Level (3.8975), 100% of the daily notional quantity is priced at the Accumulation Level (4.7500). If the Knock-Out level trades or is breached to the downside, further accumulations and the Double-Up risk cease. Any bushels already accumulated will remain. The remaining accumulations are priced at the Guaranteed Level (4.5375). At expiration, if the contract settles above the Accumulation Level (4.7500) and a knock-out has not occurred, an additional 100% of the notional quantity is priced at the Accumulation Level (4.7500).
Corn Dec 25 Producer - Weekly Accumulator with Euro Double-Up Board Price: 4.5375 Pricing Period: 10/04/2024 to 11/21/2025 Accumulation Level: 4.9225
Knock-Out Level: 4.0550 Double-Up Level: 4.9225
Contract Details: Every day the contract settles above the Knock-Out Level (4.0550), 100% of the daily notional quantity is priced at the Accumulation Level (4.9225). If the Knock-Out level trades or is breached to the downside, further accumulations and the Double-Up risk cease. Any bushels already accumulated will remain. At expiration, if the contract settles above the Accumulation Level (4.9225) and a knock-out has not occurred, an additional 100% of the notional quantity is priced at the Accumulation Level (4.9225).
Busy Summer and Fall for Our LP Service Department and Refined Fuels Team
ENERGY UPDATE
Steve Scholtz, VP of Energy
Our LP Service Department has had an incredibly busy summer and fall, taking on various tasks including tank setups, upgrading corn dryer setups, setting up new hog sites, new home heat tank installations, painting, and decaling LP tanks. Additionally, with our recent acquisition of More Ag/WIM LP, we've been updating tank leases and adding additional tanks to our inventory. I want to extend a heartfelt thank you to our LP delivery drivers for their tremendous support in helping the service department stay on top of all this work and for being prepared for any new business that comes our way. September brought record warm and breezy weather, allowing corn to dry down in the field faster than usual. No rain delays and significant progress made in the field in a short period have led to a fast- paced harvest season for our Refined Fuels team.
I'm thrilled to announce that our sales division has reached a huge milestone, placing in the top 5 across the entire CHS system for the most increase in Premium Diesel sales over the previous year. This is a fantastic achievement, and I want to thank all CFS Energy employees for their dedication and hard work. Don't forget to take advantage of the CFS app, which allows you to contract, view transactions, access statements, check balances, and make payments online. The app also enables you to connect with your energy sales representative, making it simple to stay connected with all the information pertinent to you. If you haven't already, we encourage you to sign up for the app today and experience the convenience it offers. Contact us at 507-451-1230 if assistance is needed. Thank you for trusting CFS to be your energy partner. Your support and confidence in us drive our commitment to providing the best service and products in the industry.
RENEWABLE DIESEL AND BEYOND: A PATH TO SUSTAINABLE ENERGY As the world grapples with climate change, renewable fuels offer a promising solution to reduce greenhouse gas emissions and decrease reliance on fossil fuels. Derived from biological materials such as plants, algae, and organic waste, renewable fuels like ethanol, biodiesel, and biogas provide sustainable alternatives to traditional energy sources. These fuels not only produce significantly lower emissions but also enhance energy security by utilizing domestic resources and creating jobs in local economies. Despite their benefits, renewable fuels face challenges such as higher production costs, feedstock availability, and the need for infrastructure upgrades. However, ongoing advancements in technology and supportive policies are gradually overcoming these hurdles. Innovations like advanced biofuels from non-food feedstocks and renewable diesel, which can be used in existing diesel engines without modification, are making renewable fuels more efficient and competitive. Renewable diesel is a key focus as we move forward, with availability primarily in California, which has 570 fueling stations. Although there has been some growth in Oregon, Washington, Idaho, and Montana, California's Low Carbon Fuel Standard makes the economics of renewable diesel competitive with petroleum diesel. The renewable industry is actively exploring ways to expand availability beyond California. The transition to renewable fuels is crucial for a sustainable energy future. By investing in research, supporting innovation, and implementing favorable policies, we can accelerate the adoption of renewable fuels. This shift not only addresses environmental concerns but also presents economic opportunities, paving the way for a cleaner, greener future that benefits both current and future generations. From January 2022 to January 2023, U.S. renewable diesel production capacity increased by 71%. The EIA projects potential production to reach 5.9 billion gallons by the end of 2025.
CFS: Your Reliable Partner for Energy Solutions
Eric Hopp, Energy Sales Manager
At CFS, we pride ourselves on delivering responsive and dependable energy services tailored to your needs. Our extensive storage capacity ensures that we can reliably supply you with the energy products you need, whenever you need them. We’ve invested heavily in our infrastructure to provide uninterrupted service, offering peace of mind with our comprehensive range of fuels and lubricants. By contracting for propane or refined fuels with us, you secure a reliable supply for your farm, home, or business, ensuring that your needs are met without delay. Additionally, our online app provides 24/7 access for contracting, ordering, and requesting service, bringing convenience and control to your fingertips. DEF (Diesel Exhaust Fluid) While many would like to see DEF disappear, it appears to be here to stay for the foreseeable future. Remember to keep nozzles clean to avoid getting dust and dirt in your equipment system. As the number of units in your operation grows, consider larger storage tanks. We offer tank monitors for your DEF tanks, saving time, aiding with inventory, and reducing downtime. Diesel Fuel Storage and Tank Monitoring As your operation evolves, what was ample storage 10 years ago may no longer meet your needs, as some modern equipment can nearly deplete a 500-gallon tank in a single fill. CFS offers tank trade-in programs and occasionally has discounted or used tanks available. For AFD customers, tank monitors offer the convenience of having fuel readily available without upfront payment. Payment can be made once the product is used. Additional features can be discussed with your energy salesperson. Bulk Oil Bulk oil can save you several dollars per gallon compared to traditional drum oil. It also provides a cleaner storage solution, eliminating those pesky puddles on drum tops in your shop. If you're interested, we offer a variety of tank sizes and configurations to suit your needs.
Contact your local CFS Energy Representative or the energy office at 507-451-1230 to explore how we can support your energy needs today!
Download the CFS App today and join a community of farmers, businesses, and homeowners who are leveraging technology to drive success. Unlock the Power of Convenience with the CFS App!
Use your phone’s camera to scan the QR code to the left or go to connect.cfscoop.com DOWNLOAD THE CFS APP TODAY Take control of your operation and experience the convenience of having essential tools at your fingertips.
ENHANCEMENTS AND MARKET INSIGHTS
Glenn Eben, VP of Feed
The CFS Feed Team has been busy with numerous projects, capital improvements, maintenance, repairs, and rolling stock updates. We are completing concrete approaches and have purchased new equipment to enhance efficiency at the St. James Mill location. In Truman, we have completed repairs and updated the warehouse racking. In Freeborn, we have added new equipment, at the Hayfield Mill, we've introduced new equipment to improve working conditions and distribution. CFS recently held its biannual Feed Mill Manager Forum, a vital event for discussing new products and solutions. A key focus was the Smart Orders system, transitioning the ordering process from paper to digital. This system enhances data security and accuracy, allowing customers to enter orders directly, minimizing errors, and streamlining the process. This technology ensures efficient and accurate order management, benefiting our customers and CFS. Market Insights: Hog Market: The latest US quarterly hog and pig inventory report shows hog supplies above last year's levels despite a 2.2% decline in the breeding herd. Pigs per litter reached a record 11.72, about 1% above 2023 and 3.4% above a five-year average. Pork production is expected to be strong for the rest of the year and steady or slightly larger in 2025. Fed Cattle Market: The fed cattle market depends on beef performance and consumer demand. Cattle numbers are projected to stay below last year's levels through the end of the year, but heavier weights will keep beef production adequate for the holiday season. The market is expected to trend higher into late November and early December, supported by lower cattle supplies. Soybean Meal Contracts: This year presented challenges in securing soybean meal contracts due to a shortage of sellers. Soybean production plants were hesitant to offer basis contracts on unpurchased products. However, as the harvest progressed and yields became clearer, as sellers began offering basis contracts. There are opportunities for customers to purchase basis or cash contracts on soybean meal. These updates and insights reflect our dedication to enhancing facilities and operations, ensuring high-quality feed production, and adapting to market dynamics for the benefit of our customers.
Sustainability A MULTIFACETED APPORACH IN THE HOG INDUSTRY Brad Kluver, Swine Production Specialist
When we hear the word "sustainability" in agriculture, our first thoughts often turn to financial sustainability or generational sustainability as farms work to pass the torch. Farmers have always viewed their work as being stewards of the land and livestock, ensuring it remains viable and productive for the coming years. However, consumer and public perception focusing more on environmental sustainability and carbon footprint has created new landscapes to navigate in the agricultural world, especially on the livestock side. While this has introduced more hurdles, it has also opened new avenues for diversifying income sources. The National Pork Board has partnered with a group called Eocene to create a Farm Impact Report showcasing how pork producers in Minnesota and other states are investing in environmental resources. This report provides a baseline metric and guidance on cost-share and incentive-based practices that farms can implement. Even aspects like split application (Spring and Fall) for manure can qualify for incentives. At CFS, we aspire to be a part of the sustainability equation alongside the farms we work with. First and foremost, we adhere to biosecurity practices to support herd health. Disposable boots are worn on the farm, shoes and floormats are disinfected, and feed trucks are washed daily. All this and more are done to prevent the spread of disease from one farm to another. We continue to work with other nutritional companies to stay well-versed in feed additives that provide both performance and immune function benefits. As we emphasize sustainability, animal health should be front and center. Whether considering environmental or financial sustainability, higher mortality rates in livestock are detrimental to both. Prevention and promotion are two areas of focus to reduce higher mortality rates. CFS will maintain its high level of biosecurity when on the farm and when manufacturing or delivering feed to play our part in prevention. We will also continue to provide insight into products in the marketplace that help promote better performance and immune response.
On behalf of myself and the rest of the feed team, we are committed to being a partner in the sustainability of the farms we work with, no matter how you define it.
BIOSECURITY Methods to prevent and/or control transmission of any health or safety threats to livestock, poultry, and consumers.
Jill Henderickson, Feed Quality Assurance Manager
Biosecurity encompasses methods to prevent and control health threats to livestock, poultry, and consumers, including the prevention of intentional feed adulteration by criminal or terrorist acts. Following recent outbreaks like African Swine Fever and avian influenza, companies are ramping up biosecurity protocols. Key measures include employee training, restricted farm access, wildlife control, proper carcass disposal, safe feed preparation, and equipment sanitization. These steps are crucial to reducing disease risks. CFS has formalized biosecurity protocols to mitigate disease transmission, emphasizing our commitment to keeping our livestock producers safe. Our robust biosecurity program includes continuous training and strict standards for ingredient receiving, visitor policies, and feed truck operations. At CFS, plant personnel attentively observe the activities of visitors, customers, service providers, and fellow employees to ensure compliance with our biosecurity measures. Ongoing biosecurity awareness, which includes continuous education and training, is essential. These measures are crucial for preventing disease outbreaks and ensuring the health and safety of your livestock, which in turn supports the sustainability and productivity of our agricultural community. We understand the vital importance of biosecurity and are dedicated to maintaining the highest standards to protect our producers and their animals.
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