Webinar: Managing Risk in the Hog Market
Tim Hughes, hog margin management team leader, Commodity & Ingredient Hedging, LLC. And Elliott Dennis, assistant professor and extension livestock marketing specialist, UNL Agricultural Economics.
The current pandemic and ongoing trade-related issues are presenting challenges and new opportunities in the hog market. Learn about available risk management tools and programs that can be utilized to better position hog operations in the global market.
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[00:00:23.370]Ryan Evans: Alright, he just emailed me his slides.
[00:00:40.290]ELLIOTT DENNIS: Can you hear me. Yep.
[00:00:46.110]Ryan Evans: You want me to share the slides from my end.
[00:00:48.750]ELLIOTT DENNIS: Yeah, why don't you just do that and avoid
[00:00:52.590]ELLIOTT DENNIS: Any problems with my computer here.
[00:00:56.040]ELLIOTT DENNIS: I'm really sorry about this.
[00:00:57.690]Ryan Evans: Okay, we'll get through it. People are forgiving for this zoom
[00:01:04.110]Ryan Evans: Alright, so are you guys ready if I start broadcasting all open up the room. Elliott, maybe just give it 30 seconds and then you can start with the intro and you'll just have to tell me. Next slide. Maybe. Does that work.
[00:01:16.920]ELLIOTT DENNIS: Yeah, next year.
[00:01:18.690]Ryan Evans: All right, I'm going to turn my camera off. And we'll go live, man.
[00:01:23.610]Tim Hughes: Do you want to
[00:01:24.030]Put it on.
[00:01:25.920]Tim Hughes: What's that
[00:01:27.960]Tim Hughes: I don't put that one on presentation mode or is it already on my screen. It looks like it's not. Oh yeah, thank you. I will do that as
[00:01:34.560]Ryan Evans: Soon as I start sharing
[00:01:36.030]ELLIOTT DENNIS: And Ryan before so it goes all the way to the to Tim and then once I give the introduction for Tim then stop the share. And then once Tim's done reshare again and I'll come back on. Okay.
[00:01:51.030]That sounds good.
[00:02:56.040]ELLIOTT DENNIS: Good afternoon, everyone. My name is Dennis and I'm an assistant professor of livestock marketing and risk management in the Department of Agricultural Economics at the University of Nebraska, Lincoln, on behalf of the Department. I want to welcome you to this webinar today.
[00:03:11.910]ELLIOTT DENNIS: It's part of a larger series that we do with the Department of Agriculture cultural economics and specifically our farm and ranch management team that focuses is right now on issues related to cope nineteen's impact on a brassy as an economy, but on a larger
[00:03:29.430]ELLIOTT DENNIS: Continuation on current issues that are relevant to producers.
[00:03:34.470]ELLIOTT DENNIS: You can find recordings of all these sessions that we do in a schedule of upcoming webinars and our firstname.lastname@example.org know that you once again that's farm dot you know edu.
[00:03:48.240]ELLIOTT DENNIS: And one of the resources we want to quickly highlight today is Nebraska or a hotline. We know these times are stressful and there's a lot of issues with
[00:03:57.960]ELLIOTT DENNIS: Mental Health amongst producers and also among the general community want to make you aware of this hotline. So if you feel like you're in need of that help, feel free to call one 804 64258 or visit rural wellness dot you know.edu
[00:04:16.050]ELLIOTT DENNIS: Also upcoming webinar for next week will be pasture range orange insurance and that will be Dr. Parsons from the Department of Ag econ here, you know,
[00:04:26.940]ELLIOTT DENNIS: Today we have, we're pleased to have Tim Hughes with us from CH hedging. I'm just kind of give a little format.
[00:04:35.670]ELLIOTT DENNIS: Today's actually a pretty important day that Haagen pics report is going to be coming out later this afternoon. So I'm going to go a little bit over what the projections are or what some of the analyst projections are
[00:04:48.840]ELLIOTT DENNIS: Then I'm going to pass it over to Tim and Tim's going to kind of give us a broad overview about how to manage price risk and in margin management in kind of a more volatile world today. And then I'll come back and conclude
[00:05:02.280]ELLIOTT DENNIS: With some issues on, you know, what are we facing looking forward and talk about some government programs that are currently available for producers. So when we just just jump right into this.
[00:05:13.860]ELLIOTT DENNIS: The Hog and Pig reports will be released later this afternoon. Lot of anticipation
[00:05:19.680]ELLIOTT DENNIS: just so you're aware, it's a quarterly report comes out in June, March June, September December and really one of the reasons why a lot of analysts are looking towards this.
[00:05:29.460]ELLIOTT DENNIS: This report is obviously we had coven 19 a lot of issues with positive cases amongst producer or amongst meatpacking workers.
[00:05:41.730]ELLIOTT DENNIS: And that led to pack and clients being shut down and all the hawks ended up getting backed up. And then in order to not restrict the supply chain and allow the hogs to continue to flow through
[00:05:55.530]ELLIOTT DENNIS: Some producers had resorted to euthanasia. And so this hog report is specifically going to be focusing on. You know what were those numbers and trying to estimate that
[00:06:06.780]ELLIOTT DENNIS: It kind of gives you an idea of where we're at. Historically, on this left hand side we have hog squatter Federally inspected on weekly basis, you can really see right in the middle of middle of March when kovats started to be prime bigger issue within the United States.
[00:06:24.660]ELLIOTT DENNIS: See the drop off really precipitous drop off in Hawke's water and now we've since really the middle of April, beginning of May, we've we've really started to climb, climb back up to what we consider historically normal
[00:06:41.280]ELLIOTT DENNIS: On the right hand side, I wanted to show you kind of where we're at and Saturday hawk slaughter.
[00:06:46.320]ELLIOTT DENNIS: To show that even though the backing plants have were shut down and we're running different shifts
[00:06:51.510]ELLIOTT DENNIS: There was still a considerable effort to try to get hogs processed in a timely manner. So on the right hand side is that the Saturday called weekly slaughter really we see right at that time beginning of April, we started to ramp up on on
[00:07:07.560]ELLIOTT DENNIS: Saturday slaughter. Let's go to the next slide.
[00:07:12.660]ELLIOTT DENNIS: So one of the analysts thinking about how many hogs. We're going to have how many really hauntings are kept for breeding and how many are going to be kept for marketing. So
[00:07:23.760]ELLIOTT DENNIS: Research firms kind of survey analysts and right now. Really think we're gonna have a lot more hogs in June, than we previously had about you know about 4% more
[00:07:37.080]ELLIOTT DENNIS: But it's important to realize that. Okay, the hogs kept for breeding are going to be down, potentially, and that's what people are anticipating
[00:07:45.390]ELLIOTT DENNIS: And the hogs get from marketing is going up. So we'll have a lot of supply essentially we're projecting a lot of supplying the near future but future hogs through the supply chain is is going to be lower. And we seen breeding higher than we anticipate that in the future.
[00:08:05.760]ELLIOTT DENNIS: We wouldn't have when we have more hogs in the future, but really kind of producer reaction to that was limit the number of parks in South slaughters actually been up quite a bit. Let's go to the next slide.
[00:08:18.270]ELLIOTT DENNIS: So this kind of offer a historical perspective on this. I just pulled the July contract dads have just about an hour ago just showed you where we were at entering February we were trading at about 84
[00:08:31.860]ELLIOTT DENNIS: Then in in March, kind of March 20 around there were trading at about 72 and then since then everyone. We're all aware that
[00:08:42.660]ELLIOTT DENNIS: It dropped kind of really all time lows and kind of where we're at right now is about 46 on the on the July contract.
[00:08:51.660]ELLIOTT DENNIS: So a lot of anticipation of what this report is going to be. And I think this really sets the stage nicely for Tim and kind of what he'll talk about and their perspective at ch as far as
[00:09:02.190]ELLIOTT DENNIS: March and management and how that can be important for the Nebraska community moving forward. Let's go to the next slide here.
[00:09:13.290]ELLIOTT DENNIS: I wanted to, I wanted to share this as kind of historical perspective as we were going into January. There was a lot of optimism about what the harp market was going to be doing. And a lot of that was because of Africans fine fever or as an
[00:09:29.880]ELLIOTT DENNIS: African swine fever was really devastating Eastern Asia and repopulation efforts by the Chinese were pretty much few tile.
[00:09:41.400]ELLIOTT DENNIS: since then there's been reports that they've been somewhat more successful, but wanted to kind of give you this progression 2010 really no cases, the blue dots are cases that were resolved and we kind of see
[00:09:55.290]ELLIOTT DENNIS: A little bit more cases in Europe, Eastern Europe, but they were resolved.
[00:10:01.050]ELLIOTT DENNIS: tons more cases and as of 2020. This is where we're at. Still one of those cases are still
[00:10:10.050]ELLIOTT DENNIS: Kind of isolated within China, Vietnam, and also Eastern Europe, but there is still a huge deficit on the market for available for or
[00:10:22.260]ELLIOTT DENNIS: Really protein products in general, due to this ASM. So while we have been facing a lot of Cobra 19 issues. I always like to look at where we were, where we act as affected.
[00:10:36.660]ELLIOTT DENNIS: The ability or repopulation efforts in China. No, really hasn't. The only thing that it could possibly affect it would have been demand or food service product.
[00:10:48.090]ELLIOTT DENNIS: And today as we kind of welcome Tim on to the webinar thing. It's just good to keep in mind that these type of experiences, whether it's
[00:10:57.630]ELLIOTT DENNIS: Human health or its animal health can have kind of large supply and demand shocks to the industry and so providing ways where we can manage margin or or managed profitability will be really important Tim has been
[00:11:12.540]ELLIOTT DENNIS: With CH for some time ran his some his own consulting firm and trading firm and also have been trading in Chicago.
[00:11:21.150]ELLIOTT DENNIS: And just want to welcome Tim and Tim, what do a great job and he works with a lot of Nebraska producers already and really looking for it that Tim sharing kind of his thoughts and ideas.
[00:11:46.890]Tim Hughes: Thank you very much. Elliot appreciate it and appreciate the invite today.
[00:11:51.630]ELLIOTT DENNIS: Can you hear me okay
[00:11:54.750]Tim Hughes: Yeah, we can hear you. Great.
[00:11:57.000]Tim Hughes: Great. And let me fire up the screen here.
[00:12:07.770]Tim Hughes: Okay, thanks again Elliot appreciate the invite.
[00:12:11.580]Tim Hughes: As I mentioned, my name is Tim Hughes run the hog margin management team at CH have been there since 2013 prior prior to that had a trading career on the Chicago Board Options Exchange, as well as trading.
[00:12:28.740]Tim Hughes: Developing trading systems on my own and trading those for clients.
[00:12:33.180]Tim Hughes: Excited to be here today. Unfortunately, this is the best time in the world beginning a risk management session on on the hog market would have been more timely probably before the market came down right
[00:12:47.610]Tim Hughes: But nonetheless, there are some opportunities out there on the horizon, and we'll get into those here today.
[00:12:54.540]Tim Hughes: So first, just a quick note on on who is CH. We really cut our teeth in the hog business is the company started right around 1998
[00:13:07.050]Tim Hughes: Right when the market crashed and the hog hog market.
[00:13:12.420]Tim Hughes: And at the time, we had a couple crop clients, the founder Perry Iverson had a couple crop clients and the crop clients also had some pigs. Obviously, they had been getting
[00:13:22.920]Tim Hughes: You know, killed on their production. And so they asked very to take a look at
[00:13:27.990]Tim Hughes: At hogs as a single unit of risk meaning. And this is what margin management became right is you're looking at the margin as a single unit of risk, rather than three separate legs with the corn, soybean meal and the hogs.
[00:13:42.870]Tim Hughes: So, from there we grew is is more or less of a hog margin management company and have expanded now into other livestock dairy and grain producers, we have 500 clients in 15 countries.
[00:13:56.250]Tim Hughes: We actually work with roughly 40% of the US pork production.
[00:14:02.520]Tim Hughes: Work with that and all producers, so I mean crushers food and beverage companies. So just, just a quick little background on who CH is we're based in Chicago. Don't hold that against us.
[00:14:13.410]Tim Hughes: And we also have a branch office in the morning.
[00:14:17.610]Tim Hughes: So just a little bit of a background for you.
[00:14:21.510]Tim Hughes: Today we're going to get into, you know, basically what we would consider a consulting call
[00:14:27.240]Tim Hughes: With our clients, you know. So generally, we're going to go through some fundamentals get caught up to speed on on current fundamentals.
[00:14:34.500]Tim Hughes: Look at the market structure look at the projected margins and then and then go ahead and look at a couple strategies that might be employed in order to protect risk and today specifically hot and risk.
[00:14:48.840]Tim Hughes: Just due to time constraints we won't be touching much on the corn in the meal, there will be some time for questions afterwards. So if you have any questions on those fronts, feel free to ask them.
[00:15:02.160]Tim Hughes: So let's get going. Current fundamentals, you're going to see a lot of charts like this. We call this a stack chart and the legend down here would tell you that each line is a different year
[00:15:14.040]Tim Hughes: It's pretty incredible to think that we could have gone through what we went through there in April and May, and yet still year to date slaughters still up 0.9%
[00:15:26.190]Tim Hughes: As Elliot mentioned earlier, the amount that we're killing on Saturdays has really helped out as far as starting to get through some of this backlog.
[00:15:42.030]Tim Hughes: The big conundrum out there that everyone has been talking about is the weights, you know, and trying to reconcile the weights with the bag big backlog of hogs.
[00:15:54.780]Tim Hughes: You know I've heard a lot of different answers on this and the one, the one that I keep coming back to is just how darn hot. It was in June and at the end of May in the state of Iowa and southern Minnesota, where were so many hogs are
[00:16:10.290]Tim Hughes: It really didn't make sense to a lot of people that you could have seen such a big weight drop. If you had as big of a backlog of hogs that you did.
[00:16:19.170]Tim Hughes: And this is offers does offer some people some some hope that maybe the backlog is not as big as some have anticipated.
[00:16:26.640]Tim Hughes: Most market analysts would put the backlog of pages at somewhere around 2.5 to 3 million pics at this point.
[00:16:35.220]Tim Hughes: The weights would would would if you just take them separately. The weights would suggest otherwise.
[00:16:40.890]Tim Hughes: Now we'll see on the logs and pigs report today, it'll be the most anticipated report at least since 2014 and we'll start to get a glimpse of the backup of the hogs, at least as of June 1
[00:16:54.390]Tim Hughes: But these weights have been well documented as far as a ray of hope that the backlog may not be as big as it is it as some are projecting
[00:17:09.210]Tim Hughes: Just a quick look at production looks very similar to this. The slaughter chart but year to date pork production is up 0.2%
[00:17:19.320]Tim Hughes: This is another one that that is getting a lot of play out there, South slaughter and right now year to date South slaughters up 11.7%
[00:17:29.970]Tim Hughes: The interesting thing though is that South slaughter was becoming an event prior to the virus and prior to coven prior to the market collapse. We already were experiencing five to 6% higher self slaughter going into the shutdowns
[00:17:49.350]Tim Hughes: Yes, it did. It did escalate. From there, and it's up 11.7% to date.
[00:17:57.390]Tim Hughes: You know, my take on this is, you know, somewhere around half of that is probably liquidation.
[00:18:04.800]Tim Hughes: The other half is probably guilt retention and things. Other factors that were already in place prior to the market meltdown.
[00:18:13.950]Tim Hughes: One big question we do get a lot on the phone calls that we make.
[00:18:19.110]Tim Hughes: Is, is the fact that when you bring in a heavy bear or guilt into a cell plant in order to process it is that counted as in the south slaughter numbers or in the barrel and gilts numbers we have been assured by the ATMs that those are
[00:18:37.980]Tim Hughes: properly coded at the plants so slaughter plant will have the same form to fill out as a as a hog solder plant and in that form. You have to, you have to designate whether the pigs are ourselves or or hogs.
[00:18:56.100]Tim Hughes: We're barrows and gilts, I should say. So it's our understanding that this is truly South slaughter of 11.7% year to date.
[00:19:09.780]Tim Hughes: We think pricing. We won't, won't spend a lot of time here. It's just been an incredibly bad, obviously. But again, it was it was it was at a
[00:19:20.580]Tim Hughes: Six year low when big pricing was all the way back in February.
[00:19:26.190]Tim Hughes: Obviously was was exasperated by the virus and the shutdowns and everything else going on.
[00:19:33.300]Tim Hughes: You know, but but we think pricing, you know, has really been soft The red line here is last year. It's really been soft
[00:19:41.880]Tim Hughes: Going back all the way to last October.
[00:19:50.070]Tim Hughes: Some good news. We try to concentrate on some good news today and some good news, you know, the biggest bright spot so far this year has been pork exports year to date pork exports are up 35% and that's through April.
[00:20:05.610]Tim Hughes: It is a record by a good 30% over the prior record for the first four months of the year.
[00:20:13.290]Tim Hughes: Obviously a big reason for that is China.
[00:20:16.620]Tim Hughes: If you look at as a percentage of production, obviously, with the with the big drop of production that we had in April, the percentage
[00:20:24.600]Tim Hughes: skyrocketed to record levels we shipped out 31 plus percent of our production in the month of April, which is just phenomenal. But even prior to that we were setting seasonal records for the percentage of our production heading overseas.
[00:20:43.170]Tim Hughes: You know that just been phenomenal, there's one thing you can't blame any of this on. It's our exports.
[00:20:53.880]Tim Hughes: And that's what the look. That's what the exports. If you combine to China mainland Taiwan and Hong Kong exports year to date are 375% above last year. Absolutely incredible.
[00:21:12.120]Tim Hughes: April exports alone to those three countries combined at 241 million bounce.
[00:21:20.940]Tim Hughes: Last year you're sitting at about 5560 million pounds.
[00:21:30.750]Tim Hughes: However, with all that being said, you know, if you look at the the was the report that came out about two weeks ago. Okay, so this is straight off of that that USDA report that was the that came out two weeks ago.
[00:21:43.440]Tim Hughes: If you look over here and look at the last year's exports that 6.3 billion pounds of the US pork exports last year.
[00:21:54.300]Tim Hughes: The USDA is only projecting this year to be at 7.2 billion pounds, even after having that information about April exports, so that would only put exports for the year up 13.9% well so far year to date through April. There are 35%
[00:22:11.610]Tim Hughes: You know so USDA is actually expecting our exports to slow down fairly significantly for the second half of the year. Now, I personally think they're low I do, I do expect our exports to continue to remain strong maybe not as as strong as the first half of the year, but
[00:22:29.820]Tim Hughes: I think I think will be better off at the end of the year than 7.2 billion and up 13.9%
[00:22:38.490]Tim Hughes: Also have a slight increase for exports next year at 7.3 billion pounds.
[00:22:48.750]Tim Hughes: So what about China. Well, it's still from, from my perspective, and you know from just from data that that we look at, you know, it still is a disaster over there.
[00:23:01.020]Tim Hughes: Their pig prices starting to rise again significantly. So this is their big price and week 25 which is this week. This information is from J CI their take price sitting at 34 pounds per kilogram and spiking again.
[00:23:16.470]Tim Hughes: Whether it's the virus, whether it's a SF
[00:23:20.280]Tim Hughes: Whether it's regulations, you know, they're having a very, very difficult time restocking over there and it's apparent in the prices.
[00:23:31.350]Tim Hughes: So I would expect exports to to China to remain incredibly strong at least through next year. At this rate,
[00:23:45.030]Tim Hughes: This is kind of allowed chart, but I wanted to do include it just to, just again to to to throw some optimism your way.
[00:23:53.160]Tim Hughes: It's, it's called a ribbon chart. Okay, so each color would be a different country. And these are imports of pork into China.
[00:24:01.440]Tim Hughes: You know, so it's kind of interesting. If you follow the United States, which is this red ribbon.
[00:24:06.360]Tim Hughes: And see that the the progress that we've made relative to the rest of the world as far as exports to port to China go
[00:24:17.280]Tim Hughes: It's been significant and you can clearly see
[00:24:21.510]Tim Hughes: The improvement since the trade phase one trade deal was signed with China.
[00:24:26.910]Tim Hughes: You know, that was right around the fall, November, December last year.
[00:24:32.070]Tim Hughes: To the point where three in the last four months us has led the world in pork exports into China.
[00:24:41.010]Tim Hughes: So, so very encouraging that the the the trade, the phase one trade deal with China has made significant it looks to have made significant improvements for us.
[00:24:59.610]Tim Hughes: So let's take a look at market structure, you know, I call it market structure is just looking at the different cash indexes cut out cash. Where are the features. And so, so on and so forth.
[00:25:13.770]Tim Hughes: You know it's been a wild ride cut out has gone from
[00:25:18.540]Tim Hughes: From record highs sees record seasonal highs pre virus to record seasonal lows back to record seasonal highs and back to record seasonal lows.
[00:25:30.120]Tim Hughes: I'm going to get into this a little bit because I don't feel a lot of people have a good grasp on what cut out actually is.
[00:25:38.700]Tim Hughes: We know it's pork sales and we know that there has been less pork to sell right because of the because of the shutdowns
[00:25:47.160]Tim Hughes: And so a lot of people just take those two facts and they expect cut out to remain strong because you have less pork to sell.
[00:25:56.100]Tim Hughes: But what we call cut out is only negotiated pork sales. Okay. The 602 is negotiated pork sales and negotiated pork sales only make up about 25% of all cut out sales.
[00:26:10.830]Tim Hughes: There's three other types. There's formula sales, which is the biggest bucket one of your sales account for about 55% of cut out sales.
[00:26:19.980]Tim Hughes: Forward sales and export sales combined to make up the other 25% when we lost the restaurants and in the schools and the food service industry as far as pork sales go a lot of those sales were formula sales.
[00:26:39.420]Tim Hughes: Now a school knows it needs the order this much pork every school system knows it is the order this much pork every single week.
[00:26:47.010]Tim Hughes: A restaurant has a pretty good idea of how much pork. It needs to order every single week when you lost that business it dumped all of those sales. I shouldn't say all those sales and dumped a significant amount of those sales associate in Portuguese report.
[00:27:03.780]Tim Hughes: So even though we had less product to sell.
[00:27:08.070]Tim Hughes: Overall, this is a look at the volume of negotiated cut out
[00:27:14.520]And just look at that.
[00:27:16.950]Tim Hughes: So while overall yes we had less production unless pork to sell. Overall, the cut out that, you know, in that I know is cut out, which is just a negotiated sales.
[00:27:26.760]Tim Hughes: took the brunt of that supply. So even with less port to sell. We actually have a much higher volume dumped on them negotiated pork market.
[00:27:38.640]Tim Hughes: And, as everyone knows, when you have higher volume of a product
[00:27:43.620]Tim Hughes: you're generally going to have lower prices.
[00:27:47.940]Tim Hughes: So it is important to realize that until we get that that formula sales number back until we get the restaurants until we get the the schools and so on and so forth.
[00:28:01.650]Tim Hughes: You're gonna have a hard time rallying this significantly
[00:28:06.180]Tim Hughes: Just because you have more product to sell and as we ramp up production more and more. It's only going to be come more exasperated. So it's something to keep in mind.
[00:28:18.540]Tim Hughes: As far as base cash goes. Everyone knows that it's at the incredible loads. Here it's sitting as of yesterday at 28.5
[00:28:28.890]Tim Hughes: A year ago is at 73.5, you know, we don't need to dwell on this. We know the situation, you know, the backup of pigs absolutely killed cash.
[00:28:41.940]Tim Hughes: We have a fourth of july HOLIDAY COMING UP NEXT WEEKEND.
[00:28:45.780]Tim Hughes: I am hopeful that starting towards the tail end of next week as packer start bidding for pigs for the following week that maybe we can hit a low
[00:28:54.780]Tim Hughes: And start getting a little bit of a rally of cash into August or October, but it is a it is a hurdle. And when we see what what kind of backup is on the hogs and pigs report today, it will give us a clear picture of of what what we can expect the cash going forward.
[00:29:16.470]Tim Hughes: So if you take cut out subtract out cash, you know, it gives you what some would consider a gross packer margin. It isn't a real packer margin, but it gives you some indication as to how they're doing.
[00:29:27.960]Tim Hughes: And they're still doing awfully good even with cut out at 65 right and with cash at 28 or there abouts you know you've got a you've got a gross margin, if you will.
[00:29:40.620]Tim Hughes: At least cut out minus cash sitting at $39. As you can see, you know, typically at this time of years are about $8 on average.
[00:29:52.230]Tim Hughes: You know, so that that margin, even with cut out at 65 is about eight times higher right now for the packer. At least with this, at least with this metric that it has been in the past. At this time of year.
[00:30:08.730]Tim Hughes: Bottom line, there is plenty of incentive for the Packers to one hard and get through this backlog.
[00:30:19.800]Tim Hughes: See me index, of course, is a combination of all of the formula sales of pigs, as well as the negotiated.
[00:30:29.220]Tim Hughes: So if you run a regression on this and do the math, and we don't need to get into the nitty gritty, but see me index is more or less 65% cash 60 to 65% cash and 35 to 40% cut out at this point.
[00:30:47.010]Tim Hughes: You know, so as you do your math and try to figure out where where the futures can go the future settle into the CME index.
[00:30:54.960]Tim Hughes: So as you're thinking about where futures can go, it helps to have some idea of your targets for cut out in cash in mind in order to help you steer you into the right direction.
[00:31:04.890]Tim Hughes: You know, it would cut out at 70 in cash. It's 30, for instance, it would equate to see me index of around 45 and you look at where those July futures are trading at 46 like Elliot pointed out earlier, and it makes perfect sense.
[00:31:26.220]Tim Hughes: This is kind of off topic, but I think in today's world, it's important
[00:31:31.980]Tim Hughes: You know we r CH, you know, we're trying to help.
[00:31:36.900]Tim Hughes: With the awareness of contracts. Okay. And how big of a discrepancy is out there amongst you as producers as far as price being paid for your pics
[00:31:47.760]Tim Hughes: Everything you see here is public information. It's all stored at the USDA swine contract library, which has its own website.
[00:31:55.650]Tim Hughes: We, we went ahead and catalog every contract in that library. And what you see here is a histogram showing you the amount of contracts that equate to each price as of yesterday. Now these are based prices they don't include great meal there any sort of premium base price only
[00:32:15.060]Tim Hughes: Way you can see that as of yesterday you know someone's getting paid 66
[00:32:21.630]Tim Hughes: base price and someone's getting paid 21 that's that's per hardaway
[00:32:27.810]Tim Hughes: You've got this group of contracts here and this is number of contracts. It doesn't tell you how many pigs are delivering animals contracts. It doesn't tell you how many producers around those contracts.
[00:32:38.340]Tim Hughes: It just that there are that many unique contracts that equate to each price on the bottom. Okay, so for instance over 100 contracts exists in the United States in that library that would equate to a price of 30 cents per hundred wait right now.
[00:32:57.450]Tim Hughes: You know what you're looking at here is this big group here is probably mostly based cash contracts.
[00:33:04.680]Tim Hughes: And then you've got a little wall in here. And then you've got this group here in the 40s, those would probably be based off CME index type contracts or a blend of cash and cut out. Okay.
[00:33:18.780]Tim Hughes: Then you have another law and you've got these this grouping up here. And most likely, in all likelihood, those would be
[00:33:27.420]Tim Hughes: contracts that are based off of cut out whether it's a percentage of cut out or or cut out minus dollar figure
[00:33:35.670]Tim Hughes: You know with this discrepancy. It's huge. Today, but just a month ago is even bigger, you know, just a month ago you had 30 and you had you had people up at 90 that we're getting a piece of that cut out run
[00:33:50.190]Tim Hughes: You know, so it's important to have this awareness.
[00:33:53.760]Tim Hughes: You know, what do you do about is it is a whole other webinar. Right. But that's where we stand today as far as pricing of the base price of pigs heading into backers.
[00:34:08.760]Tim Hughes: So where are the features and where are they typically
[00:34:13.710]Tim Hughes: The blue dashes here are 2020 futures and you can see that, you know, like, like Elliot pointed out earlier, July is right there around 46 august 51 October.
[00:34:27.930]Tim Hughes: What I want you to start thinking about those were those futures out in 2021 okay the blue line here is is a 10 year average I did exclude 2014 from that calculation, just because it's skews it so much.
[00:34:42.960]Tim Hughes: You know, but you've got some opportunities out here, especially when you when you think about corn prices meal prices being so low to protect some profit.
[00:34:53.850]Tim Hughes: Now, April features at 66 summer futures at 75
[00:34:59.700]Tim Hughes: Yes, they're a little below the 10 year average and we're hoping for better
[00:35:05.640]Tim Hughes: But at the same time with with with July at 46 and next year is July at 75. There is a lot of improvement built into this this futures curve.
[00:35:18.690]Tim Hughes: And and we have been getting a little bit of coverage on clients have been getting a little bit of coverage on out here in the April through July timeframe.
[00:35:28.320]Tim Hughes: nothing big. It's not a great margin.
[00:35:32.130]Tim Hughes: But certainly not the worst place to start if that's the worst if that's the worst movie make is starting at around 75 with corn down in the in the mid to, you know, low $3 range.
[00:35:45.840]Tim Hughes: It certainly stacks up to be at least a profitable summer next year.
[00:35:53.160]Tim Hughes: So with that being said, let's take a look at projected margins and just look at a brief strategy or two that you could employ
[00:36:01.740]Tim Hughes: This is a little. I don't like how this slide came out, so I apologize if it's blurry but you know we're looking at FOURTH QUARTER OF 20
[00:36:10.680]Tim Hughes: A demo operation. So this isn't everybody but demo operation that we run is looking at a $13 and 49 cents loss right now per hundred way.
[00:36:23.910]Tim Hughes: At CH what we look at as percentiles. Just to give you some historical background. It doesn't mean you make every decision based off of off of this but
[00:36:33.720]Tim Hughes: It gives you some historical background that negative 1349 would equate to just the sixth percentile for fourth quarter margins over the last 10 years
[00:36:44.280]Tim Hughes: In other words, only 6% of the time in the last 10 years have margins been worse than they are today.
[00:36:54.900]Tim Hughes: An average margin in that fourth quarter over the last 10 years is negative 292 per hundred way.
[00:37:01.740]Tim Hughes: That's being 35 and lowest being negative 28
[00:37:08.880]Tim Hughes: Not very pretty. And we, you know, we're not going to concentrate on that as far as the opportunity that exists today.
[00:37:16.200]Tim Hughes: First Quarter gets a little bit better that negative 441 and is that the 98th percentile average for the first quarter is right around breakeven
[00:37:27.240]Tim Hughes: Now,
[00:37:29.160]Tim Hughes: There's a big discrepancy between the February on features and the April log features.
[00:37:34.440]Tim Hughes: And what we're going to look at a little bit is is what is the margin based off of the April hog future alone, rather than the first quarter as a total. Okay.
[00:37:43.620]Tim Hughes: second quarter margins are showing a profit for almost everybody at this point $7 and 16 cents per hundred wait and our demo that's at the 35th percentile. But you can see here is you're only you're only $2 away from an average second quarter at this point.
[00:38:04.470]Tim Hughes: So you go from dismal
[00:38:07.200]Tim Hughes: To pretty close to average in about six months time
[00:38:15.150]Tim Hughes: It. Like I said, if you just look at the April contract and the projected margin using April alone.
[00:38:22.440]Tim Hughes: It's showing the percentile jumps to 36.2% 10%. And if you look at the last five April's okay so 1718 1920 and next year.
[00:38:34.860]Tim Hughes: And you take where those April futures are trading at 6534 I drew this black line across to show you that that beats three of the last four years, as far as April expirations concerned.
[00:38:50.340]Tim Hughes: So again, well, feels like everything is in the dump right now, and for good reason.
[00:38:56.490]Tim Hughes: There is some opportunity out there to protect prices at a level that are better than than three of the last four years, and that would be an April contract.
[00:39:10.230]Tim Hughes: The seasonality as well would would support looking at that April contract. So this is a 10 year seasonal excluding 2014
[00:39:20.580]Tim Hughes: In general, you know, this dotted line right here, this vertical dotted line is where we are today. In general, over the last 10 years you have gotten a push out of the hogs and things report into that first week of July.
[00:39:33.840]Tim Hughes: And at that point in time, it does make on average in the last 10 years those April futures. Make a high right around the Fourth of July.
[00:39:42.810]Tim Hughes: So something to pay attention to as we're coming out of this report if the report is bullish and does provide support to the market. It might not be a bad ideas to be looking at adding covered critical future
[00:40:00.360]Tim Hughes: How would we do it well I drew up two strategies here. Okay. One is as simple sell a future and lock it in. Okay, well you're looking at here is this is our statistics that price table.
[00:40:12.360]Tim Hughes: off our website and you're looking at April right now at 6563 you're looking at a $20 range up the 85 and $20 range lower 45 obviously if you sell a future you're locking in at 6563 basis inside right
[00:40:31.200]Tim Hughes: Pretty simple. You know, if you go up to 85 your net price is still at 65 because you sold the future.
[00:40:37.350]Tim Hughes: So what if you wanted to put a floor under the market, but still be able to participate to higher prices, of course, to do that, you need to use options.
[00:40:47.040]Tim Hughes: And not knowing how much knowledge there is out there on this webinars far as options are concerned, you know, we just kept it pretty simple. If you buy a 64 put under the market.
[00:41:00.060]Tim Hughes: For 45. I'm sorry. That's a typo. That should say 60 to put
[00:41:04.680]Tim Hughes: For 485
[00:41:06.810]Tim Hughes: And sell 78 call up above for to 17 you can put what's called a collar in place where you have a floor at 62
[00:41:16.200]Tim Hughes: And you have a cap at 78 and that would cost you about $2 and 70 cents.
[00:41:24.060]Tim Hughes: What that would enable you to do is is put a Florida in the market. You can see here that your p&l of this position continues to rise.
[00:41:32.910]Tim Hughes: As long as the market goes down, and this is that expiration. Okay.
[00:41:37.440]Tim Hughes: So if the market goes to 45 you pick up $14 and 32 cents of that moment.
[00:41:44.910]Tim Hughes: Well, allows for some upside participation.
[00:41:49.440]Tim Hughes: If the market were continued to increase. You can see that your net price for your pigs. If we get to 79
[00:41:57.480]Tim Hughes: Would be all the way up at 7533
[00:42:01.560]Tim Hughes: Of course, with that short 78 call your cap there. So that's the best you can do. And this strategy is 7533 but it does allow you to participate from 65 up to the 75
[00:42:15.120]Tim Hughes: Which is what options are all about.
[00:42:19.020]Tim Hughes: Futures locking in
[00:42:21.060]Tim Hughes: Basis aside and options give you the flexibility to put a floor under the market and yes it does cost money.
[00:42:28.770]Tim Hughes: But it also allows you to participate. The higher prices. So as the margins are average you might be more inclined to use options to allow that to to allow it to improve
[00:42:43.080]Tim Hughes: If we get to 75, you know, you might be more inclined to use futures in order to lock up the better price.
[00:42:50.370]Tim Hughes: So just a couple of these and throw your way, hopefully, or this afternoon we show some strength out there and April and June and July, this would be one way to take advantage of that.
[00:43:04.830]Tim Hughes: So in summary, while 2020 margins are looking dismal there is opportunity to protect profit and
[00:43:12.810]Tim Hughes: Using a flexible option strategy puts a floor in under the current market price allows her participation at higher prices at the market rallies.
[00:43:22.440]Tim Hughes: Again, we'll have to end at the end I am with that going to turn it back over to Elliot
[00:43:30.780]ELLIOTT DENNIS: And I appreciate you you're listening.
[00:43:32.580]Tim Hughes: All right, yeah.
[00:43:36.300]Tim Hughes: appreciate you sharing some thoughts.
[00:43:39.720]Tim Hughes: I think, like you said, there is a lot of
[00:43:41.490]ELLIOTT DENNIS: Anticipation about what this report is going to be and
[00:43:46.290]ELLIOTT DENNIS: I think it's like a shared that you know there is some you know improvement in the market, but next year.
[00:43:54.990]ELLIOTT DENNIS: So go ahead and
[00:43:58.110]ELLIOTT DENNIS: Share our screens again.
[00:44:03.570]ELLIOTT DENNIS: I just wanted to kind of briefly go over and remind you if you have questions for either Tim or myself to put them in the Q AMP a box will have about, you know, 10 to 15 minutes at the
[00:44:15.570]ELLIOTT DENNIS: End the end of the program. I'm going to talk for about five more minutes and then we'll, we'll open it up for Q AMP. A and this is really
[00:44:24.720]ELLIOTT DENNIS: your guys's opportunity to answer those or ask those questions that you feel like maybe you're facing or
[00:44:31.770]ELLIOTT DENNIS: Talked about some things that maybe you want you know as we have Tim on on the call to to answer.
[00:44:39.930]ELLIOTT DENNIS: So once again, just put those things in the Q AMP. A. I. I wanted to talk a little bit about know there have been some government programs out there to help producers kind of patch through
[00:44:53.520]ELLIOTT DENNIS: this difficult time that Tim is has really adults upon the big one that I wanted to, to focus on was the Nebraska small business stabilization grant you might have seen those reports come out.
[00:45:09.390]ELLIOTT DENNIS: The deadline was extended to July 1 and these are grants for smaller producers and up to 12,000 to have kind of improvements and also
[00:45:21.900]ELLIOTT DENNIS: The pay the paycheck protection program for payroll.
[00:45:26.700]ELLIOTT DENNIS: If you have if you're want more information about those I've encouraged you to contact Brad looping and in our Department, Department of Ag econ and he'll be able to walk through some of those
[00:45:35.790]ELLIOTT DENNIS: On the paycheck protection program. If you want some more information about the small business grant stabilization I, I'd be more than happy to address some of those comments.
[00:45:47.700]ELLIOTT DENNIS: Then, next slide.
[00:45:51.030]ELLIOTT DENNIS: And so these programs are put in place, because as just kind of pointed out by two and myself, you know, commodity prices have declined.
[00:46:03.300]ELLIOTT DENNIS: And there are some specific contracts for producers that are eligible and are not eligible kind of the big thing here is that
[00:46:13.650]ELLIOTT DENNIS: Basis contracts and delayed pricing contracts are eligible. So if you do engaged in any of those price versus management through basis or debate pricing, you'd be eligible for these types of commodity program payments.
[00:46:28.350]ELLIOTT DENNIS: There's some more information. If you want to go to the next slide here.
[00:46:34.140]ELLIOTT DENNIS: So specifically, each commodity was given a certain cap rate total cap rate plus a per unit cap.
[00:46:42.960]ELLIOTT DENNIS: So the cares program and
[00:46:47.070]ELLIOTT DENNIS: How they determine assistance eligibility and also the price that you get
[00:46:52.260]ELLIOTT DENNIS: For hogs is specifically based on how many columns were sold January 15 April 15 that we're in Christ and then maximum inventory. Inventory held from April 16 of may 14
[00:47:05.820]ELLIOTT DENNIS: So that payment rate varies by weight so hot or pigs on 120 pounds are 28 per head.
[00:47:14.040]ELLIOTT DENNIS: And then that's under this cares payment and then you have an additional payment with the CCC payments and so
[00:47:21.630]ELLIOTT DENNIS: Let's get if you have detailed questions or you want to help us work through some of those numbers with you, you can contact myself or Brad living in in in department back he can
[00:47:35.340]ELLIOTT DENNIS: Just give me an idea of, you know, we see tear a lot about these programs. Perhaps you've seen on
[00:47:42.270]ELLIOTT DENNIS: Kind of the news or here on the radio and
[00:47:45.600]ELLIOTT DENNIS: What is this payment programs will beg for Nebraska and
[00:47:51.570]ELLIOTT DENNIS: We'll just kind of perspective for number three enough specialty crops. Number two, and livestock number three total and total payments that came in to Nebraska from these federal programs have been about 270 $7 million
[00:48:07.950]ELLIOTT DENNIS: To one we're specifically looking at buying stock about 150 $7 million come in. So while we are facing, I think some of the stimulus packages have been able to help producers, a little bit.
[00:48:22.470]ELLIOTT DENNIS: And there's still opportunities to apply for some of those programs in grants out there. Once again he need help working through some of that stuff. You can contact myself or Brad Lupin, and then department.
[00:48:37.260]ELLIOTT DENNIS: But that would just like to once again thank Tim and we'll open it up to, kind of, you guys. If you have any questions to ask. Tim and myself.
[00:48:49.650]ELLIOTT DENNIS: And Tim will just ask you to unmute here so we can we can hear ya.
[00:48:59.550]Tim Hughes: Sounds good.
[00:49:04.080]ELLIOTT DENNIS: Was people are writing when I go ahead and get started off and Tim once you tell us a little bit about cold storage. We and how it impacts the market. We've, we've heard a lot about
[00:49:15.270]ELLIOTT DENNIS: As packing plant started to slow down and they talked about meat shortages and then the conversation over revolved around. Well, we have cold storage and can we pull that out to kind of get us through talk us
[00:49:30.750]ELLIOTT DENNIS: Through
[00:49:31.080]A little bit about that.
[00:49:33.120]Tim Hughes: Yeah.
[00:49:34.530]Tim Hughes: You know a lot of people do points a cold storage. I don't lean on too heavily. And the reason I don't lean on too heavily is if you look at this, if you look at those cold storage report that just came out on Monday.
[00:49:46.050]Tim Hughes: It shows a massive decline in cold storage. If you just look at it on a chart right but even, even with that. It's only about 120 million pounds less than average cold storage.
[00:50:00.180]Tim Hughes: Which is, you know, give or take. But it's basically a day's production, you know, and you can see that even with that drop in cold storage, you know, that's as of May 31
[00:50:12.480]Tim Hughes: But cut out is done nothing but go down in the month of June, so I don't put a whole lot of emphasis into cold storage, it is good to know.
[00:50:22.470]Tim Hughes: When it is getting full of course because then it puts pressure on on sales, but only on the major extremes, is it to me much of an impact on the market. Does that make sense.
[00:50:51.390]ELLIOTT DENNIS: So you mentioned it a little bit in the beginning of the program, they were talking about.
[00:50:57.210]ELLIOTT DENNIS: Just kind of weights and in the backlog and you kind of thrown a rough number, but how many pigs are backlog when you give us an idea of
[00:51:07.290]ELLIOTT DENNIS: What that looks like. How fast can we
[00:51:09.510]ELLIOTT DENNIS: Process, just the backlog plus future production, you know,
[00:51:15.660]ELLIOTT DENNIS: How many production days are. We are. We need to make up and
[00:51:19.530]ELLIOTT DENNIS: And how we get into that number.
[00:51:22.620]Tim Hughes: Yeah, I mean, it's a tough one. And there's there's estimates all over the place.
[00:51:28.590]Tim Hughes: You know,
[00:51:29.880]Tim Hughes: Most people's Matt would if you're looking at a 2.5 million pig backup, you know, should take you probably into October and killing a lot mostly Saturdays and then running hard on Saturdays to get through it.
[00:51:43.050]Tim Hughes: Just in time for what, then, would be the big ramp up seasonally anyway.
[00:51:48.570]Tim Hughes: But I'll tell you, I mean,
[00:51:51.120]Tim Hughes: In my experience on the phones, talking to clients, talking with our team and with their clients.
[00:52:00.420]Tim Hughes: The Eastern corn belt doesn't seem to be much off of current, to be honest.
[00:52:07.590]Tim Hughes: The Western corn belt certainly isn't a different different
[00:52:11.670]Tim Hughes: Ballpark
[00:52:13.680]Tim Hughes: Especially Iowa and and you know southern Minnesota in Northwest Iowa, specifically, and I'm sure Eastern Nebraska.
[00:52:22.350]Tim Hughes: But it just depends on what packer you are delivering to. I mean, you know, Tyson, I think, was the took the biggest hit on capacity and I think they are in the 20% 25 28% capacity at one point in time.
[00:52:34.770]Tim Hughes: But from my experience anyway. Anecdotally, you know, I'm hearing about a lot of people that are current
[00:52:41.370]Tim Hughes: And yes, most of them are in eastern corn belt, but the current ones, I should say, you know, but it'll be interesting. I do think that
[00:52:50.640]Tim Hughes: It will take some time to get through them, but I'm but I'm optimistic that maybe some of those reports of the 2.5 to 3 million pigs might be a little bit overblown.
[00:53:02.640]ELLIOTT DENNIS: It does.
[00:53:05.040]ELLIOTT DENNIS: It's interesting, you're recognizing kind of geographical differences in that and that definitely
[00:53:12.210]ELLIOTT DENNIS: Here in eastern Nebraska and
[00:53:15.210]ELLIOTT DENNIS: Even in dial where there was quite a few lack of capacity there for a while.
[00:53:22.770]Tim Hughes: Certainly. Yeah, yeah.
[00:53:27.510]ELLIOTT DENNIS: So, so maybe talk to us a little bit about
[00:53:33.480]ELLIOTT DENNIS: A lot of these issues with back
[00:53:36.210]ELLIOTT DENNIS: backups and even lack of demand do that in service had to do a lot with
[00:53:43.410]ELLIOTT DENNIS: government policies and implementations of either workers or stay at home orders.
[00:53:50.700]ELLIOTT DENNIS: Is there some maybe tension or worry in the in the trading market that perhaps
[00:53:57.600]ELLIOTT DENNIS: If there were a, you know, as they're cleaning in a second wave and the government would shut down or that we might further go down, or is there some anticipation that maybe some of those things might
[00:54:10.980]ELLIOTT DENNIS: Happen. And so maybe that's why crisis haven't rallied up as much
[00:54:15.780]Tim Hughes: Yes and no. I mean, you know,
[00:54:19.140]Tim Hughes: The prices reflect. I think the futures curve currently reflects pretty accurately the state of the industry, meaning that
[00:54:29.490]Tim Hughes: This is the first time that April cogs have ever been $14 above October. Right. And in fact, that that spread at $14 is $10 more than the previous
[00:54:43.920]Tim Hughes: At this time of year. The previous high at this time of year. So, the future is in my mind our pricing in
[00:54:51.900]Tim Hughes: The backlog through October and then steady improvement throughout, I do not think it's pricing in a second big wave, especially this fall in the return of shutdowns and whatnot, you know, and I don't think that risk is price into the February in beyond contracts.
[00:55:12.630]ELLIOTT DENNIS: So looking at
[00:55:13.590]ELLIOTT DENNIS: You know, you're talking about maybe locking in margins. Right.
[00:55:17.820]ELLIOTT DENNIS: Maybe justify a little bit more of that potentially
[00:55:21.990]Tim Hughes: Yeah, I mean, that's, that's one reason why maybe go ahead and get started at the 30th percentile, rather than, you know, maybe historically awake for better margins. To get started, you know, but again with corn is cheap, as it is.
[00:55:35.940]Tim Hughes: You know, it turns 65 April and do a little bit more appetizing than than what it would have been in the past.
[00:55:44.190]ELLIOTT DENNIS: We had a question come in. Tim said kill was short, at least 2.5 million in April and May, and so it seems like not many people are admitting to be populating any see significant numbers and kind of where do they, where do they go
[00:56:01.560]ELLIOTT DENNIS: Where this
[00:56:02.250]Tim Hughes: Yeah, I think that I think that there was a lot of unionization happening especially in Minnesota southern Minnesota summoned Iowa.
[00:56:12.540]Tim Hughes: It is a it is a mystery. It is a mystery those weights are a bit of a mystery. I don't have all the answers.
[00:56:21.510]Tim Hughes: You know, we're going to start getting a little bit of the answer we're going to get a little bit of the answer here and about an hour right when the husband's report comes out.
[00:56:31.680]Tim Hughes: The youth and ization question is a good one. And, you know, one thing that I was hoping for is, you know, the government to pass some sort of identity, you know, for for utilization, which would give us a look at how many were at actually euthanized. Right.
[00:56:47.250]Tim Hughes: It's a crapshoot you know there's a lot sold into the private market to, you know, we had a lot of clients doing that, that, that we're selling them privately the pigs privately so
[00:56:57.780]Tim Hughes: It, it's a mystery. We don't know the numbers. I'm not discounting the fact that we're 2.5 to 3 million as behind. I'm just optimistic that it's a little bit less than that.
[00:57:10.710]Tim Hughes: If that makes sense.
[00:57:14.790]ELLIOTT DENNIS: So as we go. As you mentioned, the
[00:57:18.840]ELLIOTT DENNIS: Takes you four is coming out now. By now, or whether what is the
[00:57:23.130]ELLIOTT DENNIS: Number that category that year. Most watching, they can be the biggest market will refer us here. Is it that
[00:57:31.440]Tim Hughes: Why south. I think that is it might
[00:57:34.140]Tim Hughes: Consider that 180 up and market is very important. You know those pigs would typically have been delivered by July 15 THOSE ARE THE JUNE 1 to July 15 pigs.
[00:57:47.310]Tim Hughes: The next bucket 122 179 pound pigs would typically be the July 15 of August 15 pigs.
[00:57:55.290]Tim Hughes: And when you look at those analysts expectations. Right. And you see everything from up 2.2% up 26.8% or whatever it was. I mean, clearly, no one has no one really has any idea what this report is going to hold you know and
[00:58:12.510]Tim Hughes: At an average as an average guess of 16.6% higher, you know, I'll be I think that's the category that I'll be most interested in seeing. I also want to get a look at those. The pig crop from March through May.
[00:58:28.050]Tim Hughes: They have it down 1% you know
[00:58:31.500]Tim Hughes: Again, I'm I'm optimistic but maybe by nature, but
[00:58:36.270]Tim Hughes: I'm hopeful that that that number comes in lower than than down just 1% and maybe even closer to 3%
[00:58:44.010]Tim Hughes: So those two would probably be the ones that I'll be looking at the most greeting heart of courses is going to be interesting to see if the South slaughter that we've seen this year up 11.7%
[00:58:55.860]Tim Hughes: Is reflected in this report, but I think the analysts got that one.
[00:59:00.930]Tim Hughes: Pretty close to write it down 2% or so and you know anything less than that I think would be bullish bullish for the deferred contracts. So the whole thing's going to be incredibly fascinating when we see it here in an hour, so
[00:59:17.370]ELLIOTT DENNIS: Well, thanks. Tim, I appreciate your, your thoughts and kind of your insight and I want to thank everyone for taking some time out to
[00:59:26.520]ELLIOTT DENNIS: Join us on this webinar today. Hopefully it's been helpful for you will be providing both my contact information and Tim contact information if there's something that you want to follow up with us about or you're more interested in
[00:59:41.190]ELLIOTT DENNIS: How to manage margin are priceless.
[00:59:45.120]ELLIOTT DENNIS: Please feel free to reach out and kind of here to help. And that
[00:59:49.800]ELLIOTT DENNIS: Also a reminder about a future webinar webinar series that will be happening. We have them every Thursday from noon to one, next one is going to be on board and
[01:00:02.580]ELLIOTT DENNIS: Pasture
[01:00:04.650]ELLIOTT DENNIS: Insurance and Jay Parsons will be given that
[01:00:09.720]ELLIOTT DENNIS: If you'd like to. You'll also be receiving kind of a short 32nd survey in an email, we'd really appreciate your feedback. We're trying to provide webinars that are both relevant to you.
[01:00:20.700]ELLIOTT DENNIS: And also to the industry at large. And the final thing we wanted just to kind of highlight is that here at the University of Nebraska, Lincoln.
[01:00:31.140]ELLIOTT DENNIS: Specifically in the Department of Ag econ we do provide some what we call the Nebraska strong financial services is are mainly for
[01:00:40.050]ELLIOTT DENNIS: Smaller to mid size operations and really it's to help kind of plan and organize all the information in and provide some budgeting and cash flow and enterprise. And what if analysis.
[01:00:53.610]ELLIOTT DENNIS: If you're interested in that I focus on the livestock sector so mainly focus on on the heart and cattle industry.
[01:01:02.880]ELLIOTT DENNIS: If you're interested in kind of the grains and corn, soybeans, wheat, Cory Walters in our department walls do that.
[01:01:11.340]ELLIOTT DENNIS: With that, we just want to appreciate everyone for joining us. And thanks again Tim for, for being here. Insurance midnight, and we hope to see you back here at another webinar series. Have a great day everyone.
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