AgCountry Farm Credit Services
March 2022
PLANT A Unified
CONNECTION
AgCountry Farm Credit Services / PLANT / March 2022
A Letter From
The CEO Greetings,
It can be easy to feel disconnected in today’s world. Whether it is due to the pandemic we have faced in the last few years, contention within our political climate, or issues that arise in our personal lives, a sense of disconnect can occur. When people are not aligned within a team, organization, or business, optimum results become harder to achieve. In 2022, we have made “connection” a primary theme for AgCountry Farm Credit Services. It is our intention to strengthen our bond internally as a team and externally with you, our member-owners. Now, that is certainly not to say we are currently disconnected from each other. Rather, we are being diligent in our efforts to create and sustain connection. Through connection, we can better fulfill our mission and better serve your needs now and into the future. When I think about building connection, I am drawn to the value of a shared cause. At AgCountry, our cause is to serve agriculture and rural America by providing reliable, constructive credit and financial services, today and tomorrow. Having a unifying cause such as ours acts as the adhesive that bonds us together. Our vision is to be a destination for your success. If you were to spend time in various regions of our association, it would not take long for you to realize how much our employees enjoy interacting with and assisting our member-owners. We value the relationships we have with our patrons. You
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are not simply a business transaction or statistic at AgCountry; you are a shareholder at AgCountry and your voice matters. Whether you come to our office or meet with us on your farm or ranch, we will always look for ways in which we can help improve your financial situation and achieve the goals you have set. I have spoken extensively in the past about the different ways we serve our member-owners. A great way in which we both serve and build connection is through our cash patronage program. It is a pleasure to announce a cash dividend payout of $76 million for business conducted in 2021. This is the third year in a row that we have met the 1% (100 basis point) threshold for our cash dividend payment. As we move forward into 2022, I am optimistic about what we can and will accomplish together as a connected and unified association. Thank you for your continued business and support of AgCountry. Sincerely,
Marc Knisely, CEO
A Member-Owned Cooperative
AgCountry Farm Credit Services / PLANT / March 2022
TABLE OF CONTENTS 4-5
PATRONAGE DIVIDENDS
6-7
UNDERSTANDING MARGIN CALLS
8-9
DO YOU HAVE THE RIGHT HAIL INSURANCE POLICY?
10 11-13 13 14-17
AGCOUNTRY BOARD MEMBERS LEGISLATIVE UPDATE ANDY MARTIN JOINS AGCOUNTRY SPRING WEATHER OUTLOOK AND BEYOND
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THE MILLENNIAL FARMER SPEAKS AT ICE, YBF BREAKFAST
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UPPERCLASSMEN SCHOLARSHIP
The information in this magazine has been prepared for informational purposes only and does not constitute investment advice.
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AgCountry Farm Credit Services / PLANT / March 2022
AgCountry Members to Receive
$76 Million in Cash Dividends Member-owners of AgCountry Farm Credit Services will soon discover the cooperative advantage as your cooperative announces a record $76 million cash dividend. For the third consecutive year, AgCountry has achieved its patronage goal of a 1% dividend on all eligible business. This effectively lowers our qualifying member-owners’ interest rate by 1%. This is the third year in a row that AgCountry has met the 1% (100 basis point) threshold for a cash dividend payment. With rising input costs, supply chain disruptions, and inflationary pressure, AgCountry member-owners will be receiving some welcomed news as dividend payments arrive in March 2022 for business conducted in 2021. “It truly pays to do business with AgCountry Farm Credit Services,” states 2021 Board Chair Ed Hegland. “As a farmer myself, I can confidently say that AgCountry’s dividend program sets us apart from other lenders.” Of the $76 million in total patronage, $67 million was generated by AgCountry and $9 million was generated from Farm Credit Services of North Dakota. The two associations merged on January 1, 2022. Since the cooperative’s patronage program launched in 2014, over $335 million has been paid out to AgCountry patrons. “We work hard every day to fulfill our mission to serve agriculture and rural America,” said CEO Marc Knisely. “It is a pleasure assisting over 25,000 farm families, agribusinesses, and rural residents in achieving their financial goals.” AgCountry’s patronage program grants the Board of Directors the ability to distribute a portion of the association’s net income to its member-owners when financial conditions allow for it.
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AgCountry Farm Credit Services / PLANT / March 2022
PATRONAGE DIVIDENDS 80
$76
AMOUNT PAID TO MEMBERS (IN MILLIONS)
72 64 56 48 40 32 24 16 8 0
$64
$60 $42.5
$34.53
2017
2018
2019
2020
2021
YEAR
CASH DIVIDEND AS A PERCENTAGE 2017
2018
2019
2020
2021
$34.53
$42.5
$60
$64
$76
0.72% 0.75%
1%
$76 Million Paid out in Patronage in 2021
1%
2022
2023
1%
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AgCountry Farm Credit Services / PLANT / March 2022
UNDERSTANDING MARGIN CALLS:
What Are They and How Do They Work? Written by: Katie Tangen,
Marketing Education Specialist
It’s no secret that a vast part of grain marketing strategy is psychological. However, discipline, patience, and sheer mental fortitude are all important qualities in executing a risk management plan. That can be especially tough when the market makes major swings in direction like we’ve seen in the past 18 months. Conversations in the winter of 2020 concentrated on how to make sales so that producers could have some form of profitability. The stress of not making money was real, but the downside risk was smaller. Today, the stress is still real but focused more on increased number of dollars on the line due to higher input costs. This stress can be particularly pointed if you’ve chosen to hedge your grain using futures contracts in your own account. In this case, each day the markets go up raises the unpleasant specter of a margin call. First off, let’s discuss what margin is. If a producer chooses to sell their grain using futures contracts in an account that they themselves are managing, they have, in essence, agreed to deliver a certain amount of grain at a specific futures price over a designated time frame. For example, a producer might have sold 5,000 bushels (one contract) of corn
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at $5.00 for December delivery. At the time this was booked, $5.00 futures looked good. Fast forward and say December futures are trading at $5.50. A producer might say in their head, I don’t want to sell grain at $5.00 anymore, I want $5.50. To avoid this, the clearing house facilitating the trade requires that a certain amount of good faith money be held in an account. Every time the market moves against you, the move is “charged” against your account and you must deposit money to maintain a certain balance. This money is margin. When you need more in the account, the broker will call and tell you the amount; hence, a margin call. These funds are in a segregated customer account with your name on them. If the market goes back in your favor, you get credit back. Any cash above the required margin amount is available for withdrawal. Upon delivery of the physical crop to the elevator, you lift the hedge and the higher futures price on the cash sale offsets the loss in the margin account. So, what’s the problem? In fast rising markets, producers can experience these margin calls on a daily, or near daily, basis. While the sale was hopefully done at a profitable level, the act of writing out a check, sending a wire, or ACH every day is taxing. Psychologically, it acts as a reminder that you could have done something better. It’s one reason producers need to consider whether they are comfortable with selling futures in a trading account and why futures trading isn’t for everyone. The reality is, even if you’d sold a futures fix or hedge to arrive (same contract, just different terms), you’d still feel behind. You might not have the daily reminders in front of you, but in the end, you still have a $5.00 futures sale. An elevator is likely going to charge you a fee of some sort to execute the futures fixed contract, and that money - at least partially - goes to paying interest on the elevator’s own hedging line of credit. Times like this are when producers can feel like they’ve made a huge mistake in selling ahead.
AgCountry Farm Credit Services / PLANT / March 2022
The truth is marketing is hard no matter what. Discipline is crucial—especially when the momentum of the market is pushing you to think each day brings higher prices. Here are a few tips:
1.
Find the level you feel comfortable making a sale at and stick to it. This price should take into account current market conditions and your costs. The chances of selling 100% of your crop at the high tick is slim to none. Scaling into sales is fine. In fact, while we’ve always encouraged marketing plans, producers need to keep reviewing and altering them as necessary. That doesn’t mean constantly moving everything higher; it just means re-evaluating major changes while attempting to leave emotion out of it.
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If you haven’t already done so, decide now how much of your production you want to sell on futures ahead of time and at what percentage of your expected prodution. Do you want to use options? On what percent? It’s a good idea to use a few different methods of selling.
3.
Whatever you decide, make a plan and stick to it. That can be difficult now. Here’s the thing: if you always sell ahead, keep selling ahead. Yes, you feel behind now, but if you keep doing it, you’ll catch up on the backside of the rally. If you always sell after harvest, fine. You’re reaping the benefits now. It’s a good time to consider looking at selling more ahead, but don’t switch without a plan ahead of time.
4.
On a related point, if you are hedging in a futures account, stick with it. The risk of paying in margin, getting scared and jumping out at a loss is very real. There’s also absolutely no guarantee that the market will keep going up enough to offset that loss, in which case you’ve made a bad situation worse.
The market for 2022 so far has great opportunity, and something not many would have counted on even two years ago. Now is the time to look at building for the future but not without a plan and strong risk mitigation strategies in place. If you have any questions on this, please contact Rob Fronning, Jeff Beaudry or me, or get in touch with your loan officer or insurance specialist. I wish you a safe and productive spring!
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AgCountry Farm Credit Services / PLANT / March 2022
DO YOU HAVE THE
RIGHT HAIL INSURANCE POLICY? Written by: Sammy Baxter, Insurance Specialist
When you see a storm on the horizon or on your phone’s radar, are you comfortable with the hail coverage you have in place to protect your crop? Did you elect enough multi-peril coverage? Luckily, you can protect your crop with a variety of hail insurance options in addition to your multi-peril insurance coverage. It is important to determine how much is necessary for your operation.
The Hail Coverage You Need is Subject to Your Multi-Peril Unit Structure If you chose to have Enterprise Units (EU) – where all acres of the same crop in the same county are combined - on your multi-peril policy, any loss is averaged across the whole of Enterprise Units. So, while you may have an entire field wiped out, the average may make you ineligible for a claim. However, hail insurance losses are determined on a per field basis. This means that even if you chose to have EU for your multi-peril policy, you can use hail insurance to make sure that your individual fields will be eligible to receive payment if you suffer from a hail loss. Because of this, the unit structure on your multi-peril policy is an important consideration when choosing your hail insurance coverage levels. If EU is elected on your multi-peril policy, you may want to increase the amount of hail coverage you have in place to manage the risk on your unprotected crop. For example, suppose your multi-peril coverage was selected at a 70% coverage level on the fields shown in the next column. You take 70% of your actual production history (APH) to find your guarantee.
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FIELD A
FIELD B
APH: 195 195 X 70% Guarantee: 137
APH: 130 130 X 70% Guarantee: 91
137 + 91 = 228,
228/2 = 114
This results in a 114 guarantee per unit average. If you average more than 114 bu/acre, then you have no indemnity with your multi-peril coverage regardless of loss on an individual field even if it is less than your guarantee. If Field B’s yield meets its APH, Field A could technically suffer a 97 bu/acre loss that would be completely uncovered. This is where it is important to realize how utilizing a hail insurance policy to compensate some risk can be extremely beneficial to your operation.
Traditional Hail and Production Hail – Which is Right for Your Operation? Traditional hail products protect up to the actual value of your crops. Here, you can elect the level of dollars per acre that you want your crop to be insured at. There are different traditional policy options to fit any producer, such as no deductible, multiple deductible options, and increased payout options to name a few. With a traditional policy, you can add additional coverage to your crop if yield forecasts look good as the growing season continues. You can also choose more than one policy to protect your crop. For example, a no-deductible policy could be paired with a high-deductible policy if it looks like you will have a bumper crop. Something else to keep in mind when looking at traditional policies is that hail loss payouts are not determined by your production.
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AgCountry Farm Credit Services / PLANT / March 2022
For example, if you have a 10% hail loss on a field that you have $250 of coverage on with a basic policy (one of the traditional policy options), then you would get a $25 per acre payment, regardless of what your crop yields. Every plan is different, but a 10% loss with a basic policy would net you a payout of 10% of your total coverage purchased on that plan.
Basic Policy 10% Hail Loss with $250 Hail Coverage per Acre $250 x 10% = $25 per acre payment
Production hail combines your existing multi-peril coverage with your hail coverage. The production plan adds back the deductible that you’ve chosen based on the coverage level that you elected for your multi-peril policy. A typical production hail policy will insure your APH up to 120% and up to 100% of the Revenue Protection (RP) or Yield Protection (YP) projected price.
For another example, let’s say the adjustment is set at a 10% loss with the crop adjuster. After reporting your production, the loss comes out to be an 8% loss on the same field that had a 10% loss when it was adjusted. You will get paid on the lessor of the two losses (8%) for your hail indemnity payment.
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If the adjustment is set at a 10% loss with the crop adjuster, and after reporting your production the loss comes out to be 15%, you will get paid the lessor of the two losses (10%).
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The production hail policy is a great tool in managing risk when you do not foresee your crop outgrowing its modified guarantee. If you do outgrow your modified guarantee you will not receive an indemnity. Production hail policies were very common when they first became available as a risk management tool for producers and, because of that, the rates have steadily increased along with some areas seeing increased APHs. The higher the APH, the more crop there is to insure, which can be a factor in production hail rates going up as well. Traditional hail policies, however, do not increase their rates based on production – they increase/ decrease based on loss history in your area.
APH of 175 bushels per acre with 120% Production Hail Plan
There is one more piece to the hail insurance puzzle that needs to be considered and that is whether a farmer should choose wind coverage with their hail insurance policy. Wind coverage is available for both traditional and production hail policies. This coverage could be far more important for your operation than what type of hail insurance policy is chosen based on where your operation is more at risk. Please utilize your AgCountry insurance specialist’s knowledge when determining how to manage your operation’s risk using wind coverage and hail insurance.
175 x 120% = 210 bushels per acre modified guarantee
It’s important to know that there is not a “one size fits all policy” when it comes to crop insurance. Every farm requires a large amount of analysis. When it comes to your farm, we will help guide you in choosing the best policy for your operation.
For example, suppose the APH for one of your corn fields is 175 bushels per acre. With a 120% production plan, you now have a modified guarantee of 210 bushels per acre. This means that your production hail policy will pay out up to 210 bushels if you suffer a hail loss.
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AgCountry Farm Credit Services / PLANT / March 2022
AGCOUNTRY BOARD MEMBERS At the January Board meeting, Greg Sabolik was elected board chair for 2022, while Lynn Pietig was elected to serve as vice chair. The following is a complete list of all AgCountry Board members:
GREG SABOLIK
Greg.Sabolik@AgCountry.com BOARD CHAIR
BRYAN ANKENBAUER
Bryan.Ankenbauer@AgCountry.com DIRECTOR
ED HEGLAND
Ed.Hegland@AgCountry.com DIRECTOR
MICHAEL LONG
Michael.Long@AgCountry.com DIRECTOR
CURT TROST
Curt.Trost@AgCountry.com DIRECTOR
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LYNN PIETIG
Lynn.Pietig@AgCountry.com VICE CHAIR
JUSTIN DAGEN
Justin.Dagen@AgCountry.com DIRECTOR
THOMAS (TOM) HENRY
LEIF AAKRE
Leif.Aakre@AgCountry.com DIRECTOR
KURT ELLIOTT
Kurt.Elliott@AgCountry.com DIRECTOR
JAMES (JIM) JARVIS
Thomas.Henry@AgCountry.com DIRECTOR
Jim.Jarvis@AgCountry.com DIRECTOR
GREG NELSON
WILLIAM (BILL) OEMICHEN
MARY KAY VAN DER GEEST
DALE ZAHRADKA
Greg.Nelson@AgCountry.com DIRECTOR
Bill.Oemichen@AgCountry.com APPOINTED OUTSIDE DIRECTOR
Marykay.Vandergeest@AgCountry.com Dale.Zahradka@AgCountry.com DIRECTOR DIRECTOR
SUZANNE ALLEN
Suzanne.Allen@AgCountry.com APPOINTED OUTSIDE DIRECTOR
MARK ELLISON
Mark.Ellison@AgCountry.com DIRECTOR
KAREN KERNER
Karen.Kerner@AgCountry.com DIRECTOR
STEVE PERDUE
Steven.Perdue@AgCountry.com DIRECTOR
MIKE ZENKER
Mike.Zenker@AgCountry.com DIRECTOR
Experts in Every Field
AgCountry Farm Credit Services / PLANT / March 2022
LEGISLATIVE UPDATE Written by: Andy Martin, Legislative and Public Affairs Officer
Senator Westrum (wearing red tie) and the Minnesota Farm Credit Committee.
Winter is a busy season at most state capitols and in 2022 that holds true in Minnesota and Wisconsin where both legislatures have been in session since January. During this flurry of activity, AgCountry’s Board of Directors has been busy engaging legislators and state leaders in discussions on key agriculture issues and legislative priorities. WISCONSIN In Wisconsin, the Farm Credit Services Legislative Day was held at the State Capitol on February 2. Board members from AgCountry, GreenStone FCS, and Compeer Financial gathered in Madison for this effort. Following policy briefings, the directors held over 25 meetings with legislators, state agency leaders, and key staff members. The 2021-23 biennial budget bill contained several important provisions for Wisconsin farmers. Directors shared their appreciation for the time
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and attention legislative leaders and the Governor spent on agriculture issues during budget negotiations. Agriculture highlights of the biennial budget included: • $5 million over five years for an effort by the Department of Agriculture, Trade and Consumer Protection (DATCP), and Wisconsin Economic Development Corporation to increase agriculture export values 25% by 2026. • $400,000 over the biennium for the Meat Processing Facility Infrastructure Grant program, which aims to grow Wisconsin’s meat industry and improve the long-term viability of the state’s livestock industry. • Funding for four additional state meat inspectors was included in the budget, as the shortage of inspectors was identified by the state as a critical limiting factor to increasing processing capacity. • $2 million over the biennium to fund University of
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AgCountry Farm Credit Services / PLANT / March 2022
Wisconsin-Madison Division of Extension specialist positions in the field of agricultural research. • $1 million each year for DATCP’s Producer-Led Watershed Protection Grant Program, which is an example of a very successful farmer-led conservation initiative. • $1.2 million a year for the Department of Natural Resource’s Well Testing and Remediation Grant program, which helps address high nitrate levels and other contaminants in drinking water by assisting rural well owners who repair, upgrade, or install filtration systems to improve drinking water quality. Directors also expressed support for two pieces of legislation currently under consideration that would expand farmer-led nitrate reduction and ag water quality initiatives. The first bill, AB 727/ SB 677, would provide $2 million for a Nitrogen Optimization Pilot program that would allow DATCP to award grants of up to $50,000 to farmers who implement projects to optimize commercial nitrogen use. The bill also makes $400,000 per year available for crop insurance premium rebates for cover crops ($5 per acre) as well as funding a three-year hydrogeologist position that would focus on depth-to-bedrock information at the local level. The second bill, AB 728/SB 678, expands eligibility for both the Rural Well Compensation Grant program and the Producer-Led Watershed Protection Grant Program. The bills are winding their way through the legislative process and next steps include votes by the full Assembly and Senate. It is expected that the legislature will adjourn in early March 2022 and turn its attention to the 2022 elections. 12
Minnesota State Representative Paul Anderson (standing left) joined members of the Minnesota Farm Credit Committee February 16 to provide a legislative update
MINNESOTA The Minnesota Farm Credit Legislative Committee, led by board members from AgCountry and Compeer Financial, hosted a day at the Capitol on February 16. Throughout the day, directors held discussions with legislative and state agency leaders to express support for the committee’s priorities, which include: an expansion of the Beginning Farmer Tax Credit; additional staff resources for the Department of Agriculture’s Rural Finance Authority (RFA); and equipment upgrades for the Veterinary Diagnostic Laboratory at the University of Minnesota. With the passage of a two-year budget bill during the 2021 session, no official action is required by the legislature in 2022; however, state leaders are considering options for the record $7.7 billion budget surplus, including potential funding adjustments and tax cuts. The Minnesota Department of Agriculture has requested over $50 million in supplemental funding for the current biennium. Some of the funding requests included $3 million for livestock processing; $3 million for incentives for meat processing workers; $2.5 million for meat processing technical program expansion; $1.5 million for animal disease preparedness and response; $5 million for Farm to Food Shelf hunger relief; $3 million for the University of Minnesota’s Forever Green initiative; $5 million for a new grain indemnity fund; and $12 million for a “healthy soils” grant program. In addition to the actions on the budget, legislators will likely consider a public construction bonding bill. Lawmakers are expected to wrap up the session by late spring, as the state constitution requires adjournment no later than May 23, 2022. NORTH DAKOTA The Legislature in North Dakota only formally meets in odd numbered years. As the year is 2022, there is no legislative update for that state. We look forward to connecting with elected officials in the state as the next session gets closer. A Member-Owned Cooperative
AgCountry Farm Credit Services / PLANT / March 2022
Andy Martin
Joins AgCountry
AgCountry Director Jim Jarvis (left) and Wisconsin State Representative Kevin Peterson
AgCountry Director Karen Kerner (right) and Wisconsin State Senator Janet Bewley
In Washington, D.C. and in our state capitols, AgCountry is recognized as a leader on issues impacting rural communities and agriculture. To continue to capitalize on this reputation and the strength that comes from being a customerowned cooperative with over 25,000 members, we understand it is important to be increasingly more intentional in our legislative and public policy efforts. To assist in these efforts, Andy Martin joined our team as a legislative and public affairs officer last fall. Andy comes to AgCountry with over 21 years of experience working for state and federal elected officials. From 2007 to 2021, he was on the staff of U.S. Senator Amy Klobuchar, serving as her Agriculture & Regional Outreach Director. Prior to his service with Senator Klobuchar, he worked in both Washington, DC and St. Paul. It’s important that we continue to share the stories of our farmer and rancher owners. Policymakers look to us for insight into the complexities and nuances associated with agriculture and we look forward to building upon on our status as an advocate and trusted source to these leaders.
AgCountry Director Mary Kay Van Der Geest and Wisconsin State Senator Jerry Petrowski
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Look for more updates from Andy and the legislative affairs team going forward.
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AgCountry Farm Credit Services / PLANT / March 2022
Spring Weather Outlook AND BEYOND
Written by: Eric Snodgrass, Principal Atmospheric Scientist Nutrien Ag Solutions
The 2021 growing season was dry across much of Minnesota and North Dakota while the state of Wisconsin largely saw adequate moisture. Given the drought conditions witnessed last year, many farmers and ranchers are wondering what will be in store for 2022. Let’s take a look at recent weather modeling to help piece together what may be coming our way.
There is concern, given the La Niña and the behavior of the Madden Julian Oscillation (MJO), that the South American monsoon may slow down earlier than normal putting some of the safrinha crop at risk of finishing in drier than normal conditions. Figure 1 shows the European Centre for Medium-Range Weather Forecasts (ECMWF) forecast for rainfall anomalies March – May 2022.
South America Our 2022 late-winter weather outlook starts in South America where despite the rapid planting of the first crop of soybeans in October and November, extensive drought developed across Southern Brazil, Paraguay, Uruguay, and Argentina. Temperatures hit triple digits several days in a row in Argentina with very little rain in December and early January, while Southern Brazil received less than half of its normal mid-season rain. Mato Grosso, Brazil’s largest ag state (30% of total production), had nearly ideal weather but could not make up for the yield loss in Mato Grosso Do Sul, Parana, and Rio Grande Do Sul. The result has been a roughly 20 MMT reduction in total soybean production for the 2021-22 growing season. Safrinha corn planting (about 75% of Brazil’s total corn production) is ahead of the five-year average planting pace, but mid- to late-February has been very dry in Southern Brazil, while heavy rains have slowed the planting pace in northeastern Brazil (20% of the growing area). The result is that total ag productivity across South America moving through March and April is neutral to lower.
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Figure 1 Precipitation Anomalies forecast for March – May 2022 by the ECMWF Seasonal Forecast Model. Source: ECMWF and https://www.weatherbell.com
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AgCountry Farm Credit Services / PLANT / March 2022
La Niña The colder water that stretches between South America and the central Pacific Ocean shown in Figure 2 represents the current state of La Niña. This is the second La Niña winter in a row and nearly all forecast models show the La Niña fading toward neutral conditions by late Spring. We care about the behavior of the ocean temperatures and trade winds in the Pacific because these two variables impact the position and strength of the jet stream as it travels across North America. While the ocean temperatures along the equatorial Pacific slowly fade back to normal, we must keep a close eye on the colder water in the Gulf of Alaska. The cold water in this region is part of a long-term cycle in ocean temperature in north Pacific called Pacific Decadal Oscillation. The last time the waters were this cold in the Gulf of Alaska was during the 2008 – 2013. The concern is over the extent and depth of that cold water going into the 2022 growing season. If the cold water expands south toward the California coast over the next three months, the risk for summer drought increases in the upper Midwest. Six out of 10 years where the water is very cold all along the west coast of North America, the Midwest experiences drought. Most long-range models do not expand this region of cold water through mid-summer – which is a very good sign – but we need to monitor this very closely.
Figure 2 Current Sea Surface Temperature Anomalies on Feb 14, 2022. Source: https://coralreefwatch.noaa.gov/data_ current/5km/v3.1_op/daily/png/ct5km_ssta_v3.1_global_current.png
Serving Agriculture and Rural America
Current Snowpack and Spring Flooding Outlook This winter has not delivered uniform snowpack across Minnesota, North Dakota, and Wisconsin. The top of Figure 3 shows the current snowpack (in liquid equivalent) through February 15. Notice how the headwaters of the Mississippi River and the Red River have between two to eight inches of meltwater in the snowpack, but much of the Western Plains is snow-free (especially on the Missouri River). The bottom of Figure 3 shows seasonal snowfall anomalies through February 15, 2022. A large region from Southern Wisconsin through the
Figure 3 Snow Water Equivalent (inches) valid on Feb 15, 2022. Bottom: Seasonal snowfall anomalies (% of normal) through Feb 15, 2022. Source: https://www.nohrsc. noaa.gov/nsa/
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AgCountry Farm Credit Services / PLANT / March 2022
Western Cornbelt has been repeatedly missed by big winter storms since November. We need to monitor the March and April forecast closely for the jet stream to move into a position that flows out of the southwest across the Western Cornbelt to relieve the expanding drought in that area.
Figure 5 ECMWF Forecast for March 2022 Precipitation Anomalies. (Source: ECMWF and https://www.weatherbell. com)
Polar Vortex is very strong, which limits the duration and depth of Arctic outbreaks of colder air.
Spring and Summer Outlook from the ECMWF and NMME
Figure 4 NASA 0-40cm (16”) Soil Moisture Percentile valid on Feb 15, 2022. Source: https://weather.msfc.nasa. gov/sport/case_studies/lis_CONUS.html Bottom: US Drought Monitor for Feb 10, 2022 Source: https:// droughtmonitor.unl.edu/
March 2022 Forecast The forecast through March 2022 (shown in Figure 5) indicates above normal precipitation for most of the Mississippi Watershed, which could increase the flood threat along the Mississippi and its tributaries if the forecast verifies. Better rains are also forecast for Northern California and the Pacific Northwest, but models are not overly ambitious on significant drought relief in the Plains. Expect a volatile temperature pattern through March, which is typical for the Upper Midwest in late winter. One very good thing about the late winter is that the
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The long-range precipitation forecast for Spring (April-June) and Summer (June-August) is shown in the four-panel plot in Figure 6. Forecast models have consistently called for above average spring rains east of the Mississippi throughout the Great Lakes. This is largely due to the models building the area of the current drought in the Plains. Confidence is low in this forecast because of the highly variable behavior of the Pacific jet stream this winter. The ECMWF is favoring slightly above average temperatures, but we cannot use this analysis to predict the timing of the last frost of Spring. Nearly all long-range forecasts for Summer 2022 build drought in the Central Plains. This is common model behavior when there is drought in the Plains to expand it through Spring and Summer. Last spring, the drought area in the Southern Plains recovered quickly, while drought expanded throughout the Western Cornbelt into the Canadian Prairie and the whole of the Western U.S. If the drought area increases in size this Spring for the Plains, it could possibly increase the thunderstorm activity across the Upper Midwest this summer.
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AgCountry Farm Credit Services / PLANT / March 2022
In summary, the drought risk for the primary corn and soybean belt is elevated above average given the fading La Niña, colder water in the Gulf of Alaska, and current drought issues. The historical average for “significant” drought risk (defined as drought that reduces yield more than 20% below trend) is 30% going into any growing season. The risk this year is currently 38%.
Figure 6 ECMWF Seasonal Forecast Guidance (Source: ECMWF and https://www.weatherbell.com). Top Left: April – June Precipitation Anomalies (inches). Top Right: April – June Temperature Anomalies (°C). Bottom Left: June – August Precipitation Anomalies (inches). Bottom Right: June – August Temperature Anomalies (°C)
$76 Million Paid out in Patronage in 2021
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AgCountry Farm Credit Services / PLANT / March 2022
The Millennial Farmer Speaks at ICE, YBF Breakfast in Grand Forks The Millennial Farmer, Zach Johnson, recently spoke at the International Crop Expo (ICE) held in Grand Forks, North Dakota last month as well as a Young Beginning Farmer (YBF) Breakfast sponsored by AgCountry, also in Grand Forks. Zach actively promotes agriculture by sharing his day-to-day experiences in farming to his audience
of over 800,000 followers on YouTube. Zach discussed his experience building his following and what he has learned about how agriculture can communicate with non-farmers. A special thanks to AgCountry employees Kelly McDonald and Jean Johnson for making these events such a success!
Zach (right) with AgCountry employees Justin Grinde (left) and Kelly McDonald (middle) at the YBF breakfast
Q&A with Zach Johnson at the YBF breakfast
Zach with AgCountry employee Jean Johnson
CHECK OUT THE MILLENNIAL FARMER ON YOUTUBE! 18
Experts in Every Field
AgCountry Farm Credit Services / PLANT / March 2022
A SCHOLARSHIP OPPORTUNITY For College Students We believe that an investment today can lead to greater yields in the future. We also believe in the importance of a good education. AgCountry has long been a strong supporter of building the next generation of farmers, ag professionals, and rural leaders. One way we invest is by helping offset part of the cost of higher education. If you or your child already has taken some college credits, be sure to check out this great opportunity! UPPERCLASSMEN SCHOLARSHIP AgCountry is offering ten $1,000 scholarships for upperclassmen college students who have completed 69 credits at a college or university, are studying in an agribusiness, business, or related field of study, and plan on working in agricultural lending or related agricultural services. Selection is based on academic aptitude, vocational promise, personal attributes, and leadership. Children of AgCountry Farm Credit Services Executive Leadership, Board Members, or Selection Committee Members are not eligible to apply. The application deadline is June 1, 2022. You can find the application to our scholarship by visiting agcountry.com. Once there, click “Scholarship Programs” under the “Advocating for Ag” tab. Or if viewing electronically: https://bit.ly/3KaI3ZV
AgCountry.com
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AgCountry Farm Credit Services P.O. Box 6020 Fargo, ND 58108
2021 PATRONAGE
$76 MILLION
PAID TO COOPERATIVE MEMBERS
It pays to be a member of our cooperative.